Forbes: Higher Taxes: Will the Republicans Cry Wolf Again?, by Bruce Bartlett:

Yesterday, President Obama issued his first detailed budget. Among its most controversial proposals is a significant increase in taxes, especially on those with upper incomes. Obama also proposes a cap-and-trade system to reduce pollution that is in essence a broad-based energy tax.

Republicans will undoubtedly make extravagant claims about the detrimental economic effect of these higher taxes. When one hears these claims, however, it is worth remembering that they said the same things in years past and none of their dire predictions came to pass.

According to a recent Treasury Department study, Ronald Reagan proposed the largest peacetime tax increase in American history as part of a budget deal to get the federal deficit under control. The Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 was signed into law on Sept. 3, and most of its provisions took effect on Jan. 1, 1983.

During debate on TEFRA, many conservatives predicted economic disaster. They argued that raising taxes in the midst of a severe recession was exactly the wrong thing to do. …

Looking at the data, however, it is very hard to see any evidence that TEFRA had a negative effect on growth. Indeed, one could easily make a case that its enactment stimulated growth. As one can see, the economy's growth rates after TEFRA took effect were among the fastest in history.

Year/Quarter	Real GDP Growth
1982 III	-1.5%
1982 IV	0.4%
1983 I	5.0%
1983 II	9.3%
1983 III	8.1%
1983 IV	8.4%
1984 I	8.1%
1984 II	7.1%

The unemployment rate also peaked just before TEFRA took effect at 10.8% in December 1982. Throughout 1983, it fell steadily to 8.3% by year's end. The unemployment rate continue to fall through 1984, reaching 7.3% by December.

In 1993, Bill Clinton proposed another major tax increase. Perhaps because it was initiated by a Democrat, conservatives were even more convinced that it would bring about economic disaster. …

An examination of the data, however, shows that this forecast was totally wrong in every respect. The following table shows what happened after the 1993 tax increase was signed into law on Aug. 10.

Year/Quarter	Real GDP Growth	Gross Private Domestic Investment
1993 III	2.1%	0.0%
1993 IV	5.5%	22.3%
1994 I	4.1%	18.3%
1994 II	5.3%	25.5%
1994 III	2.3%	-6.9%
1994 IV	4.8%	19.9%

…  None of this is meant to defend Obama's tax increases. They must be judged on their own merits and in terms of the potential benefits of the programs they would fund. But when Republicans claim that higher taxes will destroy the economy, they should be reminded that they made the same argument in 1982 and 1993 and that the actual economic results were the opposite of what they predicted. And when they denounce Obama's health plan for expanding the size of government, they should be asked how they voted on the Medicare bill in 2003.