Was the New York Times Book Review ever mighty? If so, it certainly has fallen. Book reviews at the nation’s paper of record are supposed to be smart and accurate. They are to be a resource for the informed public as it strives to comprehend the range of issues, in particular those having to do with political economy. With the Book Review’s treatment of Mort Kondracke and Fred Barnes’s new biography of the late and immensely influential U.S. Rep. Jack Kemp the other day, however, responsibilities have gone unfulfilled. We are left to wonder if this Sunday supplement still has a commitment to standards of seriousness and facticity.
The review, by Timothy Noah of Politico, starts off with a grade-school level taunt: “If space aliens were to land a flying saucer on the Capitol’s South Lawn, one question they might ask is: Wherever did you get the idea that cutting taxes would increase revenue?”
That’s mediocre rhetoric, talk of space aliens. Let it not distract us from the underlying ignorance. The review implies that Kemp was one of the progenitors of the tax-cut-increased-revenue idea. It was the “premise of supply-side economics as practiced by Jack Kemp,” Noah writes, Kemp being, if you could possibly tell from the review, among the most important Congressmen of the 20th century. Kemp ushered in the economic component of the Reagan Revolution on Capitol Hill in the 1970s and 1980s.
Cutting taxes can increase revenue—where did this idea arise in American history, the space aliens ask? Among a clique in the 1970s?
A knowledgeable conversation partner would clue in the cosmic visitors that this was the single most dominant strain in Congressional argument over taxes and their economic effect throughout the 19th century. The Democratic Party was founded, in the 1820s, to coalesce political forces that held that tax cuts can increase governmental receipts. Indeed, this distinction was embedded in the language of taxation of the time. A tariff—a list of taxes on selected imported goods, and the only form of taxation in this country for 44 years after 1817—was specifically “prohibitive” if lowering the rate would bring in more revenue.
Each of the interminable debates on the tariff in the 19th century included, as a matter of course, discussions of whether or not a particular tariff duty was prohibitive. If a rate were so high that cutting it would encourage imports such that revenue would be higher under the lower rate, that high rate was prohibitive. Any rate below the first prohibitive rate went by the name of a “revenue” rate. There were two kinds of tariff rates in 19th-century political discourse: “prohibitive” and “revenue” rates.
Ultimately, the space aliens would have to settle on April 1789, when moments into the very first Congress, debates got high about jeopardizing revenue in favor of protecting certain home industries from foreign competition via upped tax rates. Present at the creation, space aliens.
Then our far-off friends would pick up the following about the era of the income tax. In the 1920s, Treasury secretary Andrew Mellon repeated what his predecessors in the Woodrow Wilson administration had said about high tax rates being “not paid.” In 1959, the House Ways & Means Committee’s Tax Revision Compendium went on about how cuts in the highest rates of the income tax would increase effective tax rates by dozens of points. And in 1962, in a line that has been quoted innumerable times (so the space aliens would have already heard it without having to ask anyone), President John F. Kennedy said that “it is a paradoxical truth that 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.”