The election of Barack Obama has sometimes been characterized as a return of John F. Kennedy’s “Camelot.” Both Obama and JFK were young, attractive, articulate senators, with accomplished wives with young children.
Both Kennedy and Obama came to office amidst economic concerns. But when Kennedy became President, higher-income people paid significantly higher rates on their taxes than middle-income workers. Sound familiar? That’s exactly what President Obama wants.
But not President Kennedy. He thought tax rates on high-income earners were too high and stifled investment. And Kennedy’s push for lower tax rates resulted in a burst of economic growth and economic recovery.
Kennedy began a trend moving tax rates in the right direction—down. President Obama is taking tax rates the other direction.
Of course, it goes without saying that Obama isn’t Ronald Reagan, either. Reagan continued Kennedy’s push toward lower, flatter tax rates paid from a broader tax base.
Ironically, Obama isn’t even Bill Clinton. The Clinton administration aggressively promoted free trade, which helped spur economic growth. As a candidate, Obama supported protectionist policies, and as president he included a “Buy American First” provision in the economic stimulus package.
President Obama, who has ballooned the budget deficit and the national debt to levels unthinkable just a few weeks ago, says not to worry; he’ll cut the federal deficit in half by the end of his first term in office. That’s a good idea, if he can do it.
But he also wants to raise taxes on high-income workers to help pay off that debt. In other words, he wants to be the anti-Kennedy.
In truth, the biggest difference between Obama and Kennedy (and Clinton and Reagan) is that Obama’s predecessors saw the tax code as either positively or negatively linked to economic growth, while Obama seems to see it primarily as a tool for wealth redistribution.
As Kennedy said in 1963, “The largest single barrier to full employment of our manpower and resources and to a higher rate of economic growth is the unrealistically heavy drag of federal income taxes on private purchasing power, initiative and incentive.”
But right now the U.S. income tax system is already so progressive that the bottom 40 percent of workers pay virtually no income tax now. And the new wealth transfers in the “stimulus” package will mean even more Americans will pay no income tax.
But if Obama is no Jack Kennedy, there is a president he might better be compared to: Lyndon Johnson, Kennedy’s successor, whose Great Society programs tried to spend our way back to prosperity.
Unfortunately, no one has ever wanted to be considered the new Lyndon Johnson.