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Why Tax Cuts Help Economies

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  • Description

    FBN’s Gerri Willis on why tax cuts help boost economic growth.

  • Duration 2:26
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The two big parties in Washington have often been defined by their main economic principles.

Democrats want to spend more and tax -- the Republicans want to tax less and spend less.

This debate has been ratcheted up first with the fight over extending the bush tax cuts and and now with the debt ceiling.

But as with most things in Washington -- solution to the problem can be found in history.

While the impact of the bush tax cuts are still being written the result of reaganomics is clear.

In 1981 President Reagan issued a major tax cut slashing income tax rates by 25% across the board.

That dropped the highest marginal tax rate to 50%.

He later dropped -- 28% before leaving office.

Now the economy was deep -- recession before these cuts came to be.

After the GDP skyrocketed to nearly 5% how we would loved to have those kinds of numbers today.

Although the national debt back -- was only a trillion dollars yap a trillion dollars.

Revenue is always a concern but cutting back the tax rates ended up boosting revenue because productivity was no longer being choked off.

The trickle down effect is easy to point out people were keeping more of their money from Uncle Sam so they were able to spend more of it on their business front fun stuff.

Either way the economy benefited.

And the sixties painted a similar picture.

For those of you who can remember back that far the top tax rate before president Kennedy took office was 1980%.

No kidding.

Even though was too high corporate democratic president who moved swiftly to lower the rates 70%.

All of the changes didn't make their way through congress until after Kennedy was assassinated.

Again tax revenue catapulted more than tripling from nineteen set at sixty to 1968 just eight years there.

Unemployment also a major benefactor of the Kennedy tax cuts falling from an already low five point 8% to under 4%.

And the man that started this all presence Harding and Coolidge broad tax rates been 77%.

To 25% 1925.

Look at these graphs they'll just like the ones from Reagan and Kennedy.

GDP up unemployment down.

As we focus on education in America hopefully this inflow can be used to educate those in Washington who say we have to tax more in this country to boost revenue.

Stop hiding behind the national debt and face reality we have -- spending -- problem in this country not a taxing problem.

Tax cuts have saved economies throughout history this economy needs saving.

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