Subject: Re: 50 million to 1
The bill stemmed from a budget proposal made by Clinton in February 1993; he sought a mix of tax increases and spending reductions that would cut the deficit in half by 1997. Though every congressional Republican voted against the bill, it passed by narrow margins in both the House of Representatives and the Senate. The act increased the top federal income tax rate from 31% to 39.6%, increased the corporate income tax rate, raised fuel taxes, and raised various other taxes.

I remember this quite clearly. At the time I was reading all of the financial press I could get my hands on (I was running a newsletter company for the airline industry, Hispanic media, mainstream radio & TV, and others) and the overwhelming consensus was that it would crash the economy because, you know, “taxes”. Some were kinder and thought it would merely usher in a bad recession. There were predictions that the bond market would go haywire, that unemployment would soar, that … well, you get the idea.

At the time my reading list was the WSJ, Forbes, IBD, BusinessWeek, Fortune, CNBC, a few other newsletters, and as many online sources as were available with the simple “search and record” tools that CompuServe and AOL had at the time. The opinions of the tax hike were overwhelmingly negative and then…

Nothing happened. The internet was growing fast, new businesses were being created right and left, brick & mortar hadn’t yet realized their time was over, the bond market stayed quiescent, tax revenues soared, and the widely expected recession never happened. And … the budget was balanced.

Yes, I remember. It wasn’t “just” the tax increases, although that was certainly part of it. It was also the explosion of the internet, the availability of capital, and the limitations on government spending.

And then, of course, George Bush the lesser, aided by his buddies at the think tanks, declared “We can afford a tax cut”, followed closely by “We need a tax cut” at the first sign of the tech meltdown. We all know how that turned out.