Obama’s Middle Class Tax Increase « The View from Alexandria

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Obama’s Middle Class Tax Increase

August 13, 2008 by philo

Alex Brill and Alan Viard show that Obama’s tax plan raises rates sharply, not only for the wealthy, but for most of the middle class. (HT: Greg Mankiw)

Posted in Politics, economics | Tagged Obama, taxes | 2 Comments

2 Responses

on August 18, 2008 at 8:13 am | Reply Alan Viard

I am one of the authors of the article about Obama’s tax plan that is mentioned here. I want to clarify that our article does not find “middle class tax increases” under Obama’s plan in the sense of higher tax payments by the middle class. As our article makes clear, most people would pay lower taxes under Obama’s plan because he would cut taxes for the lower and middle classes.

The point of our article, available at

http://www.american.com/archive/2008/august-08-08/the-folly-of-obama2019s-tax-plan

is that Obama’s tax cuts are designed in ways that raise MARGINAL tax rates and therefore reduce incentives to earn income. The marginal rate rises because the size of the tax cut falls as income rises. But, tax payments are lower under Obama’s plan (than under current law) at all of the income levels discussed in our article. The statement in this post that Obama’s tax plan “raises rates” should be amended to “raises marginal rates.”

Alan D. Viard, Resident Scholar
American Enterprise Institute
on August 18, 2008 at 11:00 am | Reply philo

Thanks for the correction.

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