The extension of the Bush Tax Cuts is an issue that may be decided by the Lame Duck session of Congress. President Obama was initially against extending the cuts for anyone making more than $200 or $250K per year. It looks like he may find himself in a position to finally compromise after two years of cramming through a liberal agenda. I wanted to look at a quote about taxation to shed some light on the Bush Tax Cuts.
"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."
What else did this supply-side politician have to say?
"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...economy restrained by high tax rates will never produce enough revenue to balance the budget, just as it will never create enough jobs or profits."
Who was this obviously conservative fiscal policy-maker? None other than President John F. Kennedy. He went on to cut tax rates and stimulate the economy. Imagine that...Reagan took a play out of the Kennedy play-book that created a twenty-five year boom to our economy. But is all goes back to a bold move on Kennedy's part to cut tax rates. Will Obama be smart (prudent) enough to recognize the wisdom in Kennedy's words? We shall see.