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During 1990s, Tax Hikes Dampened While Tax Cuts Spurred Economic Growth

Created on June 3, 2011

During 1990s, Tax Hikes Dampened While Tax Cuts Spurred Economic Growth

In the four years following the 1993 Clinton tax hike, real GDP grew 3.3 percent annually, but real wages fell.

In the four years after the 1997 capital gains rate cut, real GDP and real wages had significantly higher annual growth.

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0%

+1%

+2%

+3%

+4%

+1.7%

+4.4%

–0.06%

+3.3%

Real Wages

GDP

 

Sources: U.S. Bureau of Economic Analysis and Bureau of Labor Statistics.