Was the 1993 tax act “the largest tax increase in history?
” In a word, no. Expressed as a share of Gross Domestic Product (GDP), the 1993 Act’s tax hikes are dwarfed by several tax increases levied in the past. For example, the surtax enacted at the end of the Johnson administration to finance the Vietnam War amounted to 2.1 percent of the GDP. That’s three and a half times larger than Clinton’s annual tax boost. More recently, the 1982 Tax Equity and Fiscal Responsibility Act (TEFRA) resulted in tax increases representing one percent of the GDP–half again bigger than the 1993 tax act. Just as important, the 1993 tax changes were very progressive, concentrating mainly on taking back a portion the supply-side tax cuts that had gone to the very rich. In fact, except for a 4.3 cent increase in the gasoline tax, most families didn’t pay a penny more in federal taxes as a result of the 1993 act. The boost in the top personal income tax rate affected only the best-off one percent of all families, and the expanded taxation of Social Security benefi
