Republican are making a similar argument against President Obama’s call to raise marginal tax rates on the richest Americans, even though the economy and jobs grew exponentially during the Clinton years when the top marginal tax rate was at 39.6 percent for the top income earners.
O’Donnell read off Gingrich’s false prediction and asked him to apologize to Americans:
O’DONNELL: Who said this? ‘The tax increase will kill jobs and lead to a recession, and the recession will force people out of work and onto unemployment, and actually increase the deficit.’ That’s Newt Gingrich, in 1993, on the Clinton tax increase, and those of us who were working on the other side of that tax increase, Newt, have been waiting for your apology for 20 years for being completely wrong about that.
GINGRICH: I don’t agree with you.
O’DONNELL: But the economy soared. No one lost a job because of that tax increase.
O’DONNELL: There was no recession, you said there would be a recession. There was no recession.
GINGRICH: The fact is, if you look at all the indicators when I was elected Speaker, virtually all of the economic growth occurs after the Republicans take control. Virtually all of the increase in the stock market, in fact all of the increase in the stock market is after the Republicans take control.
O’DONNELL: You did not reduce the rates, Newt. You said the rates would cause a recession.
GINGRICH: When we balanced the budget, we balanced the budget with a tax cut, not a tax increase. Four consecutive balanced budget with a tax cut, not a tax increase.
O’DONNELL: A tiny tax cut compared to the biggest tax increase in history, which is what Bill Clinton did. You didn’t dismantle it.
Indeed, in 1993 when President Bill Clinton raised taxes on the top income earners, Gingrich and the Republicans argued that the hikes would result in economic decline and result in huge deficits. They were proven wrong. The country experienced the “longest period of economic growth in U.S. history, increased business investment, 23 million jobs added, and, of course, budget surpluses.” The same boom did not materialize after President George W. Bush enacted his tax cuts; the country experienced large deficits and the weakest job and income growth in the post-war era.