3-Jun-08
http://www.taxpolicycenter.org
PRELIMINARY RESULTS
T08-0099
Income Subject to Tax and Effective Marginal Tax Rates
in the Regular Income Tax and the AMT Among AMT Taxpayers, Current Law 1
2007
Cash Income Class
(thousands of
2008$) 2
Less than 30
30-50
50-75
75-100
100-200
200-500
500-1,000
More than 1,000
All
Regular Tax
AMT
Average
Adjustments
and
Preferences4
0.0
99.5
90.0
88.9
95.2
69.4
9.9
13.6
63.4
100.0
0.5
10.0
11.2
4.8
30.6
90.1
86.5
36.6
983,913
38,071
34,408
33,483
35,423
33,337
47,691
193,232
43,439
Percent With More Income
Subject to Tax In3
Percent With a Higher
Marginal Tax Rate In 5
Regular Tax
AMT
0.0
0.1
0.0
4.5
4.4
22.0
64.1
61.4
26.1
100.0
99.7
100.0
95.4
89.6
77.1
34.6
34.1
71.9
Average Effective Marginal
Tax Rate (percent)6
Before AMT
-3.9
0.0
17.1
20.9
25.2
31.1
31.2
27.4
29.6
After AMT
17.0
14.5
26.0
27.6
29.2
33.6
29.5
27.1
31.8
2008
Cash Income Class
(thousands of
2008$) 2
Less than 30
30-50
50-75
75-100
100-200
200-500
500-1,000
More than 1,000
All
Regular Tax
AMT
Average
Adjustments
and
Preferences4
99.2
93.4
97.1
99.0
98.2
54.3
8.6
8.2
87.1
0.8
6.6
2.9
1.0
1.8
45.7
91.4
91.8
12.9
25,951
14,332
18,007
18,803
20,866
27,855
49,324
193,659
23,635
Percent With More Income
Subject to Tax In3
Percent With a Higher
Marginal Tax Rate In 5
Regular Tax
AMT
0.0
0.7
4.5
1.3
7.6
15.8
70.1
60.6
9.6
100.0
96.6
93.3
95.9
89.9
83.8
28.5
35.3
88.3
Average Effective Marginal
Tax Rate (percent)6
Before AMT
9.8
15.6
18.8
18.9
26.0
29.8
31.3
27.9
24.8
After AMT
26.0
23.9
25.0
25.9
28.6
33.2
28.8
27.6
28.6
2010
Cash Income Class
(thousands of
2008$) 2
Less than 30
30-50
50-75
75-100
100-200
200-500
500-1,000
More than 1,000
All
Regular Tax
AMT
Average
Adjustments
and
Preferences4
99.6
95.6
97.0
99.0
97.4
47.7
9.0
6.5
86.4
0.4
4.4
3.0
1.0
2.6
52.3
91.1
93.6
13.6
20,786
15,535
18,465
18,323
20,916
29,549
54,131
202,171
23,738
Percent With More Income
Subject to Tax In3
Percent With a Higher
Marginal Tax Rate In 5
Regular Tax
AMT
0.0
0.0
4.0
1.3
7.4
13.0
66.7
52.8
8.4
100.0
98.4
93.4
94.8
90.7
86.0
27.6
34.3
89.2
Average Effective Marginal
Tax Rate (percent)6
Before AMT
14.1
16.0
18.2
18.6
25.1
28.7
31.0
27.9
23.7
After AMT
24.3
25.7
24.6
25.6
28.1
32.7
28.7
27.6
28.0
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0308-5).
(1) AMT taxpayers include those with AMT liability from Form 6251, with lost credits, and with reduced deductions.
(2) Tax units with negative cash income are excluded from the lowest income class but are included in the totals. Includes both filing and nonfiling units. Tax units that are dependents of other taxpayers are excluded from the analysis. For a description of cash income, see
http://www.taxpolicycenter.org/TaxModel/income.cfm
(3) Income subject to tax for the regular income tax is taxable income; for the AMT it is AMTI net of the AMT exemption.
(4) Amounts are in nominal dollars to facilitate comparison with AMT exemption amounts. For 2007, the AMT exemption is $66,250 for
married couples filing jointly and surviving spouses; $44,350 for unmarried individuals other than surviving spouses; and $33,125 for married
individuals filing separately. For 2010, the exemption amounts are $45,000, $33,750, and $22,500 respectively.
(5) The marginal tax rate for each return is calculated by adding $1,000 to wages, recomputing income tax net of refundable credits, and
dividing the resulting change in tax liability by 1,000.
(6) Marginal tax rates represent a simple average across individuals.