A "Second Opinion" On The Economic Health Of The American Middle Class
AbstractResearchers considering levels and trends in the resources available to the middle class traditionally measure the pre-tax cash income of tax units or the pre-tax, post-transfer, size-adjusted income of households. Choices regarding the income measure and sharing unit to be analyzed, as well as other methodological choices, carry significant implications for assessing income trends. In particular, we show that focusing on tax units rather than households and not adjusting for sharing unit size greatly reduces measured growth in middle class income, as does excluding the effect of taxes and the value of in-kind benefits. As an example, we demonstrate how much these distinctions change the observed distribution of benefits from the tax exclusion of employer provided health insurance.
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Bibliographic InfoArticle provided by National Tax Association in its journal National Tax Journal.
Volume (Year): 65 (2012)
Issue (Month): 1 (March)
Other versions of this item:
- Richard V. Burkhauser & Jeff Larrimore & Kosali I. Simon, 2011. "A "Second Opinion" on the Economic Health of the American Middle Class," NBER Working Papers 17164, National Bureau of Economic Research, Inc.
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
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