My Personal Work Incentives
Here is a question that you may have been thinking about: How do the different candidates' tax plans affect Greg Mankiw's incentive to work?
Okay, you probably haven't been thinking about this. But I have, because, after all, I am Greg Mankiw. And if you are here reading my blog, maybe you have some interest in the random thoughts running through my brain. So bear with me.
That is, Obama's proposed tax hikes reduce my incentive to work by 62 percent compared to the McCain plan and by 93 percent compared to the no-tax scenario. In a sense, putting the various pieces of the tax system together, I would be facing a marginal tax rate of 93 percent.