3-Feb-06
Preliminary Results
http://www.taxpolicycenter.org
Table T06-0033
Combined Effect of EGTRRA, JGTRRA, and WFTRA With Extension of 2005 AMT Relief, Indexed for Inflation
Baseline is Pre-EGTRRA Law
Distribution of Federal Tax Change by Cash Income Class, 2006 1
Cash Income Class
(thousands of 2005
2
dollars)
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
3
Percent of Tax Units
With Tax
Cut
With Tax
Increase
4.4
49.2
79.6
87.8
94.3
98.1
99.2
99.6
99.4
98.8
99.1
73.5
0.1
0.5
0.2
0.1
0.1
0.0
0.0
0.0
0.1
0.2
0.2
0.1
Percent
Change in
After-Tax
4
Income
0.1
1.3
2.5
2.5
2.4
2.4
3.0
3.7
3.4
4.3
5.7
3.2
Share of
Total
Federal Tax
Change
0.0
2.1
5.0
5.1
4.6
11.3
11.3
24.9
12.7
6.1
16.9
100.0
Average Federal Tax Change
Dollars
-5
-183
-561
-747
-877
-1,215
-2,063
-3,736
-7,249
-20,633
-111,549
-1,554
Percent
-2.1
-20.3
-18.2
-12.8
-10.3
-9.5
-10.5
-11.0
-9.0
-10.0
-10.8
-10.7
Share of Federal Taxes
Change (%
Points)
0.0
-0.1
-0.3
-0.1
0.0
0.2
0.0
-0.1
0.3
0.1
0.0
0.0
Under the
Proposal
0.2
1.0
2.7
4.1
4.8
12.8
11.5
24.2
15.4
6.5
16.7
100.0
Average Federal Tax Rate 5
Change (%
Points)
-0.1
-1.2
-2.2
-2.1
-1.9
-1.9
-2.4
-2.7
-2.5
-3.0
-3.7
-2.5
Under the
Proposal
3.8
4.7
10.0
14.4
16.7
18.5
20.0
22.3
25.2
26.9
30.8
20.7
Baseline Distribution of Income and Federal Taxes
by Cash Income Class, 2006 1
Cash Income Class
(thousands of 2005
2
dollars)
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
Tax Units3
Number
(thousands)
18,886
25,413
20,374
15,429
11,963
21,121
12,455
15,196
3,988
668
345
146,417
Percent of
Total
12.9
17.4
13.9
10.5
8.2
14.4
8.5
10.4
2.7
0.5
0.2
100.0
Average
Income
(Dollars)
5,743
15,208
25,206
35,525
45,636
62,649
87,930
136,287
292,415
690,594
2,994,463
62,970
Average
Federal Tax
Burden
(Dollars)
222
905
3,082
5,852
8,496
12,795
19,622
34,127
81,034
206,265
1,033,274
14,589
Average
After-Tax
4
Income
(Dollars)
5,522
14,303
22,125
29,672
37,140
49,853
68,308
102,160
211,381
484,328
1,961,189
48,380
Average
Federal Tax
5
Rate
Share of PreTax Income
Percent of
Total
Share of PostTax Income
Percent of
Total
3.9
6.0
12.2
16.5
18.6
20.4
22.3
25.0
27.7
29.9
34.5
23.2
1.2
4.2
5.6
5.9
5.9
14.4
11.9
22.5
12.7
5.0
11.2
100.0
1.5
5.1
6.4
6.5
6.3
14.9
12.0
21.9
11.9
4.6
9.6
100.0
Share of
Federal Taxes
Percent of
Total
0.2
1.1
2.9
4.2
4.8
12.7
11.4
24.3
15.1
6.5
16.7
100.0
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0305-3A).
Number of AMT Taxpayers (millions). Baseline:
7.6
Proposal:
4.0
(1) Calendar year. Baseline is pre-EGTRRA law. Proposal includes provisions in EGTRRA, JGTRRA, and WFTRA affecting the following: marginal tax rates; the 10-percent bracket; the child tax
credit; the child and dependent care credit; the standard deduction, 15-percent bracket, and EITC for married couples; tax rates on long-term capital gains and dividends; pension and IRA provisions;
expansion of student loan interest deduction (excludes other education provisions); and estate tax exemption, rates, and state death tax credit. Provisions also include extending the 2005 AMT
exemption levels ($58,000 for married couples and $40,250 for singles and heads of household), indexed for inflation after 2005; and allowance of personal non-refundable credits regardless of
tentative AMT.
(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. Tax units that are dependents of other taxpayers are excluded from the analysis.
(4) 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.
(5) 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.