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Repeal the Clinton Tax Hike

Even he admits he raised taxes too much

May 15, 2000, Vol. 5, No. 33 • By JAMES CARTER and STEPHEN MOORE
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SEVEN YEARS AGO Bill Clinton and the Democratic Congress passed what New York senator Pat Moynihan aptly described as "the largest tax increase in the history of the world." It passed by just a single vote in the House and a single vote in the Senate. To their credit, no Republicans in Congress voted for the Clinton tax millstone. Even Bill Clinton confessed two years later that "I think I raised your taxes too much." (You see, he really can tell the truth.)

The purpose of the tax hike back in 1993 was to eliminate the budget deficit. Economists will argue ad nauseam about how much those new taxes actually contributed to the balanced budget we finally achieved in 1998. For the record, our assessment is: not that much. The deficit was projected to remain well over $ 200 billion a year for as far as the eye could see two years after the Clinton plan was enacted. The deficit began to fall after Republicans took over Congress and abandoned the fiscal expansionary direction of Clintonomics.

In any case, what is unarguable is that the deficit has vanished and has been replaced with large and growing tax surpluses.

No one knows precisely how large those tax overpayments will be, but almost everyone agrees they'll be very big. Over the next five years the budget forecasters in Washington expect more than $ 1 trillion of excess tax revenues. In the five years after that, the Congressional Budget Office crystal ball sees another $ 2 trillion of surplus tax collections. Those are conservative estimates. Economist Lawrence Kudlow has been the nation's most accurate fiscal prognosticator of the last decade, and he estimates tax surpluses will be twice as large as the official forecast.

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