Clinton's 1993 budget was the largest tax increase in history
| Clinton's 1993 budget was the largest tax increase in history | |
|---|---|
| MISLEADING | |
| "The tax increase in Bill Clinton's 1993 budget was the largest in American history." | |
| Domain | Economy & Labor |
| Tactic | Statistical & Evidentiary Distortion |
| Era | Historical |
| First seen | 1993 |
| Origin | Republican opposition to the Omnibus Budget Reconciliation Act of 1993, repeated in later campaigns |
| Last reviewed | 2026-10-29 |
| Further reading: books on Economy & Labor | |
Bill Clinton's first budget, the Omnibus Budget Reconciliation Act of 1993, raised income tax rates on high earners, added a 4.3-cent gasoline tax increase, and taxed more of upper-income retirees' Social Security benefits. It passed without a single Republican vote. Opponents called it "the largest tax increase in history," a line repeated for years.
The claim holds only in unadjusted dollars. Measured against the size of the economy, earlier tax increases were bigger.
What the evidence shows
- Wartime taxes. The Revenue Act of 1942 raised far more relative to GDP than any later law.
- Reagan-era increase. In a 2006 Treasury Department analysis of federal tax legislation, economist Jerry Tempalski found that the Tax Equity and Fiscal Responsibility Act of 1982, signed by Ronald Reagan, was larger as a share of GDP than the 1993 act. FactCheck.org reported the comparison in 2004 using his earlier figures.
- Nominal dollars. Measured in dollars not adjusted for inflation or economic growth, the 1993 act was the largest to that point. Almost any recent law looks largest on that measure because the economy keeps growing.
Why it matters
Comparisons of tax laws mean little unless they account for inflation and the size of the economy. The 1993 increase was large and politically consequential, but "largest in history" depends on a measure chosen to make it look bigger.
Sources
- Jerry Tempalski, "Revenue Effects of Major Tax Bills," US Department of the Treasury, Office of Tax Analysis Working Paper 81, updated 2006.
- FactCheck.org, "Treasury Tax Expert to Bush: Clinton's Increase Not the Biggest," April 2004.
- Committee for a Responsible Federal Budget, "Is Clinton's Tax Increase One of the Largest in History?" 2016.