Wednesday, September 29, 2010

Johnny, They Hardly Know Ye

Tax-cutting Republicans love JFK.  Well, it might be more accurate to say that they love their uninformed caricature of JFK.

Ever since Ronald Reagan made the GOP the party of "all tax cuts, all the time," every time the political debate turns to taxes, Republicans re-discover their crush on JFK.  Right on cue, this past Monday, Rep. Michael McCaul, R-TX, appeared on MSNBC's "Hardball" to make the Republican case for extending all of the Bush tax cuts, including those on income over $250,000 a year.  And he once again trotted out the Democratic tax-cutter:

There was a president by the name of John F. Kennedy who said let's cut taxes to get the economy moving again, and it worked…. Kennedy said that tax increases will not get the deficit and debt down and it will not create jobs because he knew it kills jobs.  It seems to me that the party of Kennedy has gone far astray from his principles.
In the Connecticut senate race, Republican candidate Linda McMahon (of pro wrestling fame)  has used footage of JFK talking about tax cuts to suggest that he would support her position.

It's hard to know where to start, but let's begin with the kernel of truth here.  It is the case that Kennedy did propose a tax cut during his short presidency (though it was actually pushed through Congress by LBJ, one of the more unpopular presidents among today's Republicans).

What Rep. McCaul does not say, and probably does not know, is that Kennedy was a rather reluctant tax cutter, in part because he did not want to increase the deficit.  The push for the tax cut came from Walter Heller, Kennedy's chairman of the Council of Economic Advisors.  Heller's reasoning was explicitly Keynesian: he believed that economic growth could be stimulated through a larger deficit, and thought tax cuts would help achieve that goal (in short, the opposite of contemporary Republican dogma that states that cutting taxes can reduce the deficit).  According to Richard Reeves' definitive biography, President Kennedy: Profile of Power, when Heller first proposed the cut early in the administration, Kennedy replied: "I asked people to sacrifice and you want me to start by announcing that I'm reducing their taxes?"

Eventually, in part due to fears that a recession might doom his re-election hopes in 1964, JFK was persuaded that it made both economic and political sense to propose a tax cut in his January 1963 State of the Union address.  His plan, he told Congress, was to reduce the current rates "which now range between 20 and 91 percent to a more sensible range of 14 to 65 percent."

Do not adjust your screen.  You read that correctly.  The top marginal tax rate in 1963 was 91 percent for income above $400,000 a year.  It was 50 percent for income between $32,000 and $36,000 a year.  John Kennedy was calling for a 65 percent top marginal rate to spur the economy, and this has made him the GOP's favorite Democrat, the one today's Democrats should emulate, whose principles his party has abandoned.  Barack Obama is calling for a top rate of 39.6 percent and he is labeled a "socialist" by that same GOP.  One can only imagine what new terms of opprobrium the right would need to create if Obama proposed a 65 percent top tax rate.

It is hard to know whether this attempt by modern Republicans to claim JFK as one of their own is the result of insincerity or ignorance, but in either case it is at odds with historical reality.  Kennedy proposed cutting taxes because the massive debt from World War II, which necessitated those high tax rates, had by then reached lower, more reasonable levels.  His decision, in short, was contextual: taxes were exceedingly high, the debt was relatively low, and the economy needed stimulus.  Today's Republicans are ideological.  There is no context in which they are against tax cuts, and there is no context in which they see tax increases as justifiable.

Interestingly, one of the critics of JFK's 1963 proposal predicted this.  Democratic Sen. Albert Gore Sr., father of the former vice-president, said at the time: "Once taxes are cut, they are not likely to be reimposed…. Congress will always be ready to cut taxes, never ready to raise them.  It is a beautiful theory about moving taxes up and down, but it is only a theory, utterly impractical in our system."

President Clinton succeeded in proving Gore Sr. wrong in 1993, raising the top marginal tax rate despite Republican claims that economic apocalypse would follow.  Seven years of economic expansion ensued. President Obama is trying to prove Gore wrong again.  But since Congressional Democrats now seem too scared to even try before the midterm elections, whether he succeeds or not will depend on the vote in November.  Despite the fact that a solid majority supports the president's plan, every sign indicates that the voters will send to Washington enough ideological Republican tax cutters to thwart him.


  1. I wish I could earn college credits just reading your blog. I learn so much about the history of American politics with each entry.