How do phase outs of tax benefits affect taxpayers? Q.How do phaseouts of tax provisions affect taxpayers? A.Many preferences in the tax code phase out for high-income taxpayers—their value falls as income rises. Phaseouts narrow the focus of tax benefits to low- and middle-income households while limiting revenue costs, but raise marginal tax rates for affected taxpayers. Read more about How do phase outs of tax benefits affect taxpayers?