[mbs[ actually, it was more like 1/2 of a percent. This makes a difference to your argument because the other half can migrate into the top bracket with income growth.
NN:
So all of the gross income increase that they enjoyed since then was earned at that highest marginal tax rate. Since the income tax they paid doubled from 1993 to 2000 (from $500 billion to nearly $1 trillion), at least that additional $500 billion of income tax receipts should have come from that highest rate level, even ignoring whatever other income they shunted off to capital gains.
[mbs] The $500 b applies to total revenue, not just taxes paid by the top one percent.
One way to get a fix on this is to use aggregate IRS numbers. The average rate between 1992 and 1994 -- bracketing the enactment of Nathan's beloved rate increase -- goes from .25 to .28 for the top 1.1 percent (basically those with $200K and over in AGI). This is obviously much less than Nathan's "33% increase in rates." At best it's a ten percent increase. And it's only temporary, as explained below. The revenue increase from this group (over two years) was $20b in 1996 dollars. So $20b is a reasonable upper bound for the effects of the '93 rate increase on revenue received from the top one percent.
Between 1995 and 1999, bracketing the capital gains debacle, the average effective rate of the top one percent (based on microdata) went down, from 23.8 to 22.6 percent.
Since Clinton is no less culpable for the rate cuts in '97 than the increases in '93, on balance it would be wrong to put very much into the '93 rate hikes in the Grand Scheme of Things.
NN . . . Maybe Max has the numbers available on changes in effective tax rates from 1993 to 2000. That is really the key number. I have been searching for them, but have not been able to turn them up. -- Nathan Newman
I don't think anyone has done that estimate yet. But it isn't the key number. The key would be the change immediately before and after the rate hike took effect (in 1993, I guess), since that range would most snugly bracket the effect of the '93 legislation. Everything after that is economic growth, change in composition of GDP, change in income distribution, the '97 legislation, and austerity in spending.
mbs