WHEN President Bill Clinton raised taxes on the wealthiest 1 per cent of Americans (the biggest tax increase in history at the time), Republicans predicted a tanked economy and a new recession.
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Over the next seven years everyone prospered. The stock market tripled in value. There were 22 million jobs created, the federal budget deficit was wiped out, and the percentage of Americans living in poverty fell from 13.6 to 9.6 percent.
By contrast, George W. Bush cut taxes, mostly for the wealthy, an economic strategy that wiped out the budget surplus and over the coming seven years created a US$1 trillion dollar deficit that left in its wake two recessions, increased poverty rates and a net gain of only three million jobs.
Conclusion: when either by fiscal strategy or good luck an abundance of tax dollars comes rolling into treasury we have a healthy economy. However, when taxation policies are abandoned and relaxed, the lack of tax receipts, smothers growth and the downturn translates to less employment, increased poverty, and a lower standard of living – a recession.
J. Macleod,
Berry.
