GOP Wrong To Claim Obama Planning Largest Tax Hike In U.S. History
Submitted by Cheston Catalano
That’s what they’ll want you to believe, but it’s not true. If Congress doesn’t act, a number of tax cuts will expire, but reverting to pre-Bush tax levels won’t be the biggest increase in history.
…not when you take into account population growth, rising wages, and most importantly, the size of the U.S. economy. When those factors are taken into account, the largest tax increases were those imposed to help pay for World War II — back when the U.S. raised additional revenue to pay for wars instead of simply borrowing…
…the current top rate is 35 percent, on taxable income above $388,350. If Congress does nothing, the top rate would return to 39.6 percent next year — the same rate that was in place for most of the 1990s.
In dollars, next year’s tax hikes would be the biggest. But the population is more than twice as big as it was in the 1940s and the size of the U.S. economy is 80 times bigger. That’s why economists usually measure taxes and government spending as a share of the economy.