In a recent article, economists have concluded that the increase in personal income tax rates will cause an increase in inflation. The federal government is expected to raise taxes on higher-income earners by $70 billion over 10 years as part of their plan to reduce the deficit. These new tax rates are scheduled to take effect January 1st, 2013 and will be levied against individuals making more than $400,00 a year and couples earning more than $450,00 annually. The article also mentions that the new tax rates will be levied against individuals making more than $400,00 a year and couples earning more than $450,00 annually. These new tax rates are scheduled to take effect January 2013 and will be levied against those who make over these amounts. One of the findings was that “higher-income earners would face an average increase in their after-tax income of about 0.27 percent.” It is expected by economists that this added burden on higher-income taxpayers could lead to a decrease in consumer spending as well as less investments being made into capital assets like housing or stocks. The idea behind raising taxes for high-income earners is not only to generate revenue but also redistribute wealth while at the same
