Give 'Em 39.6%, They'll Take 91%
Egalitarianism: Economist Paul Krugman wants America to return to the more "moral" tax policies of the 1950s when it "made the rich pay their fair share." But JFK would take issue with his morals.
In a recent New York Times column, Krugman pines for the days when "the top bracket faced a marginal tax rate of 91, that's right 91%."
He calls taking 90 cents of every additional dollar an individual earns at that level "economic justice."
President Kennedy called it stupid.
He and his economic advisers argued it was stifling business investment. So they slashed the top rate to 70%, ignoring the left's class warfare arguments.
They understood that a rising tide lifts all boats. Sure enough, Kennedy's tax cuts spurred economic activity, which in turn created new jobs, expanded the tax base and almost wiped out a $7 billion federal budget deficit.
The results were so impressive, they planned to chop the top rate even lower.
"Because tax revenue would continue to rise with an expanding economy, they argued that it would be possible and even necessary for the government again and again to cut tax rates," said New York University economist Richard Sylla, co-author of "The Evolution of the American Economy."
Unfortunately, President Johnson reversed course, hiking rates to fund his disastrous War on Poverty. It would take President Reagan to pick up where Kennedy left off.
Krugman argues today's lower rate of 35% has somehow created an idle class with "armies of servants and yachts."
"Today," he protests, "any hint of policies that might crimp plutocrats' style is met with cries of 'socialism.'"
As a matter of fact, that's what we used to call penalizing success in this country.
In 1960, Barry Goldwater kicked hard against the socialist assumption that government has an unlimited claim on the wealth of the people, and that the only relevant question was what share of its claim politicians should exercise.
"A man's earnings are his property as much as his land and the house in which he lives," the Arizona senator argued.
Goldwater asserted it was "immoral" to deny man this basic economic freedom.
"How can he be free if the fruits of his labor are not his to dispose of, but are treated instead as part of a common pool of public wealth?" he demanded in "The Conscience of a Conservative." "Property and freedom are inseparable: To the extent government takes the one in the form of taxes, it intrudes on the other."
Are you listening, Bill Kristol?
Goldwater believed the only "fair share" is one flat rate for every taxpayer, working class or wealthy, and no more.
"The idea that a man who makes $100,000 a year should be forced to contribute 90% of his income to the cost of government while the man who makes $10,000 is made to pay 20% is repugnant to my notions of justice," he said. "I do not believe in punishing success."
Did you hear that, Gov. Jindal?
Goldwater said the real aim of hyperprogressive taxation is "to redistribute the nation's wealth."
Such "an objective does violence both to the charter of the republic and the laws of nature," he said. "We are all equal in the eyes of God but we are equal in no other respect. Artificial devices for enforcing equality among unequal men must be rejected if we would restore that charter and honor those laws."
Are you listening, Speaker Boehner?
There is nothing "patriotic" about paying more in taxes just to finance President Obama's new entitlements. If he gets a 39.6% rate, he'll just as soon take 91%.
And he and his redistributionists won't stop with "millionaires and billionaires." Or those making $250,000.
Once they're sufficiently soaked, they'll come after the middle class until we're all stagnating in the same "swampland of collectivism," as Goldwater so presciently warned.