Monday, May 29, 2017

OK GOPs. Let's bring back JFK's "tax cut"

On his 100th birthday, I want to give a little context to a certain claim that is sometimes floated regarding John F. Kennedy. Right-wingers will often try to justify tax cuts by saying something like "Even JFK cut taxes and they worked! Why have liberals lost their way?"

The first sentence is true- John F. Kennedy indeed did ask for a tax cut, which was working its way through Congress when Kennedy was shot in November 1963, and was signed into law 3 months later as the Revenue Act of 1964. This lowered tax rates across the board for both individuals and corporations, and established a minimum standard deduction which reduced taxes further for many people. And from 1964-1966, the US economy boomed, with GDP growth consistently being between 6-10%. Unemployment also fell from 5.2% to 3.5% from 1964 to 1969 (a bunch of Boomers entering the work force and a major ramping up of spending in Vietnam and the Great Society didn't hurt, either).

By 1965, when Kennedy's proposed tax cut was fully phased in, there were 25 (!) federal tax brackets, with the rates sliding higher with income. Here are some of the key cutoff points (using this handy site from the Tax Foundation), and I'll adjust for inflation and use 2017 dollars, so you can have an idea about how this would translate into the modern day.

Tax brackets for selected income levels, married filing jointly 1965
(adj for inflation)

14% $0-$7,651
19% $30,602-$61,205
22% $61,205-$91,806
25% $91,806-$122,409
28% $122,409-$153,012
32% $153,012-$183,614
36% $200,000
42% $250,000
48% $300,000
50% $340,000
53% $400,000
55% $500,000
60% $675,000
64% $1,000,000
68% $1,225,000
70% $1,530,721+

And if you look at difference between then and now, you'll notice that the capital gains tax rate was a flat 25% in 1965, the same as the post-Obamacare 25% that the rich pay for long-term cap gains and above the 15% rate on dividends that we have today. The top corporate rate in 1965 was 48%, which is a lot more than the 35% top rate (that no regular corporation pays) that Paul Ryan and company whine about in 2017.

So hey, if Republicans want to pay tribute to JFK and bring back the same tax brackets as we had under his early '60s "tax cut", count me in! It'd definitely work better than the oligarchical, pro-rich, pro-corporate crap we have today.

And today's Republicans seem to forget this statement of JFK's, which helps to explain his spending philosophy, and how the nation must invest and lead, and put our money where our mouth is.

PS- And minimum wage in 1965, using 2017 dollars? $9.70 an hour. Bring that back too, GOPs!

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