A few years ago, economist Bruce Bartlett wrote an article that commented on the Republican Party's historical stance on tax cuts. Bartlett states the following:
upon a time Republicans thought that budget deficits were bad, that it
was immoral to live for the present and pass the debt onto our children.
Until the 1970s they were consistent in opposing both expansions of
spending and tax cuts that were not financed with tax increases or
spending cuts. Republicans also thought that deficits had a cost over
and above the spending that they financed and that it was possible for
this cost to be so high that tax increases were justified if spending
could not be cut. Dwight Eisenhower kept in place the high Korean War
tax rates throughout his presidency, which is partly why the national
debt fell from 74.3% of gross domestic product to 56% on his watch. Most
Republicans in the House of Representatives voted against the Kennedy
tax cut in 1963."
What I have been reading in Stephen Ambrose's Nixon: The Education of a Politician
is that the conservative Republican Old Guard was critical of "high
income and corporate taxes" and "deficit financing" (page 142). That
may coincide with what Bartlett is saying: that Republicans were all for
tax cuts, but they also sought to avoid deficits, and so they wanted
for tax cuts to be paid for with reductions in government spending. But Bartlett also says that Republicans back then were
open to tax increases and opposed tax cuts when they felt that they
would exasperate the deficit.
Dwight Eisenhower and his Vice-President, Richard Nixon, there was some
difference of opinion between the two on tax cuts. Dwight Eisenhower
was accused of giving the defense budget short shrift so that taxes
could be cut and the budget could be balanced. But Nixon, as Ambrose
narrates, believed that the defense budget could be increased even as
taxes were cut. Eisenhower did push successfully for a tax cut, but
later he tended to prioritize a balanced budget over reducing taxes.
And yet, there was a recession during part of Eisenhower's time as
President, and Nixon thought that tax cuts were important when the
economy was slow, for they could free up money for investment.
According to Ambrose, Nixon also held that taxes that were too high
could negatively impact revenue. Nixon was preaching supply-side,
before supply-side became known as supply-side! And Eisenhower was
concerned that Nixon, after succeeding him as President, would pursue a
policy of cutting taxes while increasing defense spending.
According to Irwin Gellman in The Contender: Richard Nixon, The Congress Years, 1946-1952,
however, the earlier Nixon was a penny-pincher (or tried to be). (Gellman does not call Nixon a penny-pincher, but I'm drawing that conclusion based on facts that Gellman presents.) While Nixon voted for a
generous Republican tax cut when he was a congressman, he actually
wanted for the tax cut to be smaller so that the defense budget could be
adequate (page 150). And, as Senator, Nixon thought that, once the
Korean War were to end, the U.S. should maintain a powerful military to
keep the peace, and thus the government should cut its domestic budget
(page 321). Perhaps Nixon as Vice-President likewise favored government
spending cuts to pay for the tax reductions and increased defense
spending----I don't know. But Eisenhower was concerned that the math
would not add up were Nixon to succeed him as President.
Good work, SBC!
1 hour ago