5-Dec-11
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Table T11-0396
Comparing a Doubled Making Work Pay Credit with the Social Security Tax Cut
Baseline: Current Policy
Comparison of Benefits by Cash Income Level, 2012 1
Average Benefit, Among Units
Benefiting (Dollars)
Units Benefiting from Provision
Cash Income Level
(thousands of 2009
dollars) 2
Tax Units
(thousands) 3
Less than 10
10-20
20-30
30-40
40-50
50-75
75-100
100-200
200-500
500-1,000
More than 1,000
All
23,145
28,071
20,804
17,402
13,820
20,095
14,158
19,099
6,052
1,034
516
165,201
Making Work
Pay Credit
Number
Percent
(thousands)
13,936
15,601
15,738
14,233
11,906
17,368
12,448
15,281
1,714
100
24
118,740
60.2
55.6
75.7
81.8
86.2
86.4
87.9
80.0
28.3
9.7
4.7
71.9
Social Security
Tax Cut
Number
Percent
(thousands)
13,455
15,128
15,302
13,700
11,465
16,727
12,211
17,079
5,476
907
451
122,274
58.1
53.9
73.6
78.7
83.0
83.2
86.2
89.4
90.5
87.7
87.4
74.0
Making Work
Pay Credit
357
695
826
909
975
1,093
1,230
1,354
761
1,216
1,267
927
Social Security
Tax Cut
118
255
408
566
718
977
1,332
2,025
2,520
2,677
2,716
920
Units with Higher Benefit from
Making Work
Pay Credit
Number
Benefit
(thousands)
Difference
13,927
15,571
15,684
14,101
8,752
9,706
6,352
2,989
258
41
10
87,755
244
449
432
370
412
518
376
507
524
542
503
401
Social Security
Tax Cut
Number
Benefit
(thousands)
Difference
10
30
54
132
3,154
7,663
6,131
14,250
5,227
867
441
37,983
483
369
234
221
76
312
546
1,081
2,417
2,686
2,720
990
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0411-2).
(1) Calendar year. Baseline is current policy. Social security tax cut reduces the OASDI tax rate on employees to 4.2%. Making work pay credit is twice as large as the credit in effect in 2009 and 2010 and equals 6.2% of
earnings up to $800 ($1,600 for couples--both values twice the 2009-10 limits) phased out at AGI of $75,000 to $95,000 ($150,000 to $190,000 for couples filing jointly). Benefit is a reduction in tax liability of $1 or
greater. For a description of TPC's current law and current policy baselines, see
http://www.taxpolicycenter.org/T11-0270
(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) Includes both filing and non-filing units but excludes those that are dependents of other tax units.