Tax Hikes Dampened Economy in the 1990s While Tax Cuts Spurred Growth
Created on September 6, 2011
Tax Hikes Dampened Economy in the 1990s, While Tax Cuts Spurred Growth
In the four years after the 1997 capital gains rate cut, real GDP and real wages had significantly higher annual growth.
In the four years following the 1993 Clinton tax hike, real GDP grew 3.3 percent annually, but real wages fell.
Chart 1 • BG 2601
Source: Heritage Foundation calculations based on data from U.S. Bureau of Economic Analysis and U.S. Department of Labor, Bureau of Labor Statistics.