Are tax increases job killers? The complicated answer to a loaded question
The conventional wisdom is as old as economic theory: raise taxes during a recession or a down economy and you kill the recovery and job creation; lower taxes and jobs are created. The reality on the correlation between tax increases and job creation is much more complicated, as the debate is back on in Washington D.C. between President Obama, who wants to raise taxes on the wealthiest Americans to help close the budget deficit, and Congressional Republicans who want to keep current tax rates in place and slash spending instead. In the five years after a $241 billion tax increase under President Bill Clinton in 1993 the U.S. economy went on to create more than 15 million jobs and great at an average annual rate of 3.8%. In the five years after President George W. Bush reduced marginal tax rates in 2001 the economy created 6.5 million jobs and great at an annual 2.7% pace.