EDITORIAL: Stimulating tax cuts

When have Democrats EVER agreed that tax cuts help the economy? They don't even believe it when tax cutters quote their paradigm of virtue John Kennedy when he cut taxes across the board, and said, "A rising tide lifts all boats." If they believed in it on Kennedy's evidence, they wouldn't have been so hell-bent against it when Reagan proposed it. Democrats know it works but have too much invested in denying it because that's the way they have combatted Republicans for so long. They can't change now. They won't change now even though they know it would be the right thing to do for policy, but they think it is the wrong thing to do politically. They just can't agree with anything Republicans have supported for so long.

The reason that many people don’t believe that Reagan’s and especially Bush’s tax cuts lift everyone’s income is that it isn’t true. The chart below is for real median income for full time white male workers, i.e. “Joe Six Pack.” Joe’s real median income rose consistently through 1973, but has essentially stagnated since that time. Joe exceeded his 1973 income only in the years 1999 and 2000. (Real median household income continued to grow through the end of the 1990's due to women's workforce participation growing from 45% to 60% and a reduction in wage discrimination.) Looking at how Joe fared after tax cuts, Joe’s income continued to go up after the Kennedy tax cuts lowered the top marginal rate from 91%. Joe’s income initially went down after Reagan lowered the top rate from 70% to 50%, but then grew after the economy recovered from the Volcker induced, inflation busting recession of the early 1980’s. Oddly, Joe’s income did go up when Clinton increased the top marginal rate, again a period of economic growth. Joe’s income then went down again when Bush lowered the top rate to 35%, even during periods of overall economic growth. Based on this data, lowering the top marginal rate from 91% to 70% was good for Joe. Although other factors may have been at work, lowering the top marginal rate from 70% to 50% appears to have helped Joe. But Bush’s tax cuts clearly haven’t helped Joe. 2006 $45,933 2005 45,129 2004 45,467 2003 46,199 2002 46,371 2001 46,454 2000 47,129 1999 47,449 1998 45,948 1997 45,239 1996 44,455 1995 44,027 1994 43,641 1993 43,738 1992 44,443 1991 44,686 1990 44,985 1989 46,585 1988 46,285 1987 46,356 1986 46,718 1985 45,912 1984 45,886 1983 44,471 1982 44,600 1981 45,049 1980 45,941 1979 46,548 1978 46,400 1977 45,534 1976 44,957 1975 44,075 1974 44,718 1973 46,773 1972 45,986 1971 42,991 1970 42,837 1969 42,552 1968 39,912 1967 38,715 1966 38,163 1965 37,160 1964 35,871 1963 35,155 1962 34,197 1961 33,510 1960 32,414 http://www.census.gov/hhes/www/income/histinc/p36w.html

"When have Democrats EVER agreed that tax cuts help the economy?" The answer to that is: Yes. John F. Kennedy argued vehemently for tax cuts in order to stimulate the economy. Funny how democrats idolize Kennedy yet have amnesia when it comes to Kennedy's fiscal policies. Kennedy's tax cuts were passed after his death.