Full Business Expensing: JFK's Plan and Ours (Seventh in a Series)

Arcane rules create an enormous drag on the economy, jobs and wage growth.

by Rod D. Martin
September 5, 2004

During the fight for President Bush's 2001 tax cuts, supporters regularly quoted from another tax cutter, President John F. Kennedy. And as with JFK's proposals, Bush's passed the Congress and dramatically expanded our economy.

There was, however, at least one difference between the Bush tax cut plan and JFK's. Kennedy's plan allowed businesses to depreciate their assets 32% faster than before; and he also instituted a 7% credit against tax liabilities for new investments in machinery and equipment.

Translation: JFK made it possible for businesses to grow faster, so they were able to hire more people who, in turn, made more money.

In my continuing series on the need to repeal our current tax system and replace it with a flat tax, I've identified five key reforms to help us break away from our deeply flawed tax system.

Replacing our system of depreciating assets is clearly one of them.

But just as there was a difference between President Bush's 2001 tax cuts…