Former Congressman Jack Kemp passed away over the weekend. Kemp will be remembered for many things, but among them is his tireless advocacy for reducing tax rates while in Congress from 1971 to 1989.
At the time, the top marginal rate was 70%, and Kemp argued that lowering that rate would produce more growth in the economy. The “Kemp-Roth taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. cut”-dropping rates by a third-was enacted as part of Ronald Reagan’s 1981 budget. (The budget also began adjusting the tax bracketsA tax bracket is the range of incomes taxed at given rates, which typically differ depending on filing status. In a progressive individual or corporate income tax system, rates rise as income increases. There are seven federal individual income tax brackets; the federal corporate income tax system is flat. for inflation, another Kemp proposal.)
The legacy of those tax cuts is still debated, for sure, although no one seriously talks about 70% marginal rates anymore. One Kemp idea that he saw enacted was the creation of “enterprise zones,” essentially a reduction in taxes and regulations in a certain area to stimulate growth and investment. Their success demonstrates that taxes and tax policy matter.
After the Republican takeover of Congress in 1994, Kemp was appointed to a commission to study tax reform. He pushed for a flat tax, and idea that became a major issue in the 1996 campaign (where Kemp ended up the Republican vice-presidential nominee).
Rest in peace, Congressman Kemp.
Share this article