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Tax Foundation: Obama’s Income Tax Cliff for Senior Citizens

The Tax Foundation today published Obama’s Income Tax Cliff for Senior Citizens, by Mark Robyn:

In recent months the Presidential candidates have been busy crafting and promoting their tax plans. In an effort to reduce the tax burden on America’s seniors, Barack Obama has said that he will eliminate all income taxation for senior citizens making less than $50,000 per year. Putting aside the debate on whether this is a good policy, it might be worth exploring how such a policy would be implemented. It sounds simple enough: if you’re a senior and your income is less than $50,000, then you don’t pay income taxes (note that the threshold is for total income, which is greater than taxable income). But what happens when your income crosses that threshold? Obama’s plan does not address this question, and it turns out to be an important question.

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From the Tax Foundation’s Tax Policy Blog:

Following the release of our report, Obama advisers announced that the proposal will now include a "phase-out" with a cost of $2 billion, expanding the benefit to seniors making more than $50,000. Further analysis of this change will be forthcoming.


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