What has happened to the GOP party?
Presidential candidate Donald Trump has put forth proposals to exempt tips and overtime from income taxation. These exemptions would almost exclusively benefit low- and middle-income households. Examining the economic consequences of these proposals is a worthwhile exercise. Incentives drive economic behavior. Encourage an activity, and we get more of it. Discourage it, and we get less. These tax exemptions dramatically increase the incentive to work for low- and middle-income households because they will keep more of their wages. They are virtually worthless to higher income ...