THE CLAIM: In an election year, Republicans say that unless Congress acts to renew tax cuts scheduled to expire at year-end, Americans will face “Taxmageddon,” the biggest tax increase in history.
THE FACTS: In dollars, next year’s tax hikes would be the biggest. But the size of the economy is 80 times bigger than it was in the 1940s, which is why economists usually measure taxes and government spending as a share of the U.S. economy. Federal taxes would increase by about $423 billion next year if the tax cuts expire, but that pales in comparison to the taxes imposed to help finance World War II.
THE NUMBERS: Next year’s looming tax increase would represent 2.6 percent of gross domestic product, whereas the 1942 tax increase represented more than 5 percent of the U.S. economy.
