Obama’s Tax Plan

Well well. This analysis shows that Senator Obama’s “tax cut for the middle class” is actually a tax increase for at least some of the middle class. This happens because of the complexity created by tax credits and tax credit phase-outs. I’m sure the good Senator doesn’t intend to increase middle class taxes (or, at the every least, doesn’t intend for people to know). These kind of problems result from the bewildering complexity of the tax code and Congressional attempts to micro-manage the economy. Regardless of what policitians propose, further complication of the tax code will make it harder to predict consequences. Obama may want to reduce taxes on the middle class, but without simplifying the tax code, the actual results are unpredictable. It’s a shame that tax simplification isn’t a big campaign issue.

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