Middle Class Tax Burden Still Out of Proportion

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First the good news: More Americans than ever -- 48 million, most earning less than $20,000 a year -- are expected to pay no federal income taxes in 1998, largely due to new tax breaks such as the $400-a-child tax credit. Now the bad news: Americans with incomes above $40,000 will wind up paying 96 percent of federal income taxes, a greater share of the tax burden than ever before.

The latest statistics from the Joint Committee on Taxation confirm what has been a long and disturbing trend. "The burden on the middle class has always been outsize," says TIME columnist Daniel Kadlec. "The last tax reform law simply did not include enough people." While it's good that low-income households are benefiting from tax breaks, Congress has failed to consider that married cops and schoolteachers, in households where both spouses work, can now jointly earn $100,000 a year. "But in big cities like New York or Chicago, that hardly makes them rich," says Kadlec.