Extending Bush Tax Cuts Could Be GOP Ticket to Victory

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Did you prove they did not ?
Besides, you did not answer the question:
Steve of IL does not know his JFK. Says:
“The reason the tax cuts were passed at that time was that it was generally thought that 91% top margin was excessive and no longer needed. So JFK proposed a reduction to 70%“.
Absolutely WRONG Let JFK tell his story. Not Steve‘s version of convience:
“According to President John F. Kennedy“:
“Our true choice is not between tax reduction, on the one hand, and the avoidance of large Federal deficits on the other. It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget just as it will never produce enough jobs or enough profits… 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.”
Always change subject when wrong.

Bill Hedges of MO 11:35PM July 26, 2010

The tax cuts were politics. But you also don't get that 70% is still higher than 35% when growth rates were lower than in the 1960s. I'd like you to address this issue. You haven't so far.

steve of IL 9:54PM July 26, 2010

Steve of IL does not know his JFK. Says:
“The reason the tax cuts were passed at that time was that it was generally thought that 91% top margin was excessive and no longer needed. So JFK proposed a reduction to 70%“.
Absolutely WRONG Let JFK tell his story. Not Steve‘s version of convience:
“According to President John F. Kennedy“:
“Our true choice is not between tax reduction, on the one hand, and the avoidance of large Federal deficits on the other. It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget just as it will never produce enough jobs or enough profits… 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.”
Always change subject when wrong.

Bill Hedges of MO 9:39PM July 26, 2010

Kennedy used an appeal to Congress to pass the tax cuts based on economic growth arguments. This is understandable since there was a slight recession from the second quarter of 1960 to February 1961. What isn't also mentioned is that Kennedy also called for increased government spending in January 1961 as soon as he took office. Thus, he supported a fiscal stimulus as a Keynesian policy. Interest rates were low in the early sixties and most recessions didn't last very long even if they were deep recessions. The top margin was 91% and it was lowered to 70%. It wasn't so much tax cuts that created the high investment and growth in throughout the 1960s; it was the Vietnam War spending. This is widely agreed upon because the sharpest upturns in growth occurred after 1965 when military spending increased dramatically.
You also fail to note why there were higher rates of growth between 1945 and 1980 despite high marginal tax rates but low rates of growth during GOP administrations when top marginal income tax rates and capital gains tax rates hit the lowest point since the 1920s. 90% is too high even for top margin. JFK knew this and reduced it. The US economy still experienced some of its highest growth in the 1950s when top margin was 90%. GDP growth isn't usually determined by tax rates; its about aggregate spending. The 1953-4 recession was prompted by sudden drops in military spending as the Korean War ended. The 1957-58 recession-a particularly deep one-was preceded by a slight budget surplus and a slow down in federal spending. Since WWII, federal spending has been an essential driver of the economy, not tax cuts.
The Heritage Foundation is giving misleading information as usual. First of all, Hoover presided over a horrible depression which began to abate as soon as FDR began his New Deal reforms. Unemployment dropped dramatically after 1933 and output rose. WWII finally took the US out of the Great Depression which means it was spending not monetary adjustment or tax cuts that achieved this end.
The boom after the 1920s recession was based on bubbles. First a real estate bubble in Florida which collapsed disastrously and then the stock market bubble which collapsed in 1929. Both these bubbles were enabled by tax cuts for the wealthy and a thorough lack of regulation. The growth of the 1920s was not so much spurred by consumer demand but by leveraged investment much as it has been since the late 1990s. The distribution of income in the 1920s was nearly as bad as it is now. The top 1% of the income strata earned over 21% of the income. Much of this money found its way into the stock market. The bubble was based on excessive margin buying. Speculators borrowed over two thirds of the face value of the stocks they were buying. Over $8.5 billion was out on loan, more than the entire amount of currency circulating in the U.S. at the time.
http://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929#cite_note-18
The 1920s was no economic model.

steve of IL 8:20PM July 26, 2010

“The reason the tax cuts were passed at that time was that it was generally thought that 91% top margin was excessive and no longer needed. So JFK proposed a reduction to 70%“.
Absolutely WRONG Let JFK tell his story. Not Steve‘s version of convience:
“According to President John F. Kennedy“:
“Our true choice is not between tax reduction, on the one hand, and the avoidance of large Federal deficits on the other. It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget just as it will never produce enough jobs or enough profits… 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 Kennedy tax cuts”
“President Hoover dramatically increased tax rates in the 1930s and President Roosevelt compounded the damage by pushing marginal tax rates to more than 90 percent. Recognizing that high tax rates were hindering the economy, President Kennedy proposed across-the-board tax rate reductions that reduced the top tax rate from more than 90 percent down to 70 percent. What happened? Tax revenues climbed from $94 billion in 1961 to $153 billion in 1968, an increase of 62 percent (33 percent after adjusting for inflation)”.
“The Kennedy tax cuts”
“Just as happened in the 1920s, the share of the income tax burden borne by the rich increased following the tax cuts. Tax collections from those making over $50,000 per year climbed by 57 percent between 1963 and 1966, while tax collections from those earning below $50,000 rose 11 percent. As a result, the rich saw their portion of the income tax burden climb from 11.6 percent to 15.1 percent."
http://www.heritage.org/Research/Reports/2003/08/The-Historical-Lessons-of-Lower-Tax-Rates

Bill Hedges of MO 6:10PM July 26, 2010

Treasury Secretary Tim Geithner publicly announced that the Bush tax cuts will be extended for all but the top 2% of households. Those individuals earning over $200,000 will see an increase in their top margin from the current 35% to 39.6% as will couples filing jointly earning over $250,000. Some upper middle class tax payers will even see an additional tax cut due to Obama's proposed expansion of the current 28% bracket which will reduce existing taxes on some income now being taxed at 33%. This plan is more than reasonable and actually quite conservative. It is needed for economic recovery and to lower deficits. The combination of middle class tax cuts for the vast majority while raising taxes on the very affluent is fair and economically sound policy.
Tax cuts for the rich have been shown to be a disaster. People like Bill Hedges like to point out that when JFK lowered top margin by 21 percentage points the economy took off quickly. Not true. The Kennedy tax cuts, which weren't actually enacted until Johnson took office in 1964, didn't spur growth nor were they intended to; the US economy was already growing at a health pace mostly due to increased military spending for the Vietnam War. The reason the tax cuts were passed at that time was that it was generally thought that 91% top margin was excessive and no longer needed. So JFK proposed a reduction to 70%. This was still substantial but not like the 91% needed during WWII to fund the war and recovery. With the rapid growth of the 1960s global "economic miracle decade" such high taxes on the rich were no longer needed; the federal government already had sufficient revenue from a rapidly growing economy. However, it is frequently pointed out that LBJ, not wanting to chose between the Vietnam War and the War on Poverty, funded both out of increased borrowing. This, in combination with other factors, led to pent up inflation in the US economy, a collapse of the gold standard in 1971 and rampant inflation throughout the entire decade of the 1970s.
Reagan's tax cuts in the early 1980s led to some growth though it was lower on an average annual basis than during Carter's term in office. From 1981 to 1988, average annual real GDP growth was 3.37%; from 1977 to 1980 real average annual GDP growth rates 3.42%.
http://www.forbes.com/2004/07/20/cx_da_0720presidents.html
http://www.indexmundi.com/united_states/gdp_real_growth_rate.html
Interestingly, the four top ranked US presidents for average annual real GDP growth were all Democrats; three of the four were in office when the top margin was 70%. Clinton's top margin was 39.6% and real GDP growth between 1993 and 2001 was just about 3.6%. George W. Bush's real average annual rate of GDP growth between was about 2.1% from $11.347 trillion in 2001 to $13.312 trillion in 2008 estimated in chained 2005 dollars. This low real GDP growth was despite over $2.1 trillion in tax cuts between 2001 and 2010.
http://www.bea.gov/national/index.htm#gdp

steve of IL 5:17PM July 26, 2010