The False Argument That Clinton Raised Taxes On The Rich And The Economy Boomed

With Obama running around calling for increased taxes on those making $200,000 individually, and on families making more than $250,000, there are those, including the President, who are mis-characterizing what actually happened to the economy in the nineteen nineties when Bill Clinton was in office.

It is true that when Clinton took office in 1993, he and the Democrats in Congress raised the top marginal tax rate of the highest income earners from 31% to 39.6%.  And, it is also true that the economy did well despite the higher taxes on the rich.  What people are ignoring are two critical economic events in the 90's that helped offset the deleterious effects of that tax increase: (1) the implementation of the North American Free Trade Agreement (NAFTA) on January 1 of 1994 and (2) the Dot-Com boom; starting in 1995.

NAFTA alone has seen our inter-North American trade triple since 1994.  The Dot-Com boom created more millionaires and businesses than any other time in our nation's history.  So, to paraphrase Mr. Obama on Clinton's success:  "He didn't do that, someone else made it happen!"

One last point.  The so-called budget surpluses that Bill Clinton created came about because of Newt Gingrich's Contract With America; announced during the 1994 election process.  Once the Republicans took over Congress, they worked with Clinton on the passage and implementation of several bills in 1995-1996 that were designed to reduce federal spending.  As a result, the country went into budget surpluses; starting in 1998.  Any Democrats claiming that Bill Clinton's taxes on the rich created a better economy and reduced deficits is just an attempt to re-write history. It should also be pointed out the the economy did better under the Clinton deficit reduction years than any of the Clinton years prior to that.