The New Quadruple Tax

The ACA can tax the same dollar of labor income 4 times, with each instance coming from a different part of the statute.

In counting 4 tax instances, I am not counting normal federal income tax, state income tax, the earned income tax credits, sales taxes, excise taxes, etc. — just stuff in the ACA itself. Nor I am counting the ACA’s new Medicare taxes, reinsurance taxes, medical device taxes, tanning taxes, brand name drug taxes, or any of the new taxes and credits associated with small businesses.

For now, I will give readers only a hint: when it determined that the ACA would increase marginal labor income tax rates by 20+% for some taxpayers, the Congressional Budget Office was considering only one of the four instances. As far as I know, none of the CBO’s publications acknowledge or examine the other three provisions as implicit taxes on labor income. Nor has the CBO necessarily identified the single largest (in marginal tax rate terms) of the four provisions, even though 20+% by itself is admittedly large.

Disclaimer: This page contains affiliate links. If you choose to make a purchase after clicking a link, we may receive a commission at no additional cost to you. Thank you for your support!

About Casey B. Mulligan 76 Articles

Affiliation: University of Chicago

Casey B. Mulligan is a Professor in the Department of Economics. Mulligan first joined the University of Chicago in 1991 as a graduate student, and received his Ph.D. in Economics from the University of Chicago in 1993.

He has also served as a Visiting Professor teaching public economics at Harvard University, Clemson University, and Irving B. Harris Graduate School of Public Policy Studies at the University of Chicago.

Mulligan is author of the 1997 book Parental Priorities and Economic Inequality, which studies economic models of, and statistical evidence on, the intergenerational transmission of economic status. His recent research is concerned with capital and labor taxation, with particular emphasis on tax incidence and positive theories of public policy. His recent work includes Market Responses to the Panic of 2008 (a book-in-process with Chicago graduate student Luke Threinen) and published articles such as “Selection, Investment, and Women’s Relative Wages,” “Deadweight Costs and the Size of Government,” “Do Democracies have Different Public Policies than Nondemocracies?,” “The Extent of the Market and the Supply of Regulation,” “What do Aggregate Consumption Euler Equations Say about the Capital Income Tax Burden?,” and “Public Policies as Specification Errors.” Mulligan has reported on some of these results in the Chicago Tribune, the Chicago Sun-Times, the Wall Street Journal, and the New York Times.

He is affiliated with a number of professional organizations, including the National Bureau of Economic Research, the George J. Stigler Center for the Study of the Economy and the State, and the Population Research Center. He is also the recipient of numerous awards and fellowships, including those from the National Science Foundation, the Alfred P. Sloan Foundation, the Smith- Richardson Foundation, and the John M. Olin Foundation.

Visit: Supply and Demand (in that order)

Be the first to comment

Leave a Reply

Your email address will not be published.


This site uses Akismet to reduce spam. Learn how your comment data is processed.