Monday, June 11, 2012

Republicans are calling it "Taxmageddon," the big tax increase awaiting nearly every American family at the end of the year, when a long list of tax cuts are scheduled to expire unless Congress acts.

GOP leaders in Congress claim it would be "the largest tax increase in American history."

Except it wouldn't be, not when you take into account population growth, rising wages, and most importantly, the size of the U.S. economy. When those factors are taken into account, the largest tax increases were those imposed to help pay for World War II.

For example, a tax increase passed in 1942 represented more than 5 percent of the U.S. economy, as measured by the gross domestic product. Next year's looming tax increase would represent 2.6 percent of GDP.