Should We Return To Clinton Era Tax Rates?

Jonathan Chait complains that conservatives are ignoring history when they comment on the expiration of the Bush tax cuts:

In 1993, conservatives unanimously predicted that Bill Clinton's tax increase on incomes over $200,000 would slow growth, reduce tax revenues, and likely cause a recession. Instead, of course, the economy boomed and revenue skyrocketed. Then George W. Bush cut upper-bracket tax rates, and conservatives predicted that this would cause the economy to grow even faster. Instead, the economy experienced the first business cycle where income was lower at the peak of the business cycle than it had been at the peak of the previous business cycle. It is rare that events so utterly repudiate an economic theory. None of this evidence has penetrated the conservative mind to the slightest degree. Reading the right-wing press, it is exactly as true today as it was 18 years ago that reducing Clinton-era upper-bracket tax rates holds the key to economic growth.

Despite reading Greg Mankiw, Reihan remains worried about what an increase in marginal tax rates will do to work incentives, and offers this proposal:

...let's focus on wasteful, duplicative, ineffective, and unwarranted spending first, reduce tax expenditures second, and then and only then consider raising the overall tax burden.

And have unicorns over for tea. In an ideal world, Reihan is right.

In reality, even the Tories are raising taxes because any attempt to tackle the debt realistically requires that. The Bush tax cuts became unaffordable as soon as we launched two wars. They were designed to end now. They are way lower than anything before Reagan, and the money has to be found somewhere. And what are the odds that the GOP will find $700 billion in "waste" next year? C'mon.

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I think the ideal balance is roughly $2 of spending cuts for $1 of tax hikes. Most of the tax hike is going to come from people like me; and I don't like it, and do think it adds a disincentive to work harder. But I also realize that spending cuts in entitlements will hurt many and we're all in this together (or should be). If we don't do something serious soon, the US will default, and these worries will seem puny. And there's no one's income left to tax but the successful's - and a gas tax or VAT (the better options) seem totally unacceptable to most Americans. So let's get on with it, and stop this 1980s posturing. It's 2010, guys. Wake the fuck up.