Tuesday, April 19, 2011

Raising taxes on the rich will not harm the recovery

We've actually done this experiment once before back in the 90's. The Republicans screamed bloody murder. They were wrong then, and they are wrong now.

The universal claim of Republicans in 1993 was that if the Clinton budget and its tax hikes on the wealthy ever became law, the country would immediately be plunged into another recession and millions of Americans would lose their jobs. That didn't happen at all. Moreover, when the economy began growing rapidly in the middle and late years of the decade, the new, higher rates established by the Clinton budget helped produce a massive revenue windfall -- enough to lead to record surpluses and to bring into sight the elinination of the entire national debt. You don't need to claim that Clinton's '93 budget itself spurred the economy or that it was the only reason a balanced budget was reached so quickly (yes -- there were other factors!) to acknowledge that (a) it did not cause any of the economic turmoil that Republicans guaranteed Americans it would and it did not hinder -- at all -- the sustained growth that marked the rest of the decade; and (b) it brought in far more revenue than the pre-Clinton budget tax rates would have -- and this revenue made achieving a balanced budget much easier.

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