Clinton Tax Hikes Slowed Growth

Discussion in 'Politics' started by Stephanie, Sep 8, 2012.

  1. Stephanie
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    Stephanie Diamond Member Supporting Member

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    SNIP'

    By Curtis Dubay
    September 5, 2012

    President Obama argues that President Clinton’s economic record is proof that the current economy would grow if Congress passed the tax hikes he has long proposed. The American public should not fall for this misleading argument.

    The historical record is clear: The economy grew slower than it should have in the years after Clinton’s 1993 tax hike. The strong economic growth that is associated with his presidency occurred only after he agreed with Congress to cut taxes in his second term.

    President Obama’s cursory and errant analysis of recent history has serious implications for policymaking today. If Congress raises taxes based on the faulty notion that tax hikes have no ill effects on economic growth, it will impede the still-struggling recovery and keep millions of Americans on the unemployment rolls far too long.

    Unexceptional Growth

    A favorite liberal argument is to attribute the U.S. economy’s strong performance during the 1990s to President Clinton’s economic policies, chief among which was a huge tax increase.

    Clinton signed his tax hike into law in September 1993, the same year he took office. It included an increase of the top marginal tax rate from 31 percent to 39.6 percent; repeal of the cap on the 2.9 percent Medicare tax, applying it to every dollar of income instead of capping it to levels of income like the Social Security tax; a 4.3 cent increase in the gas tax; an increase in the taxable portion of Social Security benefits; and a hike of the corporate income tax rate from 34 percent to 35 percent, among other tax increases.[1]

    The economic defense of the Clinton tax hikes does not hold up against the historical facts. The economy did exhibit economic growth during the 1990s, but it was well below potential. Moreover, rapid growth did not occur soon after the tax hike—it came much later in the decade, when Congress cut taxes. After the 1993 tax hike, the economy actually slowed to a point below what one would expect, considering the once-in-a-generation favorable economic climate that existed at the time.

    As for the overall economic recovery, it started well before President Clinton took office. In January 1993, the economy was in the 22nd month of expansion following the recession from July 1990 to March 1991.

    In addition to coming into office in the midst of an economic expansion, Clinton also benefited from a very unusual confluence of events that created a remarkably favorable environment for rapid economic growth:

    all of it here
    Clinton Tax Hikes Slowed Growth
     
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  2. Liberal
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    Liberal Libruhl! Libruhl!

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    Yes..

    A hit piece on a Democrat President from the ultra-conservative Heritage Foundation can't be in any way biased.

    :lol:
     
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  3. SniperFire
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    SniperFire Senior Member

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    True, it slowed growth.

    Fortunately, they implemented a nice cut in capital gains taxes to offset it.
     
  4. Stephanie
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    Stephanie Diamond Member Supporting Member

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    anything else?:rolleyes:
     
  5. Toddsterpatriot
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    Toddsterpatriot Gold Member

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    He raised taxes in 1993. The cap gains cut didn't happen until 1997.
     
  6. rightwinger
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    rightwinger Paid Messageboard Poster Gold Supporting Member Supporting Member

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    LOL

    Are you going to explain Trickle Down next?
     
  7. Toddsterpatriot
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    Toddsterpatriot Gold Member

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    Give more money to government, so Obama can trickle it on his contributors.
     
  8. Toro
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    Toro Diamond Member

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    Clinton's tax hikes probably did slow the economy. Tax hikes usually do.

    However, we also had a balanced budget, and the tax hikes contributed to the balanced budget.
     
  9. Sundial
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    Sundial Class Warrior

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    In 1993 the top marginal tax rate went up. Republicans said it would lead to recession and unemployment. Instead GDP went up and unemployment fell - from 7.3% all the way to 4%.

    Of course they can always say unemployment would have fallen even more, and that the economy would have grown even faster. But there's no way to disprove that. What we can say for sure is that it didn't lead to a failing economy or more unemployment, because those things didn't happen.

    In fact Clinton did exactly the right thing. When the economy is growing rapidly, that's exactly the right time to raise taxes.
     
  10. edthecynic
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    edthecynic Censored for Cynicism

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    Which caused the economy to overheat and boom which was followed by the inevitable bust. All GOP tax policy creates a boom and bust economy, and they take credit for the boom and blame everyone else for the inevitable bust. Democratic economic policy creates a slow and steady growth economy.

    Regarding the 1997 cap gains cut, CON$ always credit the GOP congress with the boom and Clinton with the bust.

    Bush cut Cap Gains and we got another boom followed by the inevitable bust and again the CON$ credited Bush with the boom and the Dem Congress with the bust.

    Overheated Boom and Bust economies favor the cash rich who have the cash to buy after the bust. If you are not cash rich then GOP economic policy does not benefit you. When you overheat an economy, as the GOP always does, the boom and bust are inseparable, but CON$ always take credit for the booms and blame others for connected bust.
     

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