GOP Budget Slashes Taxes
Rep. Paul Ryan (R-WI) has thrown down the gauntlet again:
The plan from House Budget Committee Chairman Paul Ryan (R-Wis.) would collapse the current system of six tax brackets for individuals into two marginal rates: 10 percent and 25 percent, according to GOP aides. The proposal would also lower the top corporate tax rate to 25 percent, and scrap the Alternative Minimum Tax.
That’s how Reagan got us out of the Carter stagflation malaise, he slashed taxes.
The changes to the federal tax code were much more substantial. The top marginal tax rate on individual income was reduced from 70 percent to 28 percent. The corporate income tax rate was reduced from 48 percent to 34 percent. The individual tax brackets were indexed for inflation. And most of the poor were exempted from the individual income tax. These measures were somewhat offset by several tax increases. An increase in Social Security tax rates legislated in 1977 but scheduled for the eighties was accelerated slightly. Some excise tax rates were increased, and some deductions were reduced or eliminated.
Even in 1961, lefty hero JFK knew that cutting taxes is good for the economy:
Kennedy further argued in a January 24, 1963 message to Congress, “As I have repeatedly emphasized, our choice today is not between a tax cut and a balanced budget. Our choice is between chronic deficits resulting from chronic slack, on the one hand, and transitional deficits temporarily enlarged by tax revision designed to promote full employment and thus make possible an ultimately balanced budget.” Lest members of Congress failed to get the point: “I repeat: our practical choice is not between a tax-cut deficit and budgetary surplus. It is between two kinds of deficits: a chronic deficit of inertia, as the unwanted result of inadequate revenues and a restricted economy; or a temporary deficit of transition, resulting from a tax cut designed to boost the economy, increase tax revenues, and achieve–and I believe this can be done–a budget surplus.”
So, if the Democrats oppose the tax cuts — and I’d bet my last dollar that they will — they’re turning their backs on a policy both Democrat and Republican Presidents have used to stimulate the economy.