The Job Creators Network, a group of wealthy CEOs partnering with Former House Speaker Newt Gingrich to lobby for Trump’s deeply regressive tax cuts for the rich, is running a new television ad in three states this week taking President John F. Kennedy’s words out of context to suggest that tax cuts are urgent.
The ad quotes Kennedy’s 1962 remarks at the Economic Club of New York:
…Tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now…. And the reason is that only full employment can balance the budget, and tax reduction can pave the way to that employment. The purpose of cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus.
But the quote leaves out crucial context from both Kennedy’s speech and the time he gave it.
Kennedy delivered the remarks at a time when the top marginal tax rate was a whopping 91 percent—instituted in large part to pay for World War II, a fact Kennedy acknowledges in the same speech.
“Our present tax system, developed as it was, in good part, during World War II to restrain growth, exerts too heavy a drag on growth in peace time; that it siphons out of the private economy too large a share of personal and business purchasing power; that it reduces the financial incentives for personal effort, investment, and risk-taking,” Kennedy said at the time.
Kennedy called for lowering the top rate to 65 percent, and the rate was eventually changed to 70 percent under the Revenue Act of 1964.
In contrast, the current top income tax rate is 39.6 percent — more than 50 points lower than it was in Kennedy’s day. Trump and Congressional Republicans’ tax plan calls for lowering the top tax rate to its modern historical low of 35 percent, eliminating the estate tax for multimillionaire estates, and creating a giant new tax loophole for hedge fund owners, real estate financiers, lobbyists and high-powered lawyers.
The Gingrich ad also ignores a key difference between the 1960s and today. Kennedy’s speech came during an era of historically low inequality. At that point, the richest 1 percent of households held less than 10 percent of the income share in 1962. Since then, the share of income going to the top 1 percent has more than doubled — even has the wealthy pay less in taxes.
The ad is the latest in a string of lies told by the Trump administration and its allies to sell their tax plan. Last week, in the face of all evidence, Trump argued that American truckers would benefit most from corporate tax cuts. Trump economic adviser Gary Cohn went as far as to say that the wealthy are not getting a tax cut, even though studies have found that the richest 1 percent of Americans would get nearly 80 percent of the tax cuts by 2027. And the administration repeatedly promised that the tax plan would not benefit Trump himself, even as the plan creates a giant loophole for businesses like the Trump organization.
A more honest ad would acknowledge that corporate tax cuts almost exclusively help CEOs and the wealthy, 47.2 million more Americans would pay higher taxes under Trump’s plan, and that Republican lawmakers want to pay for these tax cuts by slashing Medicare and Medicaid.
But perhaps the CEOs who fund the Job Creators Network are more interested in lowering their own taxes than providing relief for the middle class. The group producing the ad was founded by billionaire former Home Depot CEO Bernard Marcus, and is funded by a who’s who of big business lobbies.
Jeremy Slevin is the Associate Director of Advocacy at the Center for American Progress Action Fund (CAPAF). ThinkProgress is an editorially independent news site housed at CAPAF.