- The Washington Times - Thursday, April 26, 2012


Somewhere between the New Frontier and the Age of Obama, the Democrats turned fiercely anti-capitalism, anti-business, anti-wealth and anti-success.

Fifty-two years ago, with the approval of his party, John F. Kennedy called for cutting income tax rates across the board to get the U.S. economy “moving again.” That, he argued, would spur stronger economic growth and jobs.

To the egalitarians who said the tax cuts for those at the top would unfairly benefit the rich, Kennedy replied with a classic remark about growth economics that is rank heresy in the Obama White House: “A rising tide lifts all boats.”

There was a time when Democrats talked of increasing economic growth and expanding the economic pie. Now they never mention the word “growth” unless they’re talking about government spending. Instead, they talk of dividing the pie into tinier slices and “spreading the wealth” by raising taxes on the haves to give to the have-nots.

The result of this threatened redistribution is a pathetic 2 percent economic growth rate, nearly 13 million jobless, the highest poverty rate in 50 years and four years of unprecedented trillion-dollar budget deficits.

Kennedy didn’t live to see the benefits of his tax cuts that a Democratic Congress enacted. There were those who predicted the cuts would worsen the deficit. But the tax revenue that flowed from a growing economy ended up balancing the budget by the end of the decade.

Once, Democrats embraced political leaders of great inherited wealth, from Franklin D. Roosevelt to JFK, who never held a job outside of the government.

Now the party that once championed upward mobility spends its time attacking wealthy and successful businesspeople and thinking up devious ways to impose a new 30 percent surcharge tax on investors that would impose new barriers to capital investment, growth and job creation.

JFK would cringe at President Obama’s class-warfare assault on his presumptive presidential rival, Mitt Romney, solely because he has been successful, created jobs and made a lot of money.

Last week, Mr. Obama meanly characterized the former governor as someone who was raised with a silver spoon in his mouth.

The truth is, Mitt Romney gave away his inheritance to charity and made his money the old-fashioned way: as a hardworking capital investor in small startup companies he built into profitable, job-creating enterprises.

The economic lessons he learned over 25 years in business are the ones he wants to apply to the economy and a debt-ridden government on the brink of insolvency. They’re lessons one doesn’t learn as a neighborhood organizer or during a career in government.

But another, more recent Democratic president also pursued pro-growth, tax-cutting policies that led to an explosion of growth and jobs that Mr. Obama can only dream about.

While Mr. Obama is running around the country peddling his soak-the-rich scheme to raise taxes on capital gains, Bill Clinton is back in New York shaking his head in dismay because he did the exact opposite.

The former president wrote a book last year, “Back to Work: Why We Need Smart Government for a Strong Economy,” that contained a lot of blunt advice for Mr. Obama, who rejected it out of hand.

“We’re in a mess now,” Mr. Clinton wrote in the third year of Mr. Obama’s presidency. He criticized not only the Obama economy but also the president’s relentless attacks on big business and the corporate class.

“Many of them supported me,” Mr. Clinton said, “because I didn’t attack them for their success.”

When Mr. Clinton was elected in 1992, the economy was going through a short and shallow recession, growing at a modest 3 percent rate.

Then, in 1997, the Republicans in Congress got him to sign a tax-relief and deficit-reduction bill that cut the capital-gains tax rate from 28 percent to 20 percent.

“By 1998, the first full year in which the lower capital-gains rates were in effect, venture capital activity reached almost $28 billion, more than a threefold increase over 1995 levels, and by 1999, it had doubled again,” said J.D. Foster, chief economist at the Heritage Foundation.

The economy was in the early stages of an Internet-based, high-tech explosion of startup companies and the jobs that came with it. Many factors fed into that, but it is clear that Mr. Clinton’s capital-gains tax cut was the driving force behind the sudden growth.

“[T]he rapid development and application of these new technologies could not have occurred at such a rapid clip absent the enormous investment flows made possible by the reduction in the capital-gains tax rate,” Mr. Foster said.

Between 1997 and 2000, the economy averaged 4.2 percent real growth per year. Compare that to the feeble 1.7 percent growth in all of last year. Real wages rose by 6.5 percent, far stronger than the 0.8 percent in Mr. Clinton’s first term, and unemployment fell to a low of 4 percent.

But today’s far-left, storm-the-Bastille Democrats have turned their back on growth policies of the past, choosing instead to drink the anti-growth Kool-Aid of higher taxes on investment and jobs that assuredly will reduce both - to the nation’s peril.

Mr. Obama’s central argument on behalf of his anti-growth tax plans is that the “rich” do not pay their “fair share.”

But according to the Internal Revenue Service, the top 5 percent of income earners paid 58.7 percent of federal income taxes collected. The top 10 percent paid 70.5 percent. The top 25 percent paid 87.3 percent. The top 50 percent paid 97.7 percent.

The bottom 50 percent, many of whom pay no income taxes, paid just 2.3 percent of all income taxes.

If the rich are not paying their fair share, Mr. Obama had better tell us how much more he really wants them to pay. He also should explain how workers, employers and an anemic economy can possibly survive a tax burden that is heavier than the one we bear now.

Donald Lambro is a syndicated columnist and former chief political correspondent for The Washington Times.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide