78-16-B8
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Taxation[edit]
Transcript[edit]Congress has finally stewed around with a so-called tax reduction until it got something it could call a tax cut but you and I won't have any extra money to spend. I'll be right back. We are told by voices from our Mt. Olympus—Washington D.C. that is—that our taxes have been cut, but don’t count on having any extra money to spend. Oh there are one or two parts of the bill that offer some benefit to the economy with changes in the business and capital gains tax; but an across the board tax cut, it is not. The Kemp-Roth bill is supposedly dead, a victim of assassination by those who believe in higher progressivity in the income tax and that taxation is a method of redistributing the earnings from the most productive to the least productive. Kemp-Roth is not dead,—ideas do not die, it is simply waiting for the wisdom of the people to be accepted by the majority in Congress. Andrew Mellon who was Sec. of the Treasury under Presidents Harding, Coolidge and Hoover, in his book "Taxation: The Peoples Business" explains why the progressive tax idea is really a rip-off, not of the rich but of the worker. He says: "The history of taxation shows that taxes which are inherently excessive are not paid." And then he explains away the foolish demagoguery of those who want ever higher surtaxes and label every effort by individuals to minimize their tax burden as a shameful use of loopholes. Let me read a paragraph from his book. "The high tax rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business and invest it in tax-exempt securities or find other lawful methods of avoiding the realization of taxable income. The result is that the sources of taxation are drying up; wealth is failing to carry it's share of the tax burden; and capital is being diverted into channels which yield neither revenues to the govt. not profit to the people.... What rates will bring in the largest revenue to the govt., experience has not yet developed, but it is estimated that by cutting the surtaxes in half, the govt., when the full effect of the reduction is felt, will receive more revenues at the lower rates OF TAX than it would have received at the higher rates." Acting on the philosophy expressed in that paragraph Mellon succeeded in getting Congress to cut the highest bracket from the World War I high of 66% to 25%. There were no screams of protest about benefiting the rich and very soon there was such an expansion of the economy and such prosperity FOR ALL THE PEOPLE that we actually made a huge dent in the war debt. When John F. Kennedy cut taxes across the board in the 60's, the top marginal rate was 91% and the base 20%. He cut these to to 70% and 14%. The result was the longest, sustained, economic expansion in the history of out country. Kemp Roth would further lower the rates to a 50% top and an 8% base. And our most noted economists predict another economic expansion. It is time for Washington to hear from the people. This is Ronald Reagan. Thanks for listening. |
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