New York Times columnist David Leonhardt claims, “G.D.P. growth has been stronger after recent tax increases on the wealthy.” To prove it he writes, “The economy has performed better under Democratic Presidents during the last half century.”
This might make sense if Eisenhower and Nixon had cut tax rates for the wealthy and JFK and LBJ raised them. But the opposite happened. It might also make sense if Clinton had raised the capital gains tax rate in 1997 rather than cutting it from 28% (under Reagan-Bush) to 20%.
President Eisenhower put the highest tax rate up to 92% in 1953-54 and the lowest rate to 22%. By contrast, President Kennedy’s 1963 plan for “getting America moving again” proposed to cut income tax rates to 14-65%. As enacted by LBJ after Kennedy’s assassination, the top tax rate was reduced to 70% and the lowest to 15%. These rate cuts came quickly, unlike Reagan’s – which were was unwisely postponed until 1983-84.