7-Feb-06
Preliminary Results
http://www.taxpolicycenter.org
Table T06-0038
Combined Effect of EGTRRA, JGTRRA, and WFTRA With Extension of 2005 AMT Relief, Indexed for Inflation
Baseline is Pre-EGTRRA Law With Extension of 2000 AMT Exemption, Indexed for Inflation After 2000
1
Distribution of Federal Tax Change by Cash Income Class, 2007
Cash Income Class
(thousands of 2005
dollars)2
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
Percent of Tax Units3
With Tax
Cut
With Tax
Increase
4.4
50.3
79.6
87.6
94.1
98.0
99.2
99.5
99.4
98.8
99.1
74.3
0.1
0.5
0.3
0.1
0.1
0.0
0.0
0.0
0.1
0.2
0.2
0.2
Percent
Change in
After-Tax
Income4
0.1
1.3
2.5
2.5
2.3
2.3
2.8
3.4
3.2
4.3
5.7
3.1
Share of
Total Federal
Tax Change
0.0
2.1
5.0
5.1
4.6
10.9
10.7
24.7
12.7
6.4
17.8
100.0
Average Federal Tax Change
Dollars
-5
-190
-558
-748
-861
-1,176
-1,928
-3,576
-6,989
-21,130
-114,140
-1,562
Percent
-2.2
-20.3
-17.7
-12.6
-9.9
-9.0
-9.7
-10.3
-8.5
-10.1
-10.9
-10.2
Share of Federal Taxes
Change (%
Points)
0.0
-0.1
-0.2
-0.1
0.0
0.2
0.1
0.0
0.3
0.0
-0.1
0.0
Under the
Proposal
0.2
0.9
2.6
4.0
4.7
12.6
11.4
24.6
15.7
6.5
16.6
100.0
Average Federal Tax Rate5
Change (%
Points)
-0.1
-1.2
-2.2
-2.1
-1.9
-1.8
-2.2
-2.6
-2.3
-3.0
-3.7
-2.4
Under the
Proposal
3.9
4.8
10.1
14.4
16.8
18.6
20.0
22.4
25.3
26.8
30.4
20.8
Baseline Distribution of Income and Federal Taxes
by Cash Income Class, 2007 1
Cash Income Class
(thousands of 2005
dollars)2
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)
18,336
25,141
20,692
15,679
12,242
21,460
12,836
15,976
4,220
700
362
148,223
Percent of
Total
12.4
17.0
14.0
10.6
8.3
14.5
8.7
10.8
2.9
0.5
0.2
100.0
Average
Income
(Dollars)
5,875
15,558
25,732
36,235
46,569
63,972
89,802
139,382
298,369
706,013
3,053,799
65,748
Average
Federal Tax
Burden
(Dollars)
231
934
3,145
5,947
8,669
13,080
19,903
34,755
82,457
210,152
1,042,869
15,245
Average
After-Tax
Income4
(Dollars)
5,644
14,624
22,587
30,288
37,900
50,892
69,899
104,627
215,913
495,862
2,010,930
50,503
Average
Federal Tax
Rate5
Share of PreTax Income
Percent of
Total
Share of PostTax Income
Percent of
Total
3.9
6.0
12.2
16.4
18.6
20.5
22.2
24.9
27.6
29.8
34.2
23.2
1.1
4.0
5.5
5.8
5.9
14.1
11.8
22.9
12.9
5.1
11.3
100.0
1.4
4.9
6.2
6.3
6.2
14.6
12.0
22.3
12.2
4.6
9.7
100.0
Share of
Federal Taxes
Percent of
Total
0.2
1.0
2.9
4.1
4.7
12.4
11.3
24.6
15.4
6.5
16.7
100.0
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0305-3A).
Number of AMT Taxpayers (millions). Baseline:
1.9
Proposal:
4.4
(1) Calendar year. Baseline is pre-EGTRRA law plus extension of 2000 AMT exemption levels ($45,000 for married couples and $33,750 for singles and heads of household), indexed for inflation after
2000; and allowance of personal non-refundable credits regardless of tentative AMT. Proposal includes provisions in EGTRRA, JGTRRA, and WFTRA affecting the following: marginal tax rates; the 10percent 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; allowance of personal non-refundable credits
regardless of tentative AMT; and extending the non-refundable credit for elective deferrals and IRA contributions (the "saver's credit").
(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.