The American Spectator

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When you track real families — real people — over time, you find that people who are poor at the start…have the biggest subsequent gains in income. Amazingly, the richer a person is…the smaller the subsequent income gains. Those in the top 1% actually lose income over time.

br> Or, as Nobel Prize winning economic historian Robert Fogel wrote in 2004, “In every measure that we have bearing on the standard of living…the gains of the lower classes have been far greater than those experienced by the population as a whole.” Under Reaganomics, the rich have gotten richer and the poor have gotten richer too. p> The Kennedy Tax Cuts br> Reagan was not the first or the last to adopt sweeping tax cuts to boost the economy. It has happened four, perhaps five, times in the last century, with virtually the same results every time. One of these was adopted under President John F. Kennedy, who cut the top tax rate from 91% to 70%, seeking as well a 30% across the board rate cut for everyone else. Compared to national income and the total budget, the Kennedy tax cut was three times larger than the Bush tax cut, which only reduced the top tax rate a measly 4.6 percentage points from 39.6% to 35%. Kennedy said, br> /p>

Our true choice…is between two kinds of deficits — a chronic deficit of inertia, as the unwanted result of inadequate revenues and a restricted economy — or a temporary deficit of transition, resulting from a tax cut designed to boost the economy, produce revenues, and achieve a future budget surplus. The first type of deficit is a sign of waste and weakness — the second reflects an investment in the future.

br> Kennedy also said, “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 tax rates….[A]n economy constrained by high tax rates will never produce enough revenue to balance the budget, just as it will never create enough jobs or profits.”

In response to the Kennedy tax cuts, the economy grew by 10% in just 2 years, with the annual economic growth rate increasing by 50%. More than 1 million jobs were created in the following 4 years, and unemployment fell to its lowest peacetime level in more than 30 years. Federal income tax revenues grew by 41% during those 4 years, with U.S News and World Report saying, “The unusual budget spectacle of sharply rising revenues following the biggest tax cut in history is beginning to astonish even those who pushed hardest for tax cuts in the first place.”

p> The End of Prosperity br> Laffer et al. explain why they think the end is now near: br>