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 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. 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 tax cut”-dropping rates by a third-was enacted as part of Ronald Reagan’s 1981 budget. (The budget also began adjusting the tax brackets for inflationInflation is when the general price of goods and services increases across the economy, reducing the purchasing power of a currency and the value of certain assets. The same paycheck covers less goods, services, and bills. It is sometimes referred to as a “hidden tax,” as it leaves taxpayers less well-off due to higher costs and “bracket creep,” while increasing the government’s spending power. , 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 taxAn income tax is referred to as a “flat tax” when all taxable income is subject to the same tax rate, regardless of income level or assets. , 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