JFK's New York Economic Club Speech
Today is the 50th anniversary of President Kennedy's speech to the New York Economic Club, which to this day stands out as a landmark in making the argument that the economic growth generated by tax cuts winds up generating more revenue for the government; in other words, that at a certain level tax cuts decrease the federal deficit rather than increase it:
I am talking about the accumulated evidence of the last 5 years that our present tax system, developed as it was, in good part, during World War II to restrain growth, exerts too heavy a drag on growth in peace time; that it siphons out of the private economy too large a share of personal and business purchasing power; that it reduces the financial incentives for personal effort, investment, and risk-taking.
In short, to increase demand and lift the economy, the Federal Government's most useful role is not to rush into a program of excessive increases in public expenditures, but to expand the incentives and opportunities for private expenditures....next year's tax bill should reduce personal as well as corporate income taxes, for those in the lower brackets, who are certain to spend their additional take-home pay, and for those in the middle and upper brackets, who can thereby be encouraged to undertake additional efforts and enabled to invest more capital....
In short, 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 rates now....The purpose of cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus.
This is one of my favorite Kennedy speeches.
by Editor | Dec 14, 2012 at 8:21 am
Related Topics: Taxes
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