President John F. Kennedy believed that Congress needed to lower taxes in order for the economy to expand and generate more jobs. Kennedy was of the view that when people had more money, they spent it, which generated more economic activity and thus tax receipts. Income tax cuts were indeed one of the biggest priorities for his presidency. And even though he pushed for it throughout his short time as president, the first round of his proposed tax breaks was not passed till February 1964, 3 months after his death.
Kennedy’s fiscal policy views proved that he was an avid strategist. Lower tax rates actually lead to increased tax revenues. In 1961, the collective tax revenue was $94 billion. By 1968, it had shot up to $153 billion. And that wasn’t all. Lower tax rates contributed to a reducing unemployment rate, mostly due to increased consumer spending and businesses that were spending the money they saved to hire works and invest.
In 1964, the GDP (Gross Domestic Product) grew at a rate of 5.8%. The following year, it went up to 6.5%, and then 6.6% the year after that. People had increased confidence they would find jobs, and there was a general optimism that the economy would continue to do better.
According to Ira Stoll, editor of JFK, Conservative, President John F. Kennedy wanted to effect tax cuts because doing so would improve incentives to work, save, and invest. He simply understood that people responded to incentives, and planned to continue with a systematic series of future tax cuts throughout his presidency.
Kennedy, unfortunately, didn’t live to see his tax plan executed. We never will know how far these cuts would’ve gone under his presidency. But we know that future presidents, including Ronald Reagan and then George W. Bush, implemented the same policy on tax reforms, and obtained remarkable results. One sure thing Kennedy did while in office was promoting sensible policies that were hard-geared to turn the economy around.