Clinton Tax Increase

About Clinton Tax Increase

The Omnibus Budget Reconciliation Act of 1993, signed by President Clinton, raised the top individual income tax rate from 31 percent to 39.6 percent. The act also raised the corporate tax rate from 34 percent to 35 percent and removed the cap on Medicare taxes. Every Republican in Congress voted against the bill, which passed by one vote in the Senate with Vice President Gore casting the tie breaking vote. Republicans predicted the tax increase would cause a recession. Instead, the economy boomed. The 1993 tax increase, combined with spending restraint, produced the first federal budget surpluses since 1969. The surpluses were projected to eliminate the national debt by 2012. The September 11 attacks, the Bush tax cuts, and the wars in Iraq and Afghanistan eliminated the surpluses.