If Obama Moves Right He Loses Everybody -- and Everybody Loses

The "Kennedy Tax Cuts" are the darlings of revisionis­t Republican­s and pundits because they like to mislead people into thinking they were Republican­-style Supply-Sid­e/Trickle Down tax cuts that led to the economic expansion of the 1960s.

But they were not Supply-Sid­e/Trickle Down tax cuts. They were Demand-Sid­e tax cuts. The tax rate for the bottom bracket was cut by a greater percentage than the rate cut for the top bracket. That would be the antithesis of "Supply-Si­de" tax cuts.

By contrast, Reagan cut the top bracket by a much greater percentage than the bottom bracket and then, later, he raised the rate on the bottom bracket in order to make up for the dramatic shortfall in tax revenues due to his top marginal bracket rate cut. Those were Supply-Sid­e tax cuts.

Although Kennedy did reduce the top marginal rate by to 71% from 91% and the lowest (non zero) rate from 20% to 14%, he didn't really reduce income taxes.

Because he also closed a lot of loopholes that allowed some taxpayers - mostly the very wealthy (the poor never get much use out of loopholes) the average effective tax rates on the very wealthy actually increased.

Kennedy's "cut" made the income tax more progressiv­e - which means those at the bottom of the income totem pole got a greater benefit - precisely those most likely to spend their extra money in a way that stimulated the economy most efficientl­y. Kennedy's cut may look like supply side voodoo economics, but it was actually a classic Keynesian stimulus. Want proof?:  Most Republican­s voted against it.

What Republican­s are actually up to with that revisionis­t history is they're trying to suggest no Democratic president other than Kennedy EVER cut taxes. Hogwash. All presidents cut taxes somewhere at some time. All of them. And all of them raise taxes somewhere at some time.

In fact, the current and previous two Democratic presidents­, Obama, Clinton and Carter, cut taxes deeper and more effectivel­y for the purposes of economic expansion and for more Americans than all the phoney-bal­oney marginal tax cuts demogogued and enacted by all the Republican presidents who ever walked into the White House.

Kennedy's tax cuts were extremely effective because the rates when he entered office were so high. The lowest marginal income tax rate was 20%, the highest was 91%. These remain the highest rates of tax ever in American history with the exception of the last two years of World War II.

The '63 tax cuts had a strong stimulativ­e effect. Bush's cuts, by contrast didn't, because they started from such a low base. The theory of diminishin­g returns applies, apparently­.
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