11-Dec-09
PRELIMINARY RESULTS
CLICK ON PDF OR EXCEL FILE FOR ADDITIONAL TABLES THAT SHOW DISTRIBUTION BY AGE
http://www.taxpolicycenter.org
Table T09-0501
Certain Individual Income and Estate Tax Provisions in Administration's FY2010 Budget Proposals
Distribution of Federal Tax Change by Cash Income Percentile, 2011 1
All Tax Units
Percent of Tax Units4
Cash Income Percentile2,3
With Tax Cut
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
With Tax
Increase
Percent Change
in After-Tax
Income5
Share of Total
Federal Tax
Change
Average Federal Tax Change
Dollars
Percent
Share of Federal Taxes
Change (%
Points)
Under the
Proposal
Average Federal Tax Rate6
Change (%
Points)
Under the
Proposal
72.0
84.5
94.7
99.3
99.4
87.3
0.1
0.1
0.1
0.0
0.2
0.1
5.0
4.6
3.7
3.8
3.4
3.7
5.8
11.6
14.7
21.0
46.7
100.0
-496
-1,059
-1,484
-2,553
-6,483
-2,051
-101.8
-36.0
-17.8
-14.3
-8.8
-12.5
-0.7
-1.1
-0.6
-0.4
2.8
0.0
0.0
2.9
9.6
17.9
69.4
100.0
-4.7
-4.0
-3.1
-3.0
-2.4
-2.9
-0.1
7.2
14.1
18.2
25.3
20.1
99.5
99.8
99.4
96.3
87.3
0.0
0.1
0.2
3.4
12.3
4.5
4.2
3.5
1.7
1.3
17.1
10.3
12.4
6.9
2.5
-4,690
-5,900
-8,579
-18,755
-65,942
-14.3
-12.0
-9.4
-3.5
-2.4
-0.3
0.1
0.6
2.5
1.4
14.6
10.8
17.0
27.1
14.0
-3.4
-3.1
-2.6
-1.1
-0.9
20.5
22.7
24.8
31.1
34.5
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, 2011 1
Tax Units4
Cash Income Percentile2,3
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Number
(thousands)
Percent of
Total
Average
Income
(Dollars)
Average
Federal Tax
Burden
(Dollars)
Average AfterTax Income5
(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
37,292
34,806
31,498
26,231
22,974
155,368
24.0
22.4
20.3
16.9
14.8
100.0
10,481
26,186
48,373
84,329
267,017
71,667
487
2,943
8,323
17,855
74,081
16,458
9,993
23,243
40,050
66,474
192,936
55,208
4.7
11.2
17.2
21.2
27.7
23.0
3.5
8.2
13.7
19.9
55.1
100.0
4.3
9.4
14.7
20.3
51.7
100.0
0.7
4.0
10.3
18.3
66.6
100.0
11,625
5,563
4,611
1,175
119
7.5
3.6
3.0
0.8
0.1
136,507
191,223
333,276
1,657,137
7,672,765
32,702
49,296
91,094
534,071
2,714,593
103,805
141,927
242,182
1,123,066
4,958,172
24.0
25.8
27.3
32.2
35.4
14.3
9.6
13.8
17.5
8.2
14.1
9.2
13.0
15.4
6.9
14.9
10.7
16.4
24.5
12.6
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0509-4).
Number of AMT Taxpayers (millions). Baseline: 17.0
Proposal: 3.8
(1) Calendar year. Baseline is current law. Proposal would: (a) extend the 2009 AMT exemption levels and index them for inflation after 2009; (b) index the AMT tax bracket threshold and exemption phaseout threshold for
inflation; (c) allow personal nonrefundable credits (other than the child tax credit) regardless of AMT liability; (d) extend the 0 and 15 percent rates on capital gains and qualified dividends and add a 20 percent rate for taxpayers
otherwise in the 36 or 39.6 percent tax bracket; (e) extend the 10, 25, and 28 percent statutory marginal tax rates; (f) retain the 36 and 39.6 percent tax rates; (g) increase the threshold for the 36 percent tax rate to $231,300 for
married couples filing a joint return, $190,650 for singles, and $210,950 for heads of households (expressed in 2009 dollars); (h) set the standard deduction for married couples filing jointly equal to twice that for singles; (i)
increase the EITC plateau for married couples filing jointly by $5,000 (indexed for inflation after 2009); (j) set the threshold for the 15-percent bracket for married couples filing jointly equal to twice that for singles; (k) extend the
Making Work Pay credit currently scheduled to sunset on 12/31/10;
(l) reduce the phaseout rate from 2 to 1.6 percent; (m) index the phaseout thresholds for inflation after 2010; (n) repeal personal exemption phaseout (PEP) and limitation on itemized deductions (Pease) but only for taxpayers with
AGI less than $200,000 (in 2009$), $250,000 for married couples filing jointly; (o) extend education incentives including American Opportunity Tax Credit; (p) extend $1,000 child tax credit and CTC refundability provisions
and AMT treatment; (q) extend expansion of the child and dependent care tax credit; (r) extend EITC measures including additional tier for three or more children; and (s) extend 2009 estate tax law including: (i) maximum rate of
45 percent; (ii) $3.5 million effective exemption, not indexed for inflation; (iii) replace credit for state-level wealth transfer taxes with a deduction; (iv) effective repeal of Qualified Family Owned Business Interest (QFOBI)
deduction; and (v) repeal of the 5-percent surtax.
(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 classes used in this table are based on the income distribution for the entire population and contain an equal number of people, not tax units. The breaks are (in 2009 dollars): 20% $17,709, 40%
$34,668, 60% $63,846, 80% $104,388, 90% $167,146, 95% $210,251, 99% $555,037, 99.9% $2,351,648.
(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.
11-Dec-09
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Table T09-0501
Certain Individual Income and Estate Tax Provisions in Administration's FY2010 Budget Proposals
Distribution of Federal Tax Change by Cash Income Percentile, 2011 1
Tax Units with Head Under Age 50
Percent of Tax Units 4
Cash Income Percentile2,3
With Tax Cut
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
With Tax
Increase
Percent Change
in After-Tax
Income5
Share of Total
Federal Tax
Change
Average Federal Tax Change
Dollars
Percent
Share of Federal Taxes
Change (%
Points)
Under the
Proposal
Average Federal Tax Rate 6
Change (%
Points)
Under the
Proposal
90.6
98.2
99.5
99.9
99.7
95.9
0.0
0.1
0.0
0.0
0.2
0.1
7.0
6.2
4.4
4.2
3.4
4.2
8.1
15.5
17.1
21.9
37.1
100.0
-669
-1,417
-1,703
-2,779
-5,949
-2,080
-130.3
-42.5
-18.7
-14.9
-8.8
-14.2
-1.2
-1.7
-0.7
-0.2
3.8
0.0
-0.3
3.5
12.3
20.7
63.7
100.0
-6.7
-5.4
-3.6
-3.3
-2.4
-3.3
-1.6
7.3
15.4
18.8
25.1
19.6
99.8
100.0
99.7
96.3
87.0
0.0
0.0
0.1
3.4
12.7
4.7
4.1
3.1
1.4
1.3
16.1
8.7
8.5
3.8
1.5
-4,813
-5,817
-7,408
-15,213
-63,155
-14.6
-11.7
-8.1
-2.9
-2.3
-0.1
0.3
1.1
2.5
1.3
15.6
10.9
15.9
21.3
10.8
-3.5
-3.1
-2.2
-0.9
-0.8
20.6
23.0
25.2
31.5
34.9
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, 2011 1
Tax Units4
Cash Income Percentile2,3
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Average
Income
(Dollars)
Average
Federal Tax
Burden
(Dollars)
Average AfterTax Income5
(Dollars)
Number
(thousands)
Percent of
Total
22,363
20,162
18,432
14,480
11,472
88,402
25.3
22.8
20.9
16.4
13.0
100.0
10,047
26,323
48,020
84,402
245,362
63,985
513
3,337
9,117
18,650
67,537
14,635
9,533
22,987
38,903
65,752
177,825
49,350
6,159
2,744
2,105
464
43
7.0
3.1
2.4
0.5
0.1
136,363
190,783
332,790
1,619,647
7,884,376
32,891
49,777
91,105
525,972
2,813,027
103,472
141,006
241,686
1,093,675
5,071,349
Share of PreTax Income
Percent of
Total
Share of PostTax Income
Percent of
Total
Share of
Federal Taxes
Percent of
Total
5.1
12.7
19.0
22.1
27.5
22.9
4.0
9.4
15.7
21.6
49.8
100.0
4.9
10.6
16.4
21.8
46.8
100.0
0.9
5.2
13.0
20.9
59.9
100.0
24.1
26.1
27.4
32.5
35.7
14.9
9.3
12.4
13.3
6.1
14.6
8.9
11.7
11.6
5.1
15.7
10.6
14.8
18.9
9.5
Average
Federal Tax
Rate6
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0509-4).
(1) Calendar year. Baseline is current law. Proposal would: (a) extend the 2009 AMT exemption levels and index them for inflation after 2009; (b) index the AMT tax bracket threshold and exemption phaseout threshold for
inflation; (c) allow personal nonrefundable credits (other than the child tax credit) regardless of AMT liability; (d) extend the 0 and 15 percent rates on capital gains and qualified dividends and add a 20 percent rate for taxpayers
otherwise in the 36 or 39.6 percent tax bracket; (e) extend the 10, 25, and 28 percent statutory marginal tax rates; (f) retain the 36 and 39.6 percent tax rates; (g) increase the threshold for the 36 percent tax rate to $231,300 for
married couples filing a joint return, $190,650 for singles, and $210,950 for heads of households (expressed in 2009 dollars); (h) set the standard deduction for married couples filing jointly equal to twice that for singles; (i)
increase the EITC plateau for married couples filing jointly by $5,000 (indexed for inflation after 2009); (j) set the threshold for the 15-percent bracket for married couples filing jointly equal to twice that for singles; (k) extend
the Making Work Pay credit currently scheduled to sunset on 12/31/10;
(l) reduce the phaseout rate from 2 to 1.6 percent; (m) index the phaseout thresholds for inflation after 2010; (n) repeal personal exemption phaseout (PEP) and limitation on itemized deductions (Pease) but only for taxpayers
with AGI less than $200,000 (in 2009$), $250,000 for married couples filing jointly; (o) extend education incentives including American Opportunity Tax Credit; (p) extend $1,000 child tax credit and CTC refundability
provisions and AMT treatment; (q) extend expansion of the child and dependent care tax credit; (r) extend EITC measures including additional tier for three or more children; and (s) extend 2009 estate tax law including: (i)
maximum rate of 45 percent; (ii) $3.5 million effective exemption, not indexed for inflation; (iii) replace credit for state-level wealth transfer taxes with a deduction; (iv) effective repeal of Qualified Family Owned Business
Interest (QFOBI) deduction; and (v) repeal of the 5-percent surtax.
(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 classes used in this table are based on the income distribution for the entire population and contain an equal number of people, not tax units. The breaks are (in 2009 dollars): 20% $17,709, 40%
$34,668, 60% $63,846, 80% $104,388, 90% $167,146, 95% $210,251, 99% $555,037, 99.9% $2,351,648.
(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.
11-Dec-09
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Table T09-0501
Certain Individual Income and Estate Tax Provisions in Administration's FY2010 Budget Proposals
Distribution of Federal Tax Change by Cash Income Percentile, 2011 1
Tax Units with Head Age 50-64
Percent of Tax Units 4
Cash Income Percentile2,3
With Tax Cut
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
With Tax
Increase
Percent Change
in After-Tax
Income5
Share of Total
Federal Tax
Change
Average Federal Tax Change
Dollars
Percent
Share of Federal Taxes
Change (%
Points)
Under the
Proposal
Average Federal Tax Rate 6
Change (%
Points)
Under the
Proposal
67.0
86.3
96.1
99.5
99.5
88.5
0.2
0.3
0.2
0.0
0.2
0.2
4.0
3.8
3.3
3.4
3.0
3.2
3.5
7.1
11.7
21.0
56.5
100.0
-388
-858
-1,308
-2,264
-5,968
-2,178
-66.1
-24.2
-14.3
-11.9
-7.7
-9.7
-0.3
-0.5
-0.4
-0.4
1.6
0.0
0.2
2.4
7.6
16.7
73.0
100.0
-3.8
-3.3
-2.7
-2.7
-2.1
-2.4
1.9
10.2
16.1
19.7
25.8
22.5
99.5
99.9
99.6
96.5
88.4
0.0
0.0
0.1
3.1
11.2
4.2
4.0
3.2
1.3
1.0
19.4
13.8
15.1
8.2
2.7
-4,307
-5,615
-7,664
-15,378
-47,266
-12.6
-11.1
-8.4
-2.9
-1.8
-0.5
-0.2
0.2
2.0
1.2
14.4
11.9
17.6
29.2
15.3
-3.2
-2.9
-2.3
-0.9
-0.6
21.8
23.5
25.1
30.4
33.7
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, 2011 1
Tax Units4
Cash Income Percentile2,3
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Average
Income
(Dollars)
Average
Federal Tax
Burden
(Dollars)
Average AfterTax Income5
(Dollars)
Number
(thousands)
Percent of
Total
7,428
6,852
7,447
7,716
7,864
38,128
19.5
18.0
19.5
20.2
20.6
100.0
10,314
26,304
48,649
84,770
278,512
90,475
587
3,545
9,155
18,999
77,897
22,490
9,728
22,759
39,494
65,771
200,615
67,985
3,741
2,044
1,637
441
47
9.8
5.4
4.3
1.2
0.1
136,627
191,453
331,880
1,686,150
7,480,216
34,076
50,603
90,972
527,158
2,566,648
102,551
140,850
240,909
1,158,993
4,913,568
Share of PreTax Income
Percent of
Total
Share of PostTax Income
Percent of
Total
Share of
Federal Taxes
Percent of
Total
5.7
13.5
18.8
22.4
28.0
24.9
2.2
5.2
10.5
19.0
63.5
100.0
2.8
6.0
11.4
19.6
60.9
100.0
0.5
2.8
8.0
17.1
71.4
100.0
24.9
26.4
27.4
31.3
34.3
14.8
11.4
15.8
21.6
10.2
14.8
11.1
15.2
19.7
8.9
14.9
12.1
17.4
27.1
14.1
Average
Federal Tax
Rate6
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0509-4).
(1) Calendar year. Baseline is current law. Proposal would: (a) extend the 2009 AMT exemption levels and index them for inflation after 2009; (b) index the AMT tax bracket threshold and exemption phaseout threshold for
inflation; (c) allow personal nonrefundable credits (other than the child tax credit) regardless of AMT liability; (d) extend the 0 and 15 percent rates on capital gains and qualified dividends and add a 20 percent rate for taxpayers
otherwise in the 36 or 39.6 percent tax bracket; (e) extend the 10, 25, and 28 percent statutory marginal tax rates; (f) retain the 36 and 39.6 percent tax rates; (g) increase the threshold for the 36 percent tax rate to $231,300 for
married couples filing a joint return, $190,650 for singles, and $210,950 for heads of households (expressed in 2009 dollars); (h) set the standard deduction for married couples filing jointly equal to twice that for singles; (i)
increase the EITC plateau for married couples filing jointly by $5,000 (indexed for inflation after 2009); (j) set the threshold for the 15-percent bracket for married couples filing jointly equal to twice that for singles; (k) extend
the Making Work Pay credit currently scheduled to sunset on 12/31/10;
(l) reduce the phaseout rate from 2 to 1.6 percent; (m) index the phaseout thresholds for inflation after 2010; (n) repeal personal exemption phaseout (PEP) and limitation on itemized deductions (Pease) but only for taxpayers
with AGI less than $200,000 (in 2009$), $250,000 for married couples filing jointly; (o) extend education incentives including American Opportunity Tax Credit; (p) extend $1,000 child tax credit and CTC refundability
provisions and AMT treatment; (q) extend expansion of the child and dependent care tax credit; (r) extend EITC measures including additional tier for three or more children; and (s) extend 2009 estate tax law including: (i)
maximum rate of 45 percent; (ii) $3.5 million effective exemption, not indexed for inflation; (iii) replace credit for state-level wealth transfer taxes with a deduction; (iv) effective repeal of Qualified Family Owned Business
Interest (QFOBI) deduction; and (v) repeal of the 5-percent surtax.
(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 classes used in this table are based on the income distribution for the entire population and contain an equal number of people, not tax units. The breaks are (in 2009 dollars): 20% $17,709, 40%
$34,668, 60% $63,846, 80% $104,388, 90% $167,146, 95% $210,251, 99% $555,037, 99.9% $2,351,648.
(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.
11-Dec-09
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Table T09-0501
Certain Individual Income and Estate Tax Provisions in Administration's FY2010 Budget Proposals
Distribution of Federal Tax Change by Cash Income Percentile, 2011 1
Tax Units with Head Age 65 or Over
Percent of Tax Units 4
Cash Income Percentile2,3
With Tax Cut
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
With Tax
Increase
Percent Change
in After-Tax
Income5
Share of Total
Federal Tax
Change
Average Federal Tax Change
Dollars
Percent
Share of Federal Taxes
Change (%
Points)
Under the
Proposal
Average Federal Tax Rate 6
Change (%
Points)
Under the
Proposal
21.3
47.5
77.2
96.9
98.1
59.4
0.0
0.1
0.1
0.0
0.5
0.1
0.8
1.3
2.2
3.3
4.1
3.2
1.3
4.7
10.8
17.9
65.2
100.0
-89
-310
-999
-2,298
-9,280
-1,796
-28.7
-22.2
-21.7
-17.9
-10.7
-12.8
-0.1
-0.3
-0.7
-0.8
1.8
0.0
0.5
2.4
5.7
12.0
79.3
100.0
-0.8
-1.2
-2.0
-2.8
-3.0
-2.6
1.9
4.2
7.4
12.6
24.9
17.5
98.0
98.9
98.2
95.8
86.1
0.0
0.4
0.4
3.8
13.5
4.7
4.7
5.4
2.7
2.1
16.9
10.4
22.1
15.8
5.5
-5,085
-6,944
-13,141
-30,364
-101,929
-17.5
-15.7
-14.4
-5.4
-3.6
-0.7
-0.3
-0.4
3.1
2.0
11.7
8.1
19.2
40.3
21.3
-3.7
-3.6
-3.9
-1.8
-1.3
17.5
19.4
23.2
31.6
35.3
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, 2011 1
Tax Units4
Cash Income Percentile2,3
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Average
Income
(Dollars)
Average
Federal Tax
Burden
(Dollars)
Average AfterTax Income5
(Dollars)
Number
(thousands)
Percent of
Total
7,501
7,793
5,620
4,035
3,638
28,838
26.0
27.0
19.5
14.0
12.6
100.0
11,939
25,726
49,167
83,224
310,453
70,347
311
1,396
4,614
12,814
86,465
14,072
11,627
24,330
44,553
70,409
223,988
56,275
1,725
774
869
270
28
6.0
2.7
3.0
0.9
0.1
136,764
192,173
337,081
1,674,080
7,668,294
29,050
44,132
91,297
559,292
2,811,389
107,715
148,041
245,784
1,114,788
4,856,904
Share of PreTax Income
Percent of
Total
Share of PostTax Income
Percent of
Total
Share of
Federal Taxes
Percent of
Total
2.6
5.4
9.4
15.4
27.9
20.0
4.4
9.9
13.6
16.6
55.7
100.0
5.4
11.7
15.4
17.5
50.2
100.0
0.6
2.7
6.4
12.7
77.5
100.0
21.2
23.0
27.1
33.4
36.7
11.6
7.3
14.4
22.3
10.5
11.5
7.1
13.2
18.5
8.3
12.4
8.4
19.6
37.2
19.3
Average
Federal Tax
Rate6
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0509-4).
(1) Calendar year. Baseline is current law. Proposal would: (a) extend the 2009 AMT exemption levels and index them for inflation after 2009; (b) index the AMT tax bracket threshold and exemption phaseout threshold for
inflation; (c) allow personal nonrefundable credits (other than the child tax credit) regardless of AMT liability; (d) extend the 0 and 15 percent rates on capital gains and qualified dividends and add a 20 percent rate for taxpayers
otherwise in the 36 or 39.6 percent tax bracket; (e) extend the 10, 25, and 28 percent statutory marginal tax rates; (f) retain the 36 and 39.6 percent tax rates; (g) increase the threshold for the 36 percent tax rate to $231,300 for
married couples filing a joint return, $190,650 for singles, and $210,950 for heads of households (expressed in 2009 dollars); (h) set the standard deduction for married couples filing jointly equal to twice that for singles; (i)
increase the EITC plateau for married couples filing jointly by $5,000 (indexed for inflation after 2009); (j) set the threshold for the 15-percent bracket for married couples filing jointly equal to twice that for singles; (k) extend
the Making Work Pay credit currently scheduled to sunset on 12/31/10;
(l) reduce the phaseout rate from 2 to 1.6 percent; (m) index the phaseout thresholds for inflation after 2010; (n) repeal personal exemption phaseout (PEP) and limitation on itemized deductions (Pease) but only for taxpayers
with AGI less than $200,000 (in 2009$), $250,000 for married couples filing jointly; (o) extend education incentives including American Opportunity Tax Credit; (p) extend $1,000 child tax credit and CTC refundability
provisions and AMT treatment; (q) extend expansion of the child and dependent care tax credit; (r) extend EITC measures including additional tier for three or more children; and (s) extend 2009 estate tax law including: (i)
maximum rate of 45 percent; (ii) $3.5 million effective exemption, not indexed for inflation; (iii) replace credit for state-level wealth transfer taxes with a deduction; (iv) effective repeal of Qualified Family Owned Business
Interest (QFOBI) deduction; and (v) repeal of the 5-percent surtax.
(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 classes used in this table are based on the income distribution for the entire population and contain an equal number of people, not tax units. The breaks are (in 2009 dollars): 20% $17,709, 40%
$34,668, 60% $63,846, 80% $104,388, 90% $167,146, 95% $210,251, 99% $555,037, 99.9% $2,351,648.
(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.