Middle-Class Tax Cuts

Congress faces critical decisions about middle-class tax relief in the next two years. Most provisions of the Bush tax cuts are scheduled to expire at the end of 2010, as are the income tax cuts provided in the recent stimulus package. President Obama has proposed permanent extension of the Bush tax cuts, except for households with the highest incomes, as well as permanent extension of the stimulus tax cuts.

The concept of middle-class tax relief enjoys strong political support. Notably, the concept was endorsed by both President Obama and his Republican opponent during the 2008 presidential campaign. Nevertheless, I recommend that Congress not adopt a significant package of permanent middle-class tax relief at this time. Middle-class tax cuts provide limited incentives for the work and saving that drive economic growth while imposing substantial revenue costs. Adoption of a large package of permanent middle-class tax relief would add to the long-run fiscal imbalance and impede capital formation, increasing the fiscal burdens on future middleclass taxpayers and reducing wages for middle-class workers.

Click here to view this document as an Adobe Acrobat PDF.

Alan D. Viard is a resident scholar at AEI.


Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Alan D.
Viard
  • Alan D. Viard is a resident scholar at the American Enterprise Institute (AEI), where he studies federal tax and budget policy.

    Prior to joining AEI, Viard was a senior economist at the Federal Reserve Bank of Dallas and an assistant professor of economics at Ohio State University. He has also been a visiting scholar at the US Department of the Treasury's Office of Tax Analysis, a senior economist at the White House's Council of Economic Advisers, and a staff economist at the Joint Committee on Taxation of the US Congress. While at AEI, Viard has also taught public finance at Georgetown University’s Public Policy Institute. Earlier in his career, Viard spent time in Japan as a visiting scholar at Osaka University’s Institute of Social and Economic Research.

    A prolific writer, Viard is a frequent contributor to AEI’s “On the Margin” column in Tax Notes and was nominated for Tax Notes’s 2009 Tax Person of the Year. He has also testified before Congress, and his work has been featured in a wide range of publications, including Room for Debate in The New York Times, TheAtlantic.com, Bloomberg, NPR’s Planet Money, and The Hill. Viard is the coauthor of “Progressive Consumption Taxation: The X Tax Revisited” (2012) and “The Real Tax Burden: Beyond Dollars and Cents” (2011), and the editor of “Tax Policy Lessons from the 2000s” (2009).

    Viard received his Ph.D. in economics from Harvard University and a B.A. in economics from Yale University. He also completed the first year of the J.D. program at the University of Chicago Law School, where he qualified for law review and was awarded the Joseph Henry Beale prize for legal research and writing.
  • Phone: 202-419-5202
    Email: aviard@aei.org
  • Assistant Info

    Name: Veronika Polakova
    Phone: 202-862-4880
    Email: veronika.polakova@aei.org

What's new on AEI

image A farm bill bait and switch
image Corker-Warner bill retains fatal flaw of GSE model
image Gas engine stands the test of time
image Women and the unequal pay myth
AEI on Facebook
Events Calendar
  • 17
    MON
  • 18
    TUE
  • 19
    WED
  • 20
    THU
  • 21
    FRI
Monday, June 17, 2013 | 6:00 p.m. – 7:00 p.m.
Brainwashed: The use and misuse of neuroscience

Join New York Times columnist David Brooks as he engages the authors of “Brainwashed: The Seductive Appeal of Mindless Neuroscience” Sally Satel and Scott Lilienfeld, in a discussion of popular neuroscience.

Tuesday, June 18, 2013 | 9:00 a.m. – 10:15 a.m.
The next digital crossroads: Regulating competition in the Internet ecosystem

Please join us for a preview of the revised and updated edition of Jonathan Nuechterlein and Philip Weiser’s influential 2005 book “Digital Crossroads: Telecommunications Law and Policy in the Internet Age” (MIT Press).

Event Registration is Closed
Tuesday, June 18, 2013 | 5:30 p.m. – 7:00 p.m.
Economic liberty and human flourishing: Perspectives from political philosophy

At this event, three expert panelists will examine this relationship from the perspectives of influential philosophers such as Aristotle, Alexis de Tocqueville, and representatives of the Scottish Enlightenment.

Event Registration is Closed
Wednesday, June 19, 2013 | 9:00 a.m. – 11:00 a.m.
Neighborhood watch: A time to lead in the Americas

This event has been canceled. We apologize for any inconvenience. 

Event has been Canceled
Wednesday, June 19, 2013 | 12:30 p.m. – 1:45 p.m.
Is college worth it?

At this event, Bennett and Wilezol will present their book, higher education finance experts Richard George and Richard Vedder will provide discussion, and a coffee reception and book signing will follow.

Wednesday, June 19, 2013 | 3:30 p.m. – 5:30 p.m.
Is Big Brother watching you?

Join General Michael Hayden (ret.), AEI’s Marc Thiessen, and other leading experts in national security for a panel discussion on the significance of the NSA leaks.

Thursday, June 20, 2013 | 1:00 p.m. – 2:15 p.m.
Balance: The economics of great powers from ancient Rome to modern America

Please join us for an event celebrating the release of Glenn Hubbard and Tim Kane’s “Balance: The Economics of Great Powers from Ancient Rome to Modern America” (Simon & Schuster, May 2013).

Friday, June 21, 2013 | 10:00 a.m. – 11:00 a.m.
Washington's ongoing assault on free speech: An address by Senate Minority Leader Mitch McConnell

In light of the emerging Internal Revenue Service scandal, Senator McConnell will again join AEI to comment on the use of government power to stifle speech and will propose solutions that protect the individual rights that are guaranteed to all citizens of the United States.  

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.