2 thoughts on “Obama’s Middle Class Tax Increase

  1. 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

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