John Kerry is running for President on a platform of raising marginal tax rates on the rich. Back in 1984, when he was first running for the Senate from Massachusetts, Kerry supported cutting marginal tax rates on the wealthy-and at that time, as today, the federal government faced large budget deficits. In his answer to a candidate survey from the National Taxpayers Union (NTU) in 1984, Kerry promised his "support for Bradley-Gephardt and tax code reform to eliminate profusion of special interest breaks, creating instead lower marginal rates for most taxpayers." His answer came after indicating his opposition to the Balanced Budget-Tax Limitation Constitutional Amendment, an across-the-board spending freeze, and a national sales tax or value-added tax. The Bradley-Gephardt plan would have reduced the top marginal tax rate from 50% to 30% while keeping the tax bite across all income groups roughly the same.
The plan was revenue-neutral, making up revenue lost from lower rates by closing tax loopholes. Free-market economists have long argued that cutting marginal rates, even at the expense of eliminating tax shelters, is the best way to stimulate economic growth. But now, Kerry wants to allow the expiration of those of President Bush's income tax cuts that apply to the top 2% of American earners-those whose investment goes furthest in powering the American economic engine. In 1984, NTU was concerned about the lack of indexing in the Bradley-Gephardt plan but, says NTU Vice President Pete Sepp, "The 30% would still be lower than the marginal rate Kerry seeks on the wealthy now."
Kerry also indicated his opposition to "repealing or limiting income tax indexing" on the NTU form, but Bradley-Gephardt would have repealed indexing. "The lack of indexing was a major factor in making our tax system such a mess," testified David Keating, then-Executive Vice President of NTU, back in '84. "Marginal tax rates steadily rose as inflation put people in higher tax brackets while Congress took many of the revenues and steadily enacted more tax loopholes."
