I must confess that I have always thought that Democrats never saw a new tax they didn’t love, nor a tax cut they didn’t hate. But I must admit that I was shocked to find that I was wrong.
One of the most revered Democratic presidents in the pantheon of the Democratic Party is John F. Kennedy. I was totally taken by surprise with his philosophy of taxes. Especially since it presents exactly the same tax philosophy as George W. Bush with even more background arguments.
And John F. Kennedy’s philosophy proved to be right. It launched the U.S. into a phenomenal economic recovery even while we spent billions to put a man on the moon.
The problem we face today is that Democrats are crying that this philosophy is going to bring about an “economic holocaust”.
Let me quote from John F. Kennedy’s speech to the Economic Club of New York on Dec. 14, 1962:
If government is to retain the confidence of the people, it must not spend more than can be justified on grounds of national need or spent with maximum efficiency.
The final and best means of strengthening demand among consumers and business is to reduce the burden on private income and the deterrence to private initiative which are imposed by our present tax system: And this administration pledged itself last summer to an across-the-board, top-to-bottom cut in personal and corporate income taxes to be enacted and become effective in 1963.
I’m not talking about a quickie or a temporary tax cut, which would be more appropriate if a recession were imminent; nor am I talking about giving the economy a mere shot in the arm to ease some temporary complaint. I am talking about the accumulated evidence of the last five years that our present tax system, developed as it was in good part during World War II to restrain growth, exerts too heavy a drag on growth in peace time; that it siphons out of the private economy too large a share of personal and business purchasing power; that it reduces the financial incentives for personal effort, investment and risk-taking.
In short to increase demand and lift the economy, the federal government’s most useful role is not to rush into a program of excessive increases in public expenditures, but to expand the incentives and opportunities for private expenditures.
The vast majority of Democrats disagree with JFK’s philosophy of why deep, permanent tax cuts greatly expand the economy. Even Ted Kennedy argues today against his own brother.
Tom Daschle and Nancy Pelosi warn of catastrophic repercussions to the elderly, the youth, the educational systems and the national debt. What’s really at issue here are two antithetical philosophies of economics.
The Bush plan operates on the basis of free enterprise. That is, if the entrepreneurs have more money to invest, they will expand their companies, which will create more jobs, which will create more of a taxpayer base, which will increase tax revenues in the long run. All of this without the drag of unemployment and subsidies to ailing industries.
The prevailing Democratic philosophy is that of big taxes to support Big Government that micro-regulates the economy and various bureaus. It is a socialistic offspring which requires enormous taxes to support. These taxes are levied at the real economic producers, who in turn do not have the money to expand. Thus there are fewer companies started, fewer companies able to expand, fewer jobs and a smaller tax base that depends most heavily on the entrepreneurs.
The government creates more bureaus to deal with the ailing economy, the jobless and to dispense subsidies to ailing industries like agriculture, etc., and to create government handouts to the nouveaux poor.
Creative investing is strangled by this horribly wasteful system of government, which seeks to micro-manage the economy. The repeated failure of communist and socialist economies should be enough to show all but the most blind the fact that this thinking does not work.
A bureaucrat has no incentive to save, but instead to spend our tax dollars. His all-consuming motives are the preservation of his bureau, to keep increasing his bureau’s federal funding and to keep his job.
Bruce Bartlett of the National Center for Policy Analysis correctly summed up the Democrats’ strategy. He commented on Sen. Edward Kennedy’s speech to the National Press Club in Washington in January 2003. The title of the speech was “America’s New Challenge: National Security, Economic Recovery and Progress for All Americans.” Bartlett said:
But the true topic of the speech will be why taxes should be raised by rescinding tax cuts scheduled for future years.
Republicans should welcome Kennedy’s initiative. Let’s have an honest debate about whether the American people are paying too little in taxes, whether they are willing to pay more just so we can have big budget surpluses, and whether they are willing to finance Democrats’ big spending plans for prescription drugs, agriculture subsidies and whatever else they think will buy them votes.
I have no doubt whatsoever how the American people will respond if asked to choose. They will say “no” resoundingly to higher taxes and bigger government.
Democrats are trying every way possible to camouflage their real motives. But the truth is, they are just pushing for the same old high taxes to support a big intrusive government that they usually do.
Americans, learn what’s really going on and don’t vote on the basis of their scare tactics. Find out what the real economic facts are.
