House Republican leader John Boehner (R-Ohio) says the Democrats "are asking the American people to bankroll billions in wasteful Washington spending through the largest tax increase in American history." Senate Minority Leader Mitch McConnell (R-Ky.) ran with that talking point as well on Monday saying "the proposed tax hike the Democrats sent down last week is four times bigger than one in 1993" under Bill Clinton.
Really? Well, It depends on how you measure a tax increase.
If you're using fiscal 2009 dollars, then of course any expiration of the Bush tax cuts would add up to a much larger dollar amount. But as our grandparents used to say, a dollar in their day went a lot farther. When measured in constant dollars adjusted for inflation or percentage of gross domestic product, the current GOP rhetoric doesn't necessarily stand up.
According to this incredibly handy chart from the Treasury Department, there were much larger tax increases as a percentage of GDP during World War II _ upwards of 5 percent of GDP. Even under Ronald Reagan, the 1982 tax increase _ decried by some Republicans at the time as the largest tax increase in history _ amounted to about 1.28 percent of GDP. That 1993 tax increase under Bill Clinton was 0.83 percent of GDP over four years.
And President Bush's 2001 tax cuts amounted to 0.84 percent of GDP over four years. Treasury has yet to calculate the GDP impact if Bush's tax cuts partially expire, as some Democrats are proposing. But if the 2001 tax cuts amounted to less than 1 percent of GDP at the time, it's unlikely that letting them expire would create a tax increase on the magnitude of the Reagan tax increase or the World War II increases.
The chart allows readers to compare every tax increase and tax cut since 1940 using current dollars, constant 1992 dollars, percentage of GDP and percentage of federal revenue. Regardless of which measure is used, it's far from clear that the Democratic proposals would be the largest tax increase in American history.