An Overdue Book
By Thomas Sowell
TownHall.com
If everyone in America had read Stephen Moore's new book, "Who's The Fairest of Them All?", Barack Obama would have lost the election in a landslide.
The point here is not to say, "Where was Stephen
Moore when we needed him?" A more apt question might
be, "Where was the whole economics profession when
we needed them?" Where were the media? For that
matter, where were the Republicans?
Since "Who's The Fairest of Them All?" was published
in October, there was little chance that it would
affect this year's election. But this little gem of
a book exposes, in plain language and with easily
understood facts, the whole house of cards of
assumptions, fallacies and falsehoods which
constitute the liberal vision of the economy.
Yet that vision triumphed on election day, thanks to
misinformation that was artfully presented and
seldom challenged. The title "Who's The Fairest of
Them All?" is an obvious response to liberals' claim
that their policies are aimed at creating "fairness"
by, among other things, making sure that "the rich"
pay their "fair share" of taxes. If you want a brief
but thorough education on that, just read chapter 4,
which by itself is well worth the price of the book.
A couple of graphs on pages 104 and 108 are
enough to annihilate the argument about "tax cuts
for the rich." These graphs show that, under both
Republican President Calvin Coolidge and Democratic
President John F. Kennedy, high-income people paid
more tax revenues into the federal treasury after
tax rates went down than they did before.
There is nothing mysterious about this. At high tax
rates, vast sums of money disappear into tax
shelters at home or is shipped overseas. At lower
tax rates, that money comes out of hiding and goes
into the American economy, creating jobs, rising
output and rising incomes. Under these conditions,
higher tax revenues can be collected by the
government, even though tax rates are lower. Indeed,
high income people not only end up paying more
taxes, but a higher share of all taxes, under these
conditions.
This is not just a theory. It is what hard
evidence shows happened under both Democratic and
Republican administrations, from the days of Calvin
Coolidge to John F. Kennedy to Ronald Reagan and
George W. Bush. That hard evidence is presented in
clear and unmistakable terms in "Who's The Fairest
of Us All?"
Another surprising fact brought out in this book is
that the Democrats and Republicans both took
positions during the Kennedy administration that
were the direct opposite of the positions they take
today. As Stephen Moore points out, "the Republicans
almost universally opposed and the Democrats almost
universally favored" the cuts in tax rates that
President Kennedy proposed.
Such Republican Senate stalwarts as Barry
Goldwater and Bob Dole voted against reducing the
top tax rate from 91% to 70%. Democratic Congressman
Wilbur Mills led the charge for lower tax rates.
Unlike the Republicans today, John F. Kennedy had an
answer when critics tried to portray his tax cut
proposal as just a "tax cut for the rich." President
Kennedy argued that it was a tax cut for the
economy, that changed incentives meant a faster
growing economy and that "A rising tide lifts all
boats."
If Republicans today cannot seem to come up with
their own answer when critics cry out "tax cuts for
the rich," maybe they can just go back and read John
F. Kennedy's answer.
A truly optimistic person might even hope that media
pundits would go back and check out the facts before
arguing as if the only way to reduce the deficit is
to raise tax rates on "the rich."
If they are afraid that they would be stigmatized as
conservatives if they favored cuts in tax rates,
they might take heart from the fact that not only
John F. Kennedy, but even John Maynard Keynes as
well, argued that cutting tax rates could increase
tax revenues and thereby help reduce the deficit.
Because so few people bother to check the facts,
Barack Obama can get away with statements about how
"tax cuts for the rich" have "cost" the government
money that now needs to be recouped. Such statements
not only promote class warfare, to Obama's benefit
on election day, they also distract attention from
his own runaway spending behind unprecedented
trillion dollar deficits.