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The Impact of the Presidential Candidates' Tax Proposals on Effective Marginal Tax Rates

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Publication Date: September 2008

Publisher(s): Tax Policy Center

Author(s): Katherine Lim; Jeff Rohaly

Special Collection: John D. and Catherine T. MacArthur Foundation

Topic: Banking and finance (Taxation and tax policy)

Keywords: Economy; Income and Wealth Distribution; Employment; Wages and Non-wage Compensation

Type: Paper


A taxpayer's effective marginal tax rate (EMTR) is the percentage of an additional dollar of income that would be paid in federal income tax. An individual's EMTR could affect the decision to work or save more, or avoid income tax. We use the TPC's microsimulation model of the federal tax system to calculate EMTRs under current law and under the presidential candidates' proposals. The Obama plan would lower EMTRs for the majority of households in 2009. Close to 80 percent of the population would see no change in their EMTR under Senator McCain's plan; most others would face lower rates.