In my last blog commemorating the life of the late Jack Kemp, I was remiss in not mentioning perhaps his greatest political/legislative achievement. I am speaking of the Kemp Roth Tax Cut otherwise known as The Economic Recovery Tax Act of 1981. This bill amended the Internal Revenue Code of 1954 and encouraged economic growth through reductions in individual/personal income tax rates, the expensing of depreciable property, incentives for small businesses, and incentives for savings. It also reduced marginal income tax rates in the United States by 25% over three years (the top rate falling from 70% to 50% while the bottom rate dropped from 14% to 11%) and indexed the rates for inflation. However, the indexing was delayed until 1985.
This bill was signed into law by President Reagan, and in my opinion it single - handedly killed the beast of stagflation, when interest rates and unemployment were both in double digits in the late 1970s under the failed Carter Administration. Simply put it was a bill for the little guy, the entrepreneur and small business person, and not just corporations. Prior to that time most tax cuts focused on the corporate tax rate and not personal rates. It was based in part upon the 1961 tax cut bill signed into law by JFK, also a great bill which our liberal friends choose to ignore when any discussion of JFK comes up.
The Kemp Roth tax cuts are estimated to have created 16 million new jobs. Quite an accomplishment especially when you consider that the country had just come out of the Carter economy, the worst economy since the Great Depression.
Well done Jack. May your ideas be embraced by our current Republican leaders who have clearly lost their way.