The Jack Kemp Legacy
Jack Kemp is dead, as you’ve probably read elsewhere. The most interesting part of Kemp’s legacy was his failed effort to get the Republican Party to make a serious effor to court African-American voters. To be the Party of Lincoln rather than the Part of Nixon. In retrospect, this looks quixotic. But to understand its appeal, recall that through the 1920s African-American voters strongly supported the GOP. This is sometimes glossed as a merely historic loyalty to the party of emancipation. But in fact civil rights issues were on the agenda during that period. It was under Woodrow Wilson that rights for America’s black citizens reached their nadir, and Warren Harding made an active, though ultimately failed, effort to secure an anti-lynching bill. The New Deal brought northern blacks into the Democratic Party coalition, and southern blacks generally couldn’t vote.
But in the 1950s, Dwight Eisenhower made meaningful efforts to court black voters and the distribution of black votes in 1952 and 1956 was not nearly as lopsided as it is today. Nixon and Kennedy, like Ike and Stevenson before them, both made efforts to simultaneously court southern whites and northrn blacks. And when Lyndon Johnson pushed the Civil Rights Act through congress, there were more “no” votes from Democratic members of congress than from Republicans. But by the time of Kemp’s prominence, the conservative movement had settled on a strategy of realigning conservative whites and indifference to the concerns of African-Americans, so Kemp’s ideas went nowhere.
On tax cuts, however, Kemp’s ideas went very far.
And looking back on the Reagan Era, during which Kemp had the most influence, it’s worth distinguishing between three different claims:
ONE: Extremely high marginal income tax rates are economically destruction because they encourage tons of tax-avoiding behavior.
TWO: The path to prosperity is an equilibrium of low taxes and low levels of government spending.
THREE: Tax cuts do so much to boost growth that they pay for themselves.
Of these three claims—all of which Kemp was associated with—the first is true, the second false, and the third ridiculous. And while they all kind of ran together to some extent in the context of the late-1970s, it’s worth noting that there’s actually considerable tension between these ideas. The first idea really does imply that something like a 70 percent top marginal tax rate should not be thought of as a sound scheme for generating revenues. On the other hand, it also does imply that raising taxes on the wealthy by curbing their deductions could raise significant revenues at little-to-no economic cost. But if you believe in (2) — that policymakers should be trying to make revenue as low as possible — then you’ll be unmoved by these considerations.
And if you believe in (3), which is nuts, then you’ll get what post-Kemp conservative rule has, in practice, brought us—namely large structural budget deficits.
27 Responses to “The Jack Kemp Legacy”
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May 3rd, 2009 at 3:33 pm
For all his flaws, it is possible to imagine Jack Kemp governing the nation and not leaving it completely screwed up. Unlike any Republican currently prominent in Washington.
May 3rd, 2009 at 4:11 pm
Yeah, we all know that 3 is wrong. The only thing that pays for itself is spending.
May 3rd, 2009 at 4:12 pm
Ultimately, I think Kemp is what we might call a genuine conservative – i.e. someone for whom that is a political philosophy rather than someone for whom it is a near-religious ideology. You can have a discussion, even a disagreement with someone like that, and they won’t conclude that because you disagree with them you hate America, Baby Jesus, and apple pie. Like Robert says above, such a conservative can govern reasonably effectively.
May 3rd, 2009 at 4:41 pm
I think your quick dismissal of #2 is very much unjustified. It is very a reasonable matter of debate whether it is economically optimal to settle on an equilibrium of low taxes and low spending. I personally think it is very much the case.
To so quickly and unjustifiably dismiss it so is arrogance.
May 3rd, 2009 at 5:04 pm
Myles, it depends on how you define prosperity. If you define it simply as GNP, then (2) might make sense. But there’s no compelling reason to accept the size of the pie as the sole criterion for prosperity.
A chance at a good life for the largest possible number of people, would be my definition of general prosperity. And though rewarding risk and hard work with wealth is a major part of such a vision, government plays an important role as well, e.g., in mitigating accidents of fortune for children too young to be expected to have already pulled themselves up by their bootstraps.
May 3rd, 2009 at 5:11 pm
Well, if we re being honest, at high marginal rates, the Laffer curve and what supply siders say is correct. It’s not true when the marginal rate is the 30s.
I do think however that Kemp’s contribution is overrated. The person who forged the current Republican orthodoxy was Reagan’s budget director David Stockman.
May 3rd, 2009 at 5:44 pm
A 70% marginal rate is indeed counter-productive. But hardly anybody paid taxes at the 70% rate. Earned income was taxed at a maximum rate of 50%. Capital gains were taxed at a maximum rate of 35%. But even those rates seem ridiculously high today. Capital gains and dividends, the character of income realized by most high income earners, today are taxed at maximum rates of 15%. And for the high income taxpayers, even the maximum marginal rates top out at about 36%. On the other hand, for the poor fellow who is paid a salary of about $100,000, he/she pays at marginal rates of about 50%. That’s right, the middle income folks today pay at much higher marginal rates than the high income earners that Jack was so concerned about back in the 1970s.
May 3rd, 2009 at 6:25 pm
Actually you’ll find that Clinton’s whopping 30% cap gains tax cut in 1997 produced extra revenue coincident with surpluses. OTOH the Clinton income tax rates didn’t prevent the 2000-1 recession.
Certainly in the short term hiking rates will get you an increase in revenue. At least until people adjust. After that it’s a matter of business growth. Assuming there is any, and not a shrinkage instead.
Therein is the problem with an anti-business bias. Capitalism is the source of all the things you desire, like jobs and taxes. Yet you hate accepting the realities business must deal with, like the Chrysler bankruptcy. Fantasyland is much nicer, no?
Meanwhile, you point a finger at conservative deficits while applauding even larger liberal ones? Obviously you don’t care about deficit spending, just what it’s financing. Tsk.
Oh, I’d love to hear the rationale behind this statement. Do you think people don’t sense changes in effective tax rates?
Not to mention all the damage done to the building and non-profit industries. Other than business expenses, those are the only deductions left to high income earners. Get out of the closet and declare for an AMT on everyone making more than $100,000. You’ll feel better.
May 3rd, 2009 at 6:34 pm
The ironic thing about Matt’s dismissal of two and three is that he consistently supports raising the rates on the sorts of taxes which come closest to paying for themselves when cut, and favors lower rates on taxes which pay for themselves least. This is the problem with all of the “fact based liberals” who so disdain ideology. Behind the curtain of each fact based argument lies a near religious ideology which can only be seen by stringing together a few posts.
May 3rd, 2009 at 6:40 pm
raylward,
The charitable description of this is “disingenuous”. Be a good boy and fill in the blanks you left empty, in order to provoke an undeserved emotional response.
Indeed, why do you think some people prefer this method of compensation? There will always be a way to move money around to avoid the more egregious lefty tollbooths. And yet for all that, the rich pay their piece of the pie in taxes and part of yours too.
May 3rd, 2009 at 6:48 pm
If Grant ( an underrated President) had been able to have his Reconstruction policies survive him for a two or three decades, the Civil Rights Acts and Voting Acts after WWII likely would not have been needed, and Nixon would have never courted the support of the segregationists. Of course, it was Grant’s failings as a President which in part doomed his Reconstruction policies.
May 3rd, 2009 at 7:15 pm
Structural deficits are now a bi-partisan effort. Obama not only has no plan to lower the deficit; his plans will result in debt levels that make the Bush deficits look small – which is a pretty hard thing to do…
May 3rd, 2009 at 7:16 pm
[...] left also shared their thoughts. Both Matt Y. and Digby focus on his views of race relations, while discounting his views on economics and taxes. [...]
May 3rd, 2009 at 9:00 pm
I didn’t realize the term “structural deficits” – and what the term “structural” adds to the word “deficits” – was so widely misunderstood on the right, until I read this thread.
Actually you’ll find that Clinton’s whopping 30% cap gains tax cut in 1997 produced extra revenue coincident with surpluses.
Really? You’re going to make this argument and hope that nobody remembers the tech stock bubble? Really?
May 3rd, 2009 at 9:23 pm
One has to love how progressives stop talking about Republicans and race in 1964. The progressives have to work very hard to ignore all of the race based social engineering that Democrats support in the 1970’s. In 1979, Democrats were in front of the Supreme Court arguing that separate and unequal admission policies for whites and blacks to universities, graduate schools, and even for government hiring were legal and good government policy. Progressives have to work very hard to not understand why conservative do not appeal to a group (blacks) that demand government sponsored racial discrimination.
May 3rd, 2009 at 9:35 pm
Um, WHAT?
Lemme see here, Southern Strategy, Philadelphia MS, strong young bucks buying steaks and gin, welfare queens, Jesse Helms, Lee Atwater, Willie Horton, quota queen, Real Americans, birth certificate, welfare class, he carved a B on my face, Inauguration riots…
There is literally no connection what a conservative writes on Monday, what he says on a Tuesday, and the truth. Superdestroyer, you’ve spent the last year obsessively accusing progressives of “playing the race card” and of selecting an “affirmative action president,” and now you can’t keep your own story straight?
W. T. F? One has to love how progressives stop talking about Republicans and race in 1964. You’re not even trying!
May 3rd, 2009 at 10:10 pm
in the south, the republicans were better on civil rights well past the 1920s. it was eisenhower political workers such as elbert tuttle, john brown, and minor wisdom and others who stood bravely and put the law behind what was right. that the republicans became the dixiecrats so swiftly and for so long is to their lasting shame.
May 3rd, 2009 at 11:38 pm
This may not seem important. But i think that Kemp had much more in common with Thatcher and her supporters in the UK , than Newt Gingrich and his merry bunch , here in the USA.
First of all Kemp supported many of Thatcher’s ideas. He supported the selling of public housing to the tenants, and the creating of “enterprise zones” that were later renamed ” empowerment zones ” by Clinton.You can argue all day about the value of these ideas . But the fact is that while many people credited him with these ideas, he basicly got them from Thatcher.
That is not to call him unorigianal. I am simply saying that the roots of his thinking were in the free market philosophy of Milton Friedman or Margaret Thatcher , rather than the “Culture Wars” philosophy of Tom DeLay.
Jack Kemp was an ideologe, but not a partisan.Tom DeLay was the opposite.Tom DeLay and his bunch cared little for conservative philosophy, or small government. He and his kind wanted power and money.The “K Street Project ” had nothing to do with free market economics.
You do not have to agree with Kemp’s economic theories to be a little sad that there are not more Republican politicians like him still around.
He honestly thought that his brand of conservatism would be good for all Americans ,black or white.Many “conservatives” nowdays do not even bother to pay lip service to this idea.
They do not talk, as Kemp did, aabout reforming regulations and zoning to help black and hispanic entrepreneurs start businesses, and create jobs in their communities.
If republicans started doing this again, and talked about how free market economics could help black people and black communities, they might get votes from black people.They would also regain the respect of white people like myself.
Instead they choose Micheal Steele to be their public face and have him talk in outdated urban slang.I don’t know whether to laugh or to cry.
Jack Kemp was not perfect, and i disagreed with many of the details of his positions.But he was a decent man ,who I think had the basic right ideas.I realise that many liberals on this blog do not agree with his economic ideas.But you can not deny his decency.
Rest in peace Jack Kemp.
May 4th, 2009 at 12:17 am
I worked for public housing during the time Kemp was secretary. We liked him and felt he made an effort and really cared about those who were less fortunate and about minorities. I developed a respect for the man and do mourn his passing because he was the last of the normal conservatives and republicans.
During the time he was secretary, republicans were far different from the rabid, screeching, insane and childish people that have taken over. The angry and hate filled far rightwing.
Kemp and others did not demonize the opposition and name call and rant over made up things.
You could agree to disagree and you could debate and deal with republicans back then.
It’s really sad to see this man pass away and to see his party not listen to him and instead end up as the fringe group it is today.
May 4th, 2009 at 7:45 am
It’s worth remembering that Stockman eventually came to the conclusion that his ideology had a serious problem – not that it was wrong or that it wouldn’t work but that the American people didn’t actually want it. His book is a pretty thrilling account of what happens when ideological libertarianism goes up against reality.
May 4th, 2009 at 8:36 am
Hypothetical tax regime
Tax base: %100, Tax rate: 10%, Revenue: $10
After a 10% tax cut, the rate would be 9%.
To receive the original revenue, the base must grow by 11.11%
We’ve had tax cuts of 10% before and we’ve never had 11.11% growth.
Result: deficits
May 4th, 2009 at 8:38 am
The 1st “%” should be a dollar sign in the post at 8:36 am.
May 4th, 2009 at 8:43 am
I wouldn’t be so sure about #1.
http://www.economist.com/debate/days/view/293
May 4th, 2009 at 9:06 am
Don’t forget a Kemp favorite -
FOUR: A rising tide lifts all boats.
Not true either in our era of low taxes for the wealthiest and lagging wages.
May 4th, 2009 at 1:49 pm
I think that item 2 is up for debate. But in order to decide it’s validity, we’d have to decide what priorities our Federal government should pursue and whether or not it would be more beneficial to our nation to have a larger government at the expense of less resources available to the private sector.
I think conservatives would do well to have this debate and focus their debate more on creating ’smart’ government (that is, government that focuses on a set number of priorities and keeps its budgets as low as possible but still enough to accomplish those tasks) rather than ’smaller’ government.
Of course, after the last eight years, it is entirely possible that trying to convince the American people that Republicans are capable of creating “Smart” government would be like a lion trying to convince a gnu that he’s seen the light and given up meat for a vegan diet.
FOUR: A rising tide lifts all boats.
This could be true or false depending upon how you measure improvement. With regard to strictly viewing wages, this is false. But if you factor in other things, such as improved access to technology, this can be true.
May 4th, 2009 at 1:57 pm
I’d like to hear Matt’s opinion on the corporate income tax. I’d think a progressive case could be made for no taxation of corporate income and no special treatment of inflation adjusted capital gains. Deductions could be allowed only for costs incurred in earning income. Promotion of “worthy” uses of income (charity, and home mortgages) should be by means of partial tax credit. Why should we prefer a $1 charity donation from a 35% braket individual than from a 0% bracket individual?
May 4th, 2009 at 2:37 pm
I don’t. I mourn his passing.