15-Jan-08
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Table T08-0009
Tax Benefits of Select Tax Expenditures for Economic Mobility
Distribution of Federal Tax Change by Cash Income Percentile, 2006 1
Summary Table
Cash Income Level
(thousands of 2006
dollars) 2
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Percent of Tax Units 3
With Benefit
Without
Benefit
Benefit as
Percent of
After-Tax
Income4
Share of Total
Benefits
Average
Benefit
Average Federal Tax Rate 5
With Benefits Without Benefits
34.9
61.3
71.8
83.1
95.8
69.3
65.1
38.7
28.2
16.9
4.2
30.7
5.6
5.3
3.0
2.9
5.6
4.8
3.4
8.0
7.7
12.3
68.6
100.0
417
961
925
1,471
8,223
2,398
3.4
7.2
14.3
18.6
25.3
21.3
8.8
12.1
16.9
20.9
29.5
25.0
93.8
97.3
98.3
98.7
99.2
6.2
2.7
1.7
1.3
0.8
3.9
5.1
5.7
7.5
9.8
12.7
11.6
17.4
27.0
16.1
3,039
5,539
10,428
64,651
386,028
20.8
22.7
24.9
30.7
33.3
23.8
26.6
29.2
35.9
39.8
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 1006-2).
Number of AMT Taxpayers (millions). Baseline:
3.6
Proposal:
2.9
(1) Calendar year. Baseline is current law. Alternative repeals the Hope and Lifetime Learning credits, the student loan interest deduction, the home mortgage interest
deduction, the state and local property tax deduction, the self-employed health insurance deduction, the earned income tax credit, the child and dependent care credit,
the preferential rates on capital gains and dividends, the partial exclusion for Social Security benefits, and the exclusions and deductions for IRAs, Keogh plans, and
defined contribution retirement savings plans.
(2) Tax units with negative cash income are excluded from the lowest income class but are included in the totals. For a description of cash income, see
http://www.taxpolicycenter.org/TaxModel/income.cfm
(3) The cash income percentile breaks used in this table are (in 2006 dollars): 20% $13,640, 40% $26,417, 60% $46,362, 80% $82,316, 90% $121,201, 95%
$170,900, 99% $418,664, 99.5% $655,488, and 99.9% 1,907,342.
(4) Includes both filing and non-filing units but excludes those that are dependents of other tax units.
(5) After-tax income is cash income less: individual income tax net of refundable credits; corporate income tax; payroll taxes (Social Security and Medicare); and
estate tax.
(6) Average federal tax (includes individual and corporate income tax, payroll taxes for Social Security and Medicare, and the estate tax) as a percentage of average
cash income.
15-Jan-08
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Table T08-0009
Tax Benefits of Select Tax Expenditures for Economic Mobility
Distribution of Federal Tax Change by Cash Income Percentile, 2006
Detail Table
Cash Income Class
(thousands of 2006
dollars)2
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Percent of Tax Units 3
With Benefit
Without
Benefit
Benefit as
Percent of
After-Tax
Income 4
Share of Total
Benefits
Average Benefit
1
Share of Federal Taxes
Dollars
As Percent of
Tax
With Benefits
Without
Benefits
Average Federal Tax Rate5
With Benefits
Without
Benefits
34.9
61.3
71.8
83.1
95.8
69.3
65.1
38.7
28.2
16.9
4.2
30.7
5.6
5.3
3.0
2.9
5.6
4.8
3.4
8.0
7.7
12.3
68.6
100.0
417
961
925
1,471
8,223
2,398
157.3
67.6
18.2
12.7
16.6
17.6
0.4
2.1
7.5
17.0
72.8
100.0
0.8
3.0
7.5
16.3
72.2
100.0
3.4
7.2
14.3
18.6
25.3
21.3
8.8
12.1
16.9
20.9
29.5
25.0
93.8
97.3
98.3
98.7
99.2
6.2
2.7
1.7
1.3
0.8
3.9
5.1
5.7
7.5
9.8
12.7
11.6
17.4
27.0
16.1
3,039
5,539
10,428
64,651
386,028
14.8
17.2
17.4
16.8
19.7
15.1
11.8
17.7
28.2
14.4
14.8
11.8
17.6
28.0
14.7
20.8
22.7
24.9
30.7
33.3
23.8
26.6
29.2
35.9
39.8
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Baseline Distribution of Income and Federal Taxes
by Cash Income Percentile, 2006 1
Cash Income
Percentile 2,3
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Tax Units4
Number
(thousands)
Percent of
Total
Average
Income
(Dollars)
Average
Federal Tax
Burden
(Dollars)
Average After5
Tax Income
(Dollars)
Average
Federal Tax
Rate6
Share of PreTax Income
Percent of
Total
Share of PostTax Income
Percent of
Total
Share of
Federal Taxes
Percent of
Total
28,860
29,449
29,448
29,448
29,447
147,237
19.6
20.0
20.0
20.0
20.0
100.0
7,727
19,690
35,657
62,346
195,755
63,974
265
1,421
5,092
11,569
49,539
13,603
7,462
18,269
30,565
50,777
146,215
50,371
3.4
7.2
14.3
18.6
25.3
21.3
2.4
6.2
11.2
19.5
61.2
100.0
2.9
7.3
12.1
20.2
58.1
100.0
0.4
2.1
7.5
17.0
72.8
100.0
14,724
7,362
5,889
1,472
147
10.0
5.0
4.0
1.0
0.1
99,138
141,716
241,655
1,248,587
5,889,414
20,585
32,133
60,113
383,838
1,959,921
78,553
109,582
181,542
864,749
3,929,493
20.8
22.7
24.9
30.7
33.3
15.5
11.1
15.1
19.5
9.2
15.6
10.9
14.4
17.2
7.8
15.1
11.8
17.7
28.2
14.4
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 1006-2).
Number of AMT Taxpayers (millions). Baseline:
3.6
Proposal:
2.9
(1) Calendar year. Baseline is current law. Alternative repeals the Hope and Lifetime Learning credits, the student loan interest deduction, the home mortgage interest deduction, the state and local property tax deduction, the
self-employed health insurance deduction, the earned income tax credit, the child and dependent care credit, the preferential rates on capital gains and dividends, the partial exclusion for Social Security benefits, and the
exclusions and deductions for IRAs, Keogh plans, and defined contribution retirement savings plans.
(2) Tax units with negative cash income are excluded from the lowest income class but are included in the totals. For a description of cash income, see
http://www.taxpolicycenter.org/TaxModel/income.cfm
(3) The cash income percentile breaks used in this table are (in 2006 dollars): 20% $13,640, 40% $26,417, 60% $46,362, 80% $82,316, 90% $121,201, 95% $170,900, 99% $418,664, 99.5% $655,488, and 99.9% 1,907,342.
(4) Includes both filing and non-filing units but excludes those that are dependents of other tax units.
(5) After-tax income is cash income less: individual income tax net of refundable credits; corporate income tax; payroll taxes (Social Security and Medicare); and estate tax.
(6) Average federal tax (includes individual and corporate income tax, payroll taxes for Social Security and Medicare, and the estate tax) as a percentage of average cash income.