Fiscal Cliff = Return To Clinton-Era Tax Rates
Democrats have long argued that the Clinton-era tax rates were good for the economy. They conveniently forget about the massive growth in the economy spurred on by the internet boom – a once in a generation event. Some would argue that the 90′s would have been even more prosperous with lower tax rates across the board like the ones put in place by Bush which are the focus of the Fiscal Cliff negotiations.
When Clinton came into office, the economy was still in full bore growth mode because of Reagan’s massive tax cuts during the 80′s. Clinton actually raised taxes in ’93 and that slowed the economy down (albeit not enough to cause much pain because of the dotcom bubble) and it didn’t pick back up until Newt Gingrich forced a capital gains tax cut in ’96. Oh heck, just read this by the great Jim Pethokoukis over at AEI.
Now, these very same Democrats who were lauding Clinton-era tax rates are warning of fiscal disaster if we go over the Fiscal Cliff. My understanding is that Obama even referred to them as “scrooge” rates in a speech today. How so? Well, letting the “Bush Tax Cuts” expire – part of the Fiscal Cliff – will return the tax rates to Clinton-era levels.
How can the very same tax rates that Democrats reminisced about during the DNC and elsewhere cause economic growth during the 90s and be “scrooge” rates today?
More importantly, why am I the one saying this instead of every talking head in the media right now?