Sunday, October 26, 2008

An Economist's Analysis of Obama's Tax Plan

Greg Mankiw analyzes the effect of Obama's tax plan on Mankiw's incentive to work. Conclusion? Mankiw has less incentive to work under Obama's tax plan than McCain's:

The bottom line: If you are one of those people out there trying to induce me to do some work for you, there is a good chance I will turn you down. And the likelihood will go up after President Obama puts his tax plan in place. I expect to spend more time playing with my kids. They will be poorer when they grow up, but perhaps they will have a few more happy memories.

(So, you might argue, Obama's tax plan is actually more pro family!)

Mankiw uses this chart from the Wall Street Journal as a handy comparison of the two tax plans on the table:

You might want to consider having a copy on hand when you enter the voting booth.

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