Tax Foundation President Testifies Before Congress

May 11, 2007

Yesterday Tax Foundation President Scott Hodge testified during a Senate Committee on Finance hearing titled “Can the Middle Class Make Ends Meet? Economic Issues for America’s Working Families.”

He discussed recent Tax Foundation research on the middle-class tax burden and the changing demographics of the middle class. He explained that, due to the rise in dual-income couples, today’s statistical middle class does not resemble the middle class of 40 years ago. Today, the majority of the middle income quintile is unmarried individuals, while married couples with children tend to populate the top two income quintiles.

Hodge said the tax code is already asking too much of these married working couples, who are funding more than their share of government services.

He described the best way to help all taxpayers, including the statistical middle class and the married couples with children whom we tend to think of as middle-class regardless of their actual incomes:

Progressivity and tax simplification are not necessarily contradictory goals. Indeed, simplifying the tax system and broadening the tax base by eliminating preferences in the tax system that disproportionately benefit higher-income taxpayers will achieve both goals. Moreover, the benefits of eliminating the economic distortions caused by these tax preferences will not only accrue to the overall economy but also to the working families that lawmakers want to help.

The key to helping the so-called middle class while solving the inequality problem is to implement policies that make all Americans richer, not try to bring the top back down to the middle. Our attempts to promote equality should not produce mediocrity.

Read the full testimony.

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