These comments, while few in number, encapsulate so many fallacies about taxes and economic growth that it's hard to know where to begin. Let's start with the comment that "we've got the lowest tax rates we've had since the 1950s."
We're not sure what he means by that. If he means taxes as a share of GDP, in 2010 it was about 15%. But during the 2000s, it's more like 17.6% — close to the long-term average of 18.5%.
Taxes as a share of GDP are low right now for one reason only: The economy has been decimated after the financial crisis and nearly three years of Obamanomics.
If Obama is talking about marginal tax rates, which economists believe are most important, then he's simply wrong. Marginal tax rates in the 1950s were much higher than they are today. For those at the top of the income distribution, the marginal rate for most of the 1950s was a deadening 91%. Today, it's about 40%.
Maybe that's why we had four recessions from 1949 through 1961. History is clear: The booms of the '60s, '80s, '90s and mid-2000s were all built on cuts in marginal rates. Obama's comments simply ignore history.
Then there's Obama's comment about the 1920s. Doesn't he know that the 1920s were one of the greatest decades for the U.S. economy in our history — a decade that began with massive cuts in spending, something Obama has refused to consider?
U.S. Treasury Secretary Andrew Mellon engineered major tax cuts in 1921, 1924 and 1926, slashing rates on the highest incomes from 73% in 1921 to 25% by 1929. It didn't "cost" the government a penny of revenue; in fact, the wealthiest Americans' share of total taxes rose from about a third to two-thirds over that time.