Coffee House

What George Osborne can learn from the Paul Ryan/JFK tax cut plan

14 October 2012

One of the highlights of the Paul Ryan vs Joe Biden debate last week was Ryan attempting to explain that you can lower tax rates and increase tax revenues. “Not mathematically possible,” snapped back Biden. “Never been done before.” It has, replied Ryan. “Jack Kennedy lowered tax rates and increased growth.” An incredulous Biden said: “Oh, now you’re Jack Kennedy?” The audience laughed, but the joke was on Biden. People like him (and he has plenty counterparts in Britain) think that the only way of squeezing more money out of an economy is to increase the tax rates and cut spending. JFK understood that it’s more complicated: you need growth, and you need lower taxes to encourage growth. Here’s what he had to say:-