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March 8, 2008
Tax Cuts, Not the Clinton Tax Hike, Produced the 1990s Boom
J.D. Foster (The Heritage Foundation) has posted Tax Cuts, Not the Clinton Tax Hike, Produced the 1990s Boom on The Heritage Foundation web site. Here is the Conclusion:
Proponents of tax increases often reference the Clinton 1993 tax increase and the subsequent period of economic growth as evidence that deficit reduction through tax hikes is a pro-growth policy. What these proponents ignore, however, is that the tax increases occurred at a time when the economy was recovering from recession and strong growth was to be expected. They also ignore that the real acceleration in the economy began in 1997, when economic growth should have cooled. This acceleration in growth coincided with a powerful pro-growth tax cut.
The evidence is persuasive that the tax increase probably slowed the economy compared to the growth it would have achieved and that the subsequent tax cuts of 1997, not the tax increases, were the source of the acceleration in real growth in the latter half of the decade. As taxes are now above their historical average as a share of the economy, and are rising, Congress should look to enact additional tax relief to keep the economy strong.
March 8, 2008 in Think Tank Reports | Permalink
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Comments
Well, if someone from the Heritage Foundation has something bad to say about Clinton, it must be true.
Posted by: S.cotus | Mar 8, 2008 4:06:20 PM
I absolutely agree. In fact, I think we should lure Osama Bin Liden by offering him a tax cut.
Posted by: R. Mombrun | Mar 8, 2008 4:15:01 PM
He must have been drinking a case of Coors when he wrote this rightwing Heritage crap?Groups like these wingnutz are the reason that the US is in trouble,with donors like this... Scaife,Coors,Mobil,Dow Chemical and Amway its no wonder they are for war,war ,war... but they sure don't want to pay for them!And what does he have to say about the big GW tax cuts that have led to such "great" economic times?Don't forget that beside the tax cuts we have Plunge Protection Teams,rate cuts,liquidity and Helicopter Ben dropping money like water,but still no rightwing economic miracle!
Posted by: urlnts | Mar 8, 2008 6:26:17 PM
If tax increases spur economic growth why doesn't the government institute a 100% mariginal tax rate and we will all be prosperous.
Posted by: corey smith | Mar 8, 2008 6:43:51 PM
Is there any time that isn't the right time for a tax cut? Not according to the Heritage boys.
Posted by: Jack Acid | Mar 8, 2008 7:13:05 PM
I would say Russia massively entering world oil markets thus depressing energy prices as well as us dumping more and more of our industry onto China ( less $ on wages but more cheap imported crap in it's stead)had more to do with the boom than any tax cuts.
Posted by: Al | Mar 8, 2008 8:03:12 PM
Well, people forget, I suppose, but there were significant tax INCREASES starting every year of the Reagan administration after its first year tax cut (7 significant tax increases '82-'88), and then Bush I's large tax increase, and then Clinton's large tax increase, leading into the '90s.
Somehow, not only were the Clinton years not economic disasters, but the economy was as good or better in terms of average real growth, job growth numbers, decreased unemployment, etc., as it had ever been, going back to the halcyon days of the '60s economic growth boom.
To ignore the NINE significant tax increases prior to the '90s boom time, and claim that a relatively late and small tax cut in '97 (taking effect in '98?) was THE reason the '90s were a good economic time, is simply laughable propaganda, as one might expect from a Heritage Foundation partisan.
Posted by: sofla | Mar 10, 2008 10:34:26 AM
