Economic Freedom Fighters, Unite
By Lawrence Kudlow
October 29, 2009
Page 2 of 2
So why not try something different? Unfashionable as it may be today, why not go back to the supply-side model of lower marginal tax rates for individuals and businesses, large and small? That's the model my late dear friend Jack Kemp successfully espoused to President Reagan more than 30 year ago. It's the incentive model of economic growth. At lower tax rates, where folks keep more of what they earn and invest, greater after-tax rewards spur greater work effort and investment risk. They also boost asset values. This is exactly what the economy needs: a rejuvenated dose of incentives -- permanent incentives.
Think of this: At the same wage level from cost-conscious businesses, a 10 percent personal tax cut provides a handsome after-tax wage-increase incentive that will spur individuals to go back to work -- simply because work will pay more after-tax.
When I spoke last week at the launch of the Jack Kemp Foundation in Washington, D.C., I emphasized the supply-side model of a sound dollar, flat tax rates, free trade, limited government and market-driven solutions for better schooling, more efficient health care and the amelioration of poverty.
Jack Kemp believed in these principles. He believed in growing the economic pie, not redistributing it. And he believed in growing it large. He would have hated today's notion of a "new normal" of 2 percent growth and high unemployment. He would have argued for the need to give everyone greater economic-empowerment opportunities and incentives. And he would be just as right today as he was when he began his crusade in the mid-1970s.
Kemp's universal principles have stood the test of time. His was a genuine growth solution, one that is essential to America's greatness, her boundless optimism, her prosperity and her success. Today's anti-growth economic policies would have driven him crazy. And he would have fought back.
That's the message for economic freedom fighters everywhere: Unite, and throw off your chains. Especially here in America.
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