Robert W. Patterson tells those dumb enough to believe anything in the National Review:
To make his tax package sizzle, McCain should add two ingredients that graced the most important tax cut of the 20th century, the Revenue Act of 1948. Enacted 60 years ago today, when an allegedly “do-nothing” Republican Congress overrode President Harry Truman’s veto, the legislation helped usher in the Fabulous Fifties, an era when both the economy and the American family flourished. The 1948 act was not the largest tax cut of the century. But unlike the tax cuts of the Kennedy, Reagan, and Bush eras, the measure nursed near-record levels of industrial growth and economic expansion without sacrificing family size, moving nearly half of all married mothers into the full-time labor market, or reducing the relative earnings of married men. Nor did the good times coincide with the unraveling of the family, another plus that puts the economic performance of the past generation in perspective.
Even though the “Fabulous Fifties” had three recessions, it is true that we had pretty strong growth during this decade as well as the next couple of decades. The average 3.5% real GDP growth per year certainly trumps the 3% average growth rate during the Reagan-Bush41 era. What Patterson fails to tell his readers, however, is that the tax rate cuts lowered the top marginal tax rate to 77 percent. Patterson also fails to tell his readers about the subsequent tax rate increases during the early 1950’s. In fact, there is a lot that Patterson does not tell his readers about tax policy during this period but fortunately Jerry Tempalski of the Treasury Department recently has laid out the various tax law changes and their revenue effects. Tempalski notes that the 1948 tax bill did lower tax rates a bit but he also estimates that there was a reduction in tax revenues equal to 1.87% of GDP – which is not exactly the supply-side spin that Mr. Patterson tried to put forth.
Let’s give Mr. Patterson some credit for reaching way back to find another tax cut for the supply-side crowd to praise. But he is either completely ignorant of a lot of relevent information in his attempt to spin things in favor of supply-side silliness or he decided to downright mislead the readers of the National Review – assuming they are all stupid little children who deserve to be lied to.