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 either tax units or households. In this paper, we demonstrate that this choice carries significant implications for assessing income trends. Focusing on tax units rather than households greatly reduces measured growth in middle class income. Furthermore, excluding the effect of taxes and the value of in-kind benefits further reduces observed improvements in the resources of the middle class. Finally, we show how these distinctions change the observed distribution of benefits from the tax exclusion of employer provided health insurance.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17164.
Date of creation: Jun 2011
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Find related papers by JEL classification:
- 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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- Dennis Fixler & David S. Johnson, 2012. "Accounting for the Distribution of Income in the U.S. National Accounts," NBER Chapters, in: Measuring Economic Sustainability and Progress National Bureau of Economic Research, Inc.
- Bargain, Olivier & Dolls, Mathias & Immervoll, Herwig & Neumann, Dirk & Peichl, Andreas & Pestel, Nico & Siegloch, Sebastian, 2013. "Partisan Tax Policy and Income Inequality in the U.S., 1979-2007," IZA Discussion Papers 7190, Institute for the Study of Labor (IZA).
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