Former President Clinton has been campaigning around the country, bashing the Republicans and GOP tax cut ideas, and urging Democrats to turn out and vote against them.
Invariably, Clinton reminds Democrats how great the economy was under his fiscal policies. But there is one Republican policy he signed into law (besides welfare reform) that he never says anything about: When he cut the capital gains tax rate that released a burst of venture capital and sent the stock market and the economy soaring on a wave of high-tech investment, creating jobs and boosting tax revenues that helped balance the budget.
He leaves this critical policy shift out of his campaign speeches because he knows Democrats don't want to hear about Republican-style tax-rate cuts that might help someone get a job. But it is the chief reason why the Clinton economy took off in the last half of his scandal-plagued presidency and has given him bragging rights ever since.
The story that Clinton and the Democrats don't want to bring up in the midst of Obama's failed economic stimulus agenda is important, because it clearly shows tax-cut incentives not only worked then, but can work again if only Obama would drop his ideological opposition to them.
In 1993, Clinton raised taxes on upper-income Americans, boosting the top rate to nearly 40 percent. But the higher tax rates didn't boost government revenues as Democrats and the administration hoped, despite the economy coming out of a short and shallow recession.
"The tax increases added very little to Treasury receipts despite their magnitude. Reports from the Congressional Budget Office and the Office of Management and Budget, and the Internal Revenue Service all agree," high-tech analyst Jerry Shenk writes on the American Thinker website.
Clinton boasts about his budget surpluses, but they did not occur until after the Republican-run Congress sent him a deficit-reducing bill in 1997 that he signed reluctantly. Among its tax cut provisions, it cut the capital gains rate from 28 percent to 20 percent.
"The 1997 rate reduction on capital gains unleashed the economy, causing capital investment to more than triple by 1998 and double again in 1999. Treasury receipts for this category of tax obligation increased dramatically," Shenk found.
"Without tax relief and the internet/communications revolution, the second Clinton term would likely have seen tax revenues decline in a lagging economy," he said.
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