Jack Kemp is a dyed in the wool Republican...no doubt about it. That's a disclaimer more than anything else. So on we go. Kemp's "letter to Barack" that ran as an op-ed in the April 17, 2008 Wall Street Journal is very well thought out. I'm heartened to see that there is an alternative intelligent voice out there discussing tax policy. Here is the letter.
Dear Barack,
Greetings, it's me again, giving more advice and
taking you up on your thoughtful suggestion to open up a national
discussion and dialogue on race and racial reconciliation in America.
First of all, some historical perspective, not for you senator, but for my other readers.
I believe all great achievements in our nation's
progress toward social, legal and economic justice have been led by a
combination of agitation and idealism. From the Founders in 1776, to
the Civil War waged to save the union and abolish slavery, to the Civil
Rights Movement which began to fully integrate African Americans into
the electoral and economic mainstream, we have wrestled with, debated
and discussed the next steps that are needed toward "a more perfect
Union."
Each great era of progress was led by men and women of
conviction who challenged us to live up to the highest ideals of our
nation, who declared in a very radical way that we are all God's
children. This ideal was not even close to reality until the passage of
the 1964 Civil Rights Act and the 1965 Voting Rights Act, both of which
were aimed at abolishing the last vestiges of the evil practices known
collectively as "Jim Crow."
This month I thought about April 15 not just in terms
of taxes (they're too high and complex), but because of a great
African-American agitator, Jackie Robinson, who broke the color barrier
in baseball on that date and helped lead all professional sports to
higher levels of excellence and performance.
Barack, as we fast-forward to today, I contend we've
successfully integrated the U.S military, the arts and entertainment,
and sports at all levels. The one area of American life that is still
very separate and very, very unequal is our economy. Many people of
color have risen spectacularly against the odds – Oprah Winfrey, Bob
Johnson, Magic Johnson, Whoopi Goldberg and many other professional
athletes, entertainers and businessmen and women of whom we can be
proud. Still, we need to look at all those left behind, all those you
have spoken of who today lack economic opportunity to climb the ladder
of wealth, ownership and asset creation so central to achieving the
American Dream.
As Jesse Jackson said at a Wall Street Project
conference I attended, "Capitalism without capital is nothing but an
ism." Truer words were never spoken. Look at the great fortunes
generated by the Carnegies and Mellons, the Rockefellers, Guggenheims
and others. These were established in an economic climate of sound
money with very low taxes on income, estates and capital gains.
Before you start thinking, "There goes Kemp again,
calling for a kind of laissez-faire approach to capitalism," let me
note that incentives in the tax code to encourage investment have been
championed at one time or another by both political parties – from
Coolidge to Kennedy and from Reagan to Rangel. (Charlie Rangel to a
lesser degree, but my old friend co-sponsored enterprise zones, with
Joe Lieberman and me, that actually zeroed out capital gains taxes and
has called for a cut in corporate income tax rates.)
In my opinion, people of all colors and income levels
don't hate the rich. They want to get rich. They're more interested in
generating wealth than they are in redistributing wealth. They want to
own property, educate their children and build a nest egg that can be
passed on to their heirs. Unfortunately, some aren't able to access the
same ladder of opportunity that is so readily available to the majority.
As I'm fond of saying, you can't get rich on wages,
you have to earn, save, invest, reinvest and pass on to your children
the products of your labors.
Senator, I believe our tax code punishes this process
of upward mobility, especially for people of color, and in some cases
it actually prevents people from escaping poverty. In this respect, I
believe your economic views are short-sighted. You've pledged to raise
income tax rates to 39.5% and lift the cap on payroll taxes, which
would end up raising the top rate on income to 52% or more. You also
want to raise dividend taxes to 39.5% and capital gains to 28%, plus
you want to return to a confiscatory 55% "death tax." Unwittingly, your
plans would prohibit most black Americans, indeed most Americans, from
ever getting rich or even richer. Your economic ideas, sincere as they
are, would weaken the economy, weaken the dollar, and weaken our
chances of reducing poverty and unemployment.
It's my strongly held belief that we should be working
to democratize our free-enterprise, private property-based system. We
can do this by expanding empowerment zones and offering zero capital
gains taxes for those who invest there; by reforming the tax code to
open access to capital; and by providing more school choice in urban
America.
As for the housing sector, we should listen to my
former colleague Bruce Bartlett, who has called for the repeal of this
year's $117 billion tax rebate, and to redirect the money into a
package of measures that would help those homeowners who actually need
assistance to save their homes.
By giving people access to capital and allowing them
to take ownership of assets, entrepreneurship will be encouraged and
the cycle of poverty can begin to be broken. All persons should have
the opportunity to go as high as their merit and determination can
carry them. My favorite quote is from Abraham Lincoln, who said, "I
don't believe in a law to prevent a man from getting rich; it would do
more harm than good. So while we do not propose any war upon capital,
we do wish to allow the humblest man an equal chance to get rich with
everybody else."
Lincoln's definition of entrepreneurial capitalism is
the best I have ever heard. I believe that a bipartisan consensus could
be reached in America on a 21st-century war on poverty that takes the
best of the "center left" and the best of the "center right" on the
reforms necessary to make the American Dream accessible to all our
people. We may have a long way to go, but I remain an optimist about
improving the human condition, expanding our democratic ideals, and
forming a true partnership with private enterprise.
I love what Bobby Kennedy said in Bedford-Stuyvesant
in 1968: "To ignore the potential contribution of private enterprise is
to fight the war on poverty with a single platoon, while great armies
are left to stand aside."
Barack, let's get together with, say: John Bryant of
Operation Hope in Los Angeles; Ambassador Andrew Young of Good Works
International; Bob Woodson of Neighborhood Enterprise Foundation in
Washington, D.C.; Ted Forstmann of Forstmann Little & Company in
New York; Russell Redenbaugh, a U.S. civil rights commissioner in
Philadelphia; and economist Art Laffer. We can discuss how best to
tackle the issue you raised in your March 18 speech, when you
identified the lack of economic opportunity for people of color as one
of our nation's greatest challenges.
Any interest, sir?
