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By Jeff Jacoby, Globe Columnist
Copyright 2001, The Boston Globe

January 20, 2002

In a demonstration that the more things change, the more they remain the same, Senator Ted Kennedy called last week for expanding the public sector at the expense of the private one. His speech at the National Press Club in Washington drew a lot of media attention -- more of a testament to Kennedy's celebrity than to his actual remarks. Really, how newsworthy is it when the nation's best-known tax-and-spend liberal calls for more taxing and spending?

To give the devil his due, Kennedy is unabashed about saying what many other liberals only think, and uninhibited by a fear of being controversial. By my lights he is wrong on almost every issue, but I give him credit for forthrightness: He is less concerned with the public's view of him than with his own view of the issues. And his own view of the issues these days, like most days, is that the federal government should be raising taxes. That way Americans will have less money to spend and the government will have more.

Earlier this month, Senate Majority Leader Tom Daschle blasted the big 2001 tax cut law -- most of which won't even take effect for another three or four years -- for wiping out the federal budget surplus and bringing on a recession. But he declined to take the logical next step and call for repealing or stalling any part of the law.

Not Kennedy. "We cannot now afford -- if we ever could -- the . . . cost of the tax cuts enacted last year," he said. And so he proposes to "put on hold" at least $350 billion worth of relief for affluent taxpayers by raising the rates that the new law lowered and by bringing the death tax back to life. For anyone who might fear the effect of legislating a tax hike of more than a third of a trillion dollars during a recession, Kennedy had soothing words: "Taking fiscally responsible action now," he promised, "will actually help the economy . . ."

This is on the order of advising an anemic patient to donate a couple pints of blood, all the while assuring him that taking "medically responsible action now" will actually be good for his health. A physician who recommended such a course of treatment would be charged with malpractice. But Dr. Kennedy just keeps prescribing the same old snake oil.

Fortunately most Americans know better than to swallow it. In a new CNN poll, respondents agree by a 2-1 ratio that the tax cuts are good for the country. Fewer than 1 in 10 buy the claim that tax cuts have unbalanced the budget. The math is on their side, not Kennedy's. Federal spending is up $120 billion this year, triple the amount by which the new tax cut reduced revenues. That is where the surplus went.

Most senators know better than to swallow a tax hike, too. In a speech of his own, Georgia Democrat Zell Miller snorted at the the notion that the tax cut caused the recession. "Ladies and gentlemen," he said in Atlanta last week, "this economic slowdown had begun before we passed the tax cut -- and most of it hasn't even gone into effect." Even hinting at a tax hike, he added, "is about the worst move we could make."

Miller is a loyal Democrat, but as John F. Kennedy once remarked, sometimes party loyalty asks too much. No matter what Daschle or Kennedy may believe, Miller knows that the only thing wrong with the 2001 tax cuts is that they phase in far too slowly.

And JFK would have known it, too.

"The . . . best means of strengthening demand among consumers and business is to reduce the burden on private income and the deterrents to private initiative which are imposed by our present tax system," President Kennedy declared in December 1962. He called for "an across-the-board, top-to-bottom cut in personal and corporate income taxes," and for the most straightforward and sensible of supply-side reasons:

"Our present tax system . . . exerts too heavy a drag on growth" and "siphons out of the private economy too large a share of personal and business purchasing power." Worst of all, "it reduces the financial incentives for personal effort, investment, and risk-taking."

The tax cut JFK favored was massive compared with the one Congress passed last year. He wanted to let the highest income earners keep an additional 21 cents on every marginal dollar earned; the Bush tax cut will (gradually) let them keep only another nickel.

But even a nickel is too much for Ted Kennedy, who cannot sleep at night for fear that the wealthy are not being taxed heavily enough. (The richest 1 percent of taxpayers, who earn about 19.5 percent of the nation's income, pay more than 36 percent of federal income taxes.) His brother, to his lasting credit, was more interested in strengthening the nation's economic health than in waging class warfare.

JFK's tax cuts were passed in 1964, and the economy boomed -- just as it boomed after the Coolidge tax cuts in the 1920s and as it would boom after the Reagan cuts in the 1980s. The lesson of history -- that the economy flourishes when taxpayers are allowed to keep more of their earnings -- couldn't be clearer. Too bad Ted Kennedy isn't willing to learn. Too bad his brother isn't here to instruct him.

Jeff Jacoby is a columnist for The Boston Globe
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