Move over Warren, we don’t need the Buffett Rule. There’s a new rule in town, let’s call it the JFK rule!
In a recent forbes.com article, Peter Ferrara skewers the Washington Post for misleading it’s readers about Rep. Paul Ryan’s budget plan.
The reason is really quite simple. The Washington Post doesn’t understand that lower tax rates in combination with spending restraint lead to a growing economy, which leads to higher tax revenues flowing into the government, which leads to lower budget deficits. This has worked every time it is tried. I especially liked the following insight which he quotes from President Kennedy.
It is a paradoxical truth that tax rates are too high today, and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the tax rates….[A]n economy constrained by high tax rates will never produce enough revenue to balance the budget, just as it will never create enough jobs or enough profits.
And after President Kennedy cut taxes the result was positive as Ferrara observes.
Kennedy’s proposed tax rate cuts were adopted in 1964, cutting the top tax rate from 91% to 70%, as well as reducing the lower rates. The next year, economic growth soared by 50%, and income tax revenues increased by 41%! By 1966, unemployment had fallen to its lowest peacetime level in almost 40 years. U.S. News and World Report exclaimed, “The unusual budget spectacle of sharply rising revenues following the biggest tax cut in history is beginning to astonish even those who pushed hardest for tax cuts in the first place.” Arthur Okun, the administration’s chief economic advisor, estimated that the tax cuts expanded the economy in just two years by 10% above where it would have been.
So, Warren, what rule do you think is best for America? Your rule or the JFK rule?