Tax wonk Chuck Marr of the Center on Budget and Policy Priorities had an excellent post yesterday afternoon about the wisdom of letting income tax rates on the wealthy return to their Clinton-era levels. In it, he notes that even Wall Street favorite Robert Rubin is endorsing the idea.
“Rubin was a key architect of President Clinton’s 1993 economic plan. With budget deficits high and projected to hit record levels, Clinton adopted a balanced approach of spending cuts and tax increases, including a rise in the top tax rate from 33 percent to 39.6 percent.
Just like today, critics warned that raising the top rate would wreck the economy and the promised deficit reduction would not occur. The opposite happened: economic growth averaged nearly 4 percent annually over the Clinton years, helping turn large deficits into large surpluses (see graph).”
Here is the rather remarkable graph to which Marr is referring: