They were indeed GOP initiated but of course Clinton gets credit b/c he was in office. Since when are capital gains tax cuts a Democratic strategy? That's why the current capital gains tax cuts were initiated by Bush and will expire at the end of this year because Obama will NOT be renewing them??

"Only a few weeks before the 1997 act was finally approved, Clinton promised that he would never sign anything like the unfair, budget-busting tax bills then pending in Congress...that promise turned out to be an empty one." Source

It seems likely, though admittedly less certain, that the Clinton tax increases in 1993, while not derailing the economy as many had forecast at the time, did indeed slow the recovery compared to what the economy could have achieved. We were coming out of the 90-91 recession that had been preceded by 8 straight periods of economic growth and so strong economic expansion was expected, but that expansion would, could have been even higher without the Clinton tax hikes.

The economy should have cooled in 1997 but it didn't thanks to Republican tax cuts. As far as evidence for the 'real boom' occuring in the later portion of the decade: The economy averaged 4.2 percent real growth per year from 1997 to 2000--a full percentage point higher than during the expansion following the 1993 tax hike. Employment increased by another 11.5 million jobs, which is roughly comparable to the job growth in the preceding four-year period. Real wages, however, grew at 6.5 percent, which is much stronger than the 0.8 percent growth of the preceding period. Finally, total market capitalization of the S&P 500 rose an astounding 95 percent. The period from 1997 to 2000 forms the memory of the booming 1990s, and it followed the passage of tax relief that was originally opposed by President Clinton.

Again, it's the other way around. It was a Republican-led Congress that passed a tax-relief and deficit-reduction bill that was resisted but ultimately signed by President Clinton. The bill among other things lowered the top capital gains tax rate from 28 percent to 20 percent and created a new $500 child tax credit.

"Only a few weeks before the 1997 act was finally approved, Clinton promised that he would never sign anything like the unfair, budget-busting tax bills then pending in Congress...that promise turned out to be an empty one." Source

It was President Clinton that ushered through Congress a large package of tax increases, which included the following: An increase in the individual income tax rate to 36 percent and a 10 percent surcharge for the highest earners, thereby effectively creating a top rate of 39.6 percent.


There's a reason that ultra conservatives like Sam Walton voted for Clinton and it wasn't b/c they share the same home state of Arkansas; Clinton is a brilliant man who supported business and REAL economic growth.

But you have to go back and look at the advantageous historical circumstances that were prevelant when Clinton took office: The end of the Cold War brought a new sense of hope and greater certainty to the global economy. The price of energy was astoundingly low, with oil prices dropping to about $11 per barrel and averaging under $20 per barrel compared to prices above $90 per barrel today. The Federal Reserve had finally succeeded in establishing a significant degree of price stability, with inflation averaging less than 2 percent during the Clinton Administration. And, of course, a tremendous set of new productivity-enhancing technologies involving information technologies and the World Wide Web burst on the scene.

AGain, in 1997, at a time when the expansion was well along and economic growth should have slowed, Congress passed a modest net tax cut. The economy grew by a full percentage point-per-year faster over his second term than over Clinton's first term.