Brendan Nyhan

When tax families attack!

Paul Krugman notes the return of “tax families” in a White House fact sheet on the president’s views on economic stimulus:

While passing a new growth package is our most pressing economic priority, Congress needs to turn next to the most important economic priority for our country – making sure the tax relief that is now in place is not taken away. The President’s tax cuts are set to expire in less than three years. If Congress allows that to happen, we will see an end to many of the measures that have helped our economy grow – including the 10 percent individual income tax bracket, repeal of the Federal death tax, reductions in the marriage penalty, the expansion of the child tax credit, and reduced rates on regular income, capital gains, and dividends. This would mean that:
-A single mom with two children and $30,000 in earnings would see her taxes go up by 67 percent.
-An elderly couple with $40,000 in income would see their taxes go up by about 155 percent.
-Twenty-six million small business owners would see their taxes increase by nearly 17 percent – or about $4,000 on average.

However, these examples are selectively chosen and the “average” small business owner tax cut is highly unrepresentative — see All the President’s Spin and Spinsanity for much more on the administration’s misleading use of statistics in promoting its tax cut proposals.