FactCheck.org Treasury Tax Expert to Bush: Clinton’s Increase WASN’T The Biggest.
Study published by Bush’s Treasury Department contradicts Bush’s campaign.

Summary

In speeches and fundraising appeals the Bush campaign keeps making a distorted claim that Clinton ‘s 1993 tax increase — supported by Kerry — was ”the biggest in history.”

Republicans have been repeating this gross overstatement for more than a decade, but now there’s less justification for it than ever. The GOP claim is contradicted by a study published last year by the Office of Tax Analysis of Bush’s own Treasury Department. …

A tax increase in 1942 boosted federal revenues by 71%, for example, as the US geared up for war after the Japanese attack on Pearl Harbor. Measured in inflation-adjusted 1992 dollars, Roosevelt’s wartime increase amounted to $73 billion a year, while Clinton’s increase averaged $35 billion a year (average for the first two years.)

The study said that inflation-adjusted ”constant dollars” is probably only the second -best measure of the size of a tax increase. ”The single best measure for most purposes is probably the revenue effect as a percentage of GDP.” That’s Gross Domestic Product, the way we gauge the size of the economy. Clinton’s tax increase isn’t the biggest by that ”best” measure, either. In the period since 1968, the study said, ”the Tax Equity and Fiscal Responsibility Act of 1982 was the biggest increase.” That was the tax increase signed by Ronald Reagan, rescinding some of the effects of his huge tax cut passed the year before.

That 1982 tax increase only slightly exceeded Clinton’s in inflation-adjusted dollars ($37 billion a year vs.. $32 billion) but it was much bigger in relation to the size of the economy. The ’82 increase amounted to 4.6% of GDP (average for the first two years) while Clinton’s was 2.7%.