During last week’s debate, Paul Ryan insisted that the ridiculous Romney/Ryan budget plan is “mathematically possible” and has “been done before.” When Vice President Biden protested, the congressman said, “Jack Kennedy lowered tax rates, increased growth,” prompting Biden to say incredulously, “Oh, now you’re Jack Kennedy?”
It was an entertaining exchange, but there’s a larger question here: what’s up with Republican support for JFK’s tax plan?
This comes up quite regularly, and the Bush/Cheney administration pushed the “we’re just following Kennedy’s lead” line during their major tax-break campaigns in 2001 and 2003, and now Romney and Ryan are doing the same thing. Do Republicans have a point on this?
As long-time readers may recall, the argument is deeply flawed.
Let’s set the record straight. When Kennedy cut taxes, he lowered the top marginal tax from 91% to 65%. At the time, many congressional Republicans balked – they said it was more important to reduce the debt than to cut taxes. By 2012 standards, this seems almost amusing, but a half-century ago, some Republicans were quite serious about fiscal responsibility.
Kennedy overcame GOP objections, noting that the higher rates, instituted during World War II, were no longer necessary. For that matter, the debt was quite modest – Eisenhower, thankfully, kept taxes high throughout the 1950s, which helped the nation’s finances secure – and the deficit when Kennedy took office was only about $3 billion.
But what really matters here is how the cuts were shaped. Unlike contemporary Republican policy, JFK’s cuts were deliberately crafted so that the rich wouldn’t be the sole beneficiaries. As the Joint Committee on Internal Revenue Taxation explained at the time, the bottom 85% of the population received 59% of the benefits of Kennedy’s tax cut; the top 2.4% received 17.4% of the tax cut; and the top 0.4% received just 6% of it.
Paul Ryan would have voters believe that Romney is somehow a natural descendant of the Kennedy policy legacy. That’s just absurd.