Ike’s practical position on taxes
To the editor:
Let’s remember our history. Gen. “Ike” Eisenhower became our 34th president as a member of the Republican Party. His two terms and many years after were some of America’s greatest years. David Marotta in a 2013 Forbes article wrote about Ike and taxes: “Eisenhower deplored high taxes.” But he also quotes Ike as stating, “The fact is there must be balanced budgets before we are again on a safe and sound system in our economy. That means, to my mind, that we cannot afford to reduce taxes, reduce (federal) income, until we have in sight a program of expenditures that shows that the factors of income and of outgo will be balanced. Now that is just to my mind sheer necessity.” Marotta explains Eisenhower’s view: “Whether you have high taxes which confiscate your wealth or you have high inflation which is just a tax on your buying power did not matter to Eisenhower.”
During Eisenhower’s terms, the highest tax bracket was 92 percent. He insisted this was necessary to keep the U.S. economy healthy and stable. He further saw that a high tax rate on corporations was important to give them incentives to re-invest the profits in their companies (expenses and most capital investments are tax deductible).
Under president Clinton, taxes were raised, the economy was very healthy, and we started to pay down the national debt. In 2003, the marginal tax rate was lowered, the economy struggled, and annual deficits averaged about $350 billion. Then came the great recession (2008-10). While paying for two wars and suffering low revenues from a crippled economy, the annual deficit rose to 1.4 trillion (in 2009) but was “down” to $438 billion by 2015.
Right now, by almost any measure, the economy is strong, corporate earnings are near all-time highs, stock markets are at all-time highs, and unemployment is very low. The economy has seen steady growth since 2010. If we ever had the opportunity to work on our national debt, now is the time.
And, just who owns the national debt? There are about 323 million U.S. citizens which means that, right now, a family of four is in debt about $250,000. This is peanuts to the very wealthy. But it represents years of savings to every working family. Regardless which political party you side with, it is short-sighted and irresponsible to give out tax breaks until we first balance our budget. Eisenhower knew we need to invest in our country to keep it great.