Thursday, September 26, 2013

Senators Worried about Incentives

The part of the paper Mr. Sessions is talking about is "The ACA has not been introduced into a tax-free economy, so its marginal tax rate hikes add to marginal tax rates already in effect. I estimate that, by 2015, the average marginal after-tax share among household heads and spouses with near-median weekly earnings will have fallen to 0.50 from 0.60 in 2007, largely from the ACA but also from other expansions in safety net programs. That is a massive 17 percent reduction in the reward to working – akin to erasing a decade of labor productivity growth without the wealth effect...."

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