12-May-09 PRELIMINARY RESULTS http://www.taxpolicycenter.org Click on PDF or Excel link above for additional tables containing more detail and breakdowns by filing status and demographic groups. Table T09-0260 Replace ESI Exclusion and Self-Employment Health Insurance Deduction With Voucher to Purchase Private Insurance Impose Comprehensive VAT at Tax Exclusive Rate of 8.4% With $500 Individual Cash Subsidy Distribution of Federal Tax Change by Cash Income Level, 2009 1 Summary Table Cash Income Level (thousands of 2009 2 dollars) Less than 10 10-20 20-30 30-40 40-50 50-75 75-100 100-200 200-500 500-1,000 More than 1,000 All Percent of Tax Units 3 With Tax Cut 93.9 87.9 75.6 63.3 59.6 50.6 45.2 25.4 7.6 6.1 3.1 60.7 With Tax Increase 6.1 12.0 24.4 36.7 40.4 49.3 54.8 74.6 92.4 93.9 96.9 39.2 Percent Change in After-Tax 4 Income 61.8 18.9 9.6 5.7 3.6 1.4 -0.2 -3.3 -6.6 -7.4 -7.4 0.0 Share of Total Federal Tax Change -3,652.2 -4,465.4 -3,225.2 -1,822.0 -1,163.3 -1,135.1 188.3 4,626.1 4,747.3 2,272.7 3,957.5 100.0 Average Federal Tax Change ($) -3,474 -2,851 -2,250 -1,763 -1,376 -700 169 3,529 14,713 38,354 146,017 10 Average Federal Tax Rate Change (% Points) -62.9 -18.9 -9.1 -5.1 -3.1 -1.1 0.2 2.6 5.1 5.6 5.4 0.0 5 Under the Proposal -64.7 -18.6 -3.3 5.8 10.5 14.6 17.6 22.4 27.6 29.6 32.6 18.0 Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0309-2). Number of AMT Taxpayers (millions). Baseline: 3.8 Proposal: 4.1 (1) Calendar year. Baseline is current law. Proposal replaces the employer sponsored insurance deduction and self-employment health insurance deduction with a voucher to purchase private insurance. Individual voucher value depends on age and gender; the total voucher for each tax unit is the sum of each individual's voucher. Only individuals not on public insurance receive a voucher. The proposal imposes a revenue neutral comprehensive VAT at tax exclusive rate of 8.4% to finance the voucher and $500 individual cash subsidy. The VAT is distributed to labor earnings plus all capital. (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. (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. 12-May-09 PRELIMINARY RESULTS http://www.taxpolicycenter.org Table T09-0260 Replace ESI Exclusion and Self-Employment Health Insurance Deduction With Voucher to Purchase Private Insurance Impose Comprehensive VAT at Tax Exclusive Rate of 8.4% With $500 Individual Cash Subsidy Distribution of Federal Tax Change by Cash Income Level, 2009 1 Detail Table Cash Income Level (thousands of 2009 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 Units 3 With Tax Cut With Tax Increase 93.9 87.9 75.6 63.3 59.6 50.6 45.2 25.4 7.6 6.1 3.1 60.7 6.1 12.0 24.4 36.7 40.4 49.3 54.8 74.6 92.4 93.9 96.9 39.2 Percent Change in After-Tax Income 4 61.8 18.9 9.6 5.7 3.6 1.4 -0.2 -3.3 -6.6 -7.4 -7.4 0.0 Share of Total Federal Tax Change -3,652.2 -4,465.4 -3,225.2 -1,822.0 -1,163.3 -1,135.1 188.3 4,626.1 4,747.3 2,272.7 3,957.5 100.0 Average Federal Tax Change Dollars -3,474 -2,851 -2,250 -1,763 -1,376 -700 169 3,529 14,713 38,354 146,017 10 Percent 3,511.6 -7,365.9 -157.1 -46.7 -22.7 -7.2 1.1 13.3 22.5 23.5 19.9 0.1 Share of Federal Taxes Change (% Points) Average Federal Tax Rate 5 Under the Proposal Change (% Points) Under the Proposal -2.9 -3.4 -0.9 1.6 3.1 11.3 13.1 30.5 20.0 9.2 18.5 100.0 -62.9 -18.9 -9.1 -5.1 -3.1 -1.1 0.2 2.6 5.1 5.6 5.4 0.0 -64.7 -18.6 -3.3 5.8 10.5 14.6 17.6 22.4 27.6 29.6 32.6 18.0 Share of PreTax Income Percent of Total Share of PostTax Income Percent of Total Share of Federal Taxes Percent of Total 0.8 3.3 5.0 5.0 5.3 14.0 13.5 24.6 13.0 5.6 10.2 100.0 1.0 4.0 5.7 5.5 5.6 14.4 13.6 24.1 12.3 5.2 9.1 100.0 -0.1 0.1 1.6 3.0 4.0 12.2 13.0 27.0 16.3 7.5 15.4 100.0 -2.8 -3.5 -2.5 -1.4 -0.9 -0.9 0.1 3.6 3.7 1.8 3.1 0.0 Baseline Distribution of Income and Federal Taxes by Cash Income Level, 2009 1 Cash Income Level (thousands of 2009 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 Units 3 Number (thousands) 15,207 22,657 20,737 14,945 12,224 23,449 16,133 18,960 4,667 857 392 150,979 Percent of Total 10.1 15.0 13.7 9.9 8.1 15.5 10.7 12.6 3.1 0.6 0.3 100.0 Average Income (Dollars) 5,525 15,088 24,780 34,833 44,804 61,698 86,623 134,298 289,582 680,610 2,700,196 68,631 Average Federal Tax Burden (Dollars) -99 39 1,432 3,774 6,077 9,689 15,031 26,539 65,287 163,195 733,247 12,367 Average AfterTax Income 4 (Dollars) 5,624 15,049 23,348 31,059 38,727 52,009 71,592 107,759 224,295 517,415 1,966,949 56,264 Average Federal Tax Rate 5 -1.8 0.3 5.8 10.8 13.6 15.7 17.4 19.8 22.6 24.0 27.2 18.0 Source: Urban-Brookings Tax Policy Center Microsimulation Model (version0309-2). Number of AMT Taxpayers (millions). Baseline: 3.8 Proposal: 4.1 (1) Calendar year. Baseline is current law. Proposal replaces the employer sponsored insurance deduction and self-employment health insurance deduction with a voucher to purchase private insurance. Individual voucher value depends on age and gender; the total voucher for each tax unit is the sum of each individual's voucher. Only individuals not on public insurance receive a voucher. The proposal imposes a revenue neutral comprehensive VAT at tax exclusive rate of 6.7% to finance the voucher and $500 individual cash subsidy. The VAT is distributed to labor earnings plus all capital. (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. (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. 12-May-09 PRELIMINARY RESULTS http://www.taxpolicycenter.org Table T09-0260 Replace ESI Exclusion and Self-Employment Health Insurance Deduction With Voucher to Purchase Private Insurance Impose Comprehensive VAT at Tax Exclusive Rate of 8.4% With $500 Individual Cash Subsidy Distribution of Federal Tax Change by Cash Income Level, 2009 1 Detail Table - Single Tax Units Cash Income Level (thousands of 2009 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 Units 3 With Tax Cut With Tax Increase 92.9 85.7 69.8 49.7 42.4 27.1 13.3 8.0 8.2 12.7 3.2 59.7 7.1 14.2 30.1 50.1 57.6 72.8 86.6 92.0 91.8 87.3 96.8 40.3 Percent Change in After-Tax Income 4 49.1 10.8 4.3 1.1 -1.1 -3.4 -4.6 -5.6 -5.9 -5.6 -6.8 -0.1 Share of Total Federal Tax Change -1,236.4 -939.4 -465.1 -102.4 108.9 680.6 531.0 752.5 380.5 149.8 294.6 100.0 Average Federal Tax Change Dollars -2,573 -1,519 -936 -314 421 1,674 3,068 5,670 13,169 28,616 125,835 34 Percent -1,569.9 -169.7 -34.0 -5.8 5.3 14.1 16.3 19.3 19.6 16.9 15.5 0.4 Share of Federal Taxes Average Federal Tax Rate 5 Under the Proposal Change (% Points) Under the Proposal -5.1 -1.7 4.0 7.4 9.6 24.3 16.7 20.5 10.2 4.6 9.7 100.0 -47.6 -10.1 -3.8 -0.9 0.9 2.8 3.6 4.3 4.5 4.2 4.7 0.1 -44.6 -4.2 7.4 14.7 18.8 22.3 25.4 26.7 27.5 29.0 35.3 18.6 Share of PreTax Income Percent of Total Share of PostTax Income Percent of Total Share of Federal Taxes Percent of Total 2.1 7.6 10.0 9.3 9.5 20.3 12.2 14.3 6.9 2.9 5.1 100.0 2.5 8.8 11.0 9.6 9.6 20.0 11.7 13.6 6.5 2.7 4.4 100.0 0.4 2.5 6.1 7.9 9.1 21.4 14.4 17.3 8.6 3.9 8.4 100.0 Change (% Points) -5.5 -4.2 -2.1 -0.5 0.4 2.9 2.3 3.2 1.6 0.6 1.3 0.0 Baseline Distribution of Income and Federal Taxes by Cash Income Level, 2009 1 Cash Income Level (thousands of 2009 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 Units 3 Number (thousands) Percent of Total 10,640 13,688 10,999 7,212 5,727 9,001 3,832 2,938 640 116 52 65,239 16.3 21.0 16.9 11.1 8.8 13.8 5.9 4.5 1.0 0.2 0.1 100.0 Average Income (Dollars) 5,407 14,979 24,656 34,817 44,776 60,853 86,147 131,358 292,079 683,645 2,664,301 41,404 Average Federal Tax Burden (Dollars) 164 895 2,757 5,447 7,989 11,910 18,816 29,448 67,195 169,705 814,189 7,673 Average AfterTax Income 4 (Dollars) 5,243 14,084 21,899 29,370 36,787 48,943 67,331 101,910 224,884 513,940 1,850,113 33,731 Average Federal Tax Rate 5 3.0 6.0 11.2 15.7 17.8 19.6 21.8 22.4 23.0 24.8 30.6 18.5 Source: Urban-Brookings Tax Policy Center Microsimulation Model (version0309-2). (1) Calendar year. Baseline is current law. Proposal replaces the employer sponsored insurance deduction and self-employment health insurance deduction with a voucher to purchase private insurance. Individual voucher value depends on age and gender; the total voucher for each tax unit is the sum of each individual's voucher. Only individuals not on public insurance receive a voucher. The proposal imposes a revenue neutral comprehensive VAT at tax exclusive rate of 6.7% to finance the voucher and $500 individual cash subsidy. The VAT is distributed to labor earnings plus all capital. (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. (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. 12-May-09 PRELIMINARY RESULTS http://www.taxpolicycenter.org Table T09-0260 Replace ESI Exclusion and Self-Employment Health Insurance Deduction With Voucher to Purchase Private Insurance Impose Comprehensive VAT at Tax Exclusive Rate of 8.4% With $500 Individual Cash Subsidy Distribution of Federal Tax Change by Cash Income Level, 2009 1 Detail Table - Married Tax Units Filing Jointly Cash Income Level (thousands of 2009 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 Units 3 With Tax Cut With Tax Increase 95.4 91.4 84.9 81.1 78.1 69.5 57.9 29.1 7.3 5.0 2.9 56.8 4.6 8.6 15.0 18.9 21.9 30.5 42.0 70.9 92.8 95.0 97.1 43.2 Percent Change in After-Tax Income 4 Share of Total Federal Tax Change 142.1 35.4 18.2 11.7 8.6 5.0 1.4 -2.8 -6.7 -7.7 -7.5 -1.0 -27.9 -40.9 -38.9 -28.6 -25.7 -54.3 -21.1 88.2 109.7 53.5 89.3 100.0 Average Federal Tax Change Dollars -7,436 -5,712 -4,532 -3,929 -3,564 -2,747 -1,040 3,090 15,057 39,941 146,292 890 Percent 4,315.9 1,026.9 -10,359.8 -256.3 -100.3 -35.8 -7.7 11.9 23.1 24.7 20.8 4.3 Share of Federal Taxes Average Federal Tax Rate 5 Under the Proposal Change (% Points) Under the Proposal -1.2 -1.9 -1.6 -0.7 0.0 4.0 10.5 34.2 24.1 11.2 21.4 100.0 -147.0 -36.7 -18.2 -11.2 -7.9 -4.4 -1.2 2.3 5.2 5.9 5.5 0.8 -150.4 -40.2 -18.0 -6.8 0.0 7.9 14.4 21.4 27.7 29.7 32.1 19.6 Share of PreTax Income Percent of Total Share of PostTax Income Percent of Total Share of Federal Taxes Percent of Total 0.2 0.9 1.7 2.1 2.6 10.0 14.2 31.2 17.0 7.4 13.1 100.0 0.2 1.2 2.1 2.4 3.0 10.8 14.8 31.0 16.2 6.9 11.8 100.0 0.0 -0.2 0.0 0.5 1.1 6.5 11.8 31.8 20.4 9.3 18.5 100.0 Change (% Points) -1.2 -1.7 -1.6 -1.2 -1.1 -2.5 -1.4 2.3 3.7 1.8 2.9 0.0 Baseline Distribution of Income and Federal Taxes by Cash Income Level, 2009 1 Cash Income Level (thousands of 2009 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 Units 3 Number (thousands) Percent of Total 1,998 3,803 4,567 3,867 3,840 10,515 10,783 15,177 3,875 712 324 59,744 3.3 6.4 7.6 6.5 6.4 17.6 18.1 25.4 6.5 1.2 0.5 100.0 Average Income (Dollars) 5,059 15,576 24,929 35,061 44,910 62,818 87,017 135,259 289,456 680,193 2,650,897 110,299 Average Federal Tax Burden (Dollars) -172 -556 44 1,533 3,554 7,685 13,530 25,892 65,129 161,911 704,575 20,672 Average AfterTax Income 4 (Dollars) 5,232 16,132 24,886 33,528 41,356 55,133 73,487 109,367 224,326 518,282 1,946,322 89,627 Average Federal Tax Rate 5 -3.4 -3.6 0.2 4.4 7.9 12.2 15.6 19.1 22.5 23.8 26.6 18.7 Source: Urban-Brookings Tax Policy Center Microsimulation Model (version0309-2). (1) Calendar year. Baseline is current law. Proposal replaces the employer sponsored insurance deduction and self-employment health insurance deduction with a voucher to purchase private insurance. Individual voucher value depends on age and gender; the total voucher for each tax unit is the sum of each individual's voucher. Only individuals not on public insurance receive a voucher. The proposal imposes a revenue neutral comprehensive VAT at tax exclusive rate of 6.7% to finance the voucher and $500 individual cash subsidy. The VAT is distributed to labor earnings plus all capital. (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. (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. 12-May-09 PRELIMINARY RESULTS http://www.taxpolicycenter.org Table T09-0260 Replace ESI Exclusion and Self-Employment Health Insurance Deduction With Voucher to Purchase Private Insurance Impose Comprehensive VAT at Tax Exclusive Rate of 8.4% With $500 Individual Cash Subsidy Distribution of Federal Tax Change by Cash Income Level, 2009 1 Detail Table - Head of Household Tax Units Cash Income Level (thousands of 2009 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 Units 3 With Tax Cut With Tax Increase 97.4 91.6 79.3 70.5 70.0 53.0 32.2 18.6 14.6 6.4 6.0 72.9 2.6 8.4 20.7 29.5 29.9 47.0 67.8 81.4 85.5 93.6 94.1 27.1 Percent Change in After-Tax Income 4 51.1 24.5 11.6 6.8 4.9 1.1 -2.5 -4.0 -5.6 -6.9 -8.3 6.1 Share of Total Federal Tax Change 19.0 41.0 28.5 15.0 9.1 3.7 -4.5 -5.7 -2.7 -1.4 -2.6 100.0 Average Federal Tax Change Dollars -3,915 -4,173 -2,929 -2,167 -1,932 -536 1,721 3,953 12,366 34,750 157,889 -2,113 Share of Federal Taxes Average Federal Tax Rate 5 Percent Change (% Points) Under the Proposal Change (% Points) Under the Proposal 317.4 207.9 687.2 -86.6 -36.2 -5.6 10.9 14.4 20.1 21.4 21.6 -52.4 -24.4 -56.5 -33.7 -6.5 4.5 33.9 28.6 29.0 10.6 5.2 9.7 0.0 -27.5 -66.8 -35.8 2.6 17.7 68.5 50.1 49.7 17.6 8.5 16.0 100.0 -60.8 -27.8 -11.8 -6.3 -4.3 -0.9 2.0 3.1 4.4 5.2 6.0 -5.5 -80.0 -41.2 -13.5 1.0 7.6 15.0 20.5 24.8 26.1 29.5 33.8 5.0 Average Federal Tax Rate 5 Share of PreTax Income Percent of Total Share of PostTax Income Percent of Total Share of Federal Taxes Percent of Total -19.2 -13.4 -1.7 7.2 11.9 15.9 18.5 21.7 21.7 24.3 27.8 10.5 1.7 8.1 13.3 13.2 11.6 22.8 12.2 10.0 3.4 1.4 2.4 100.0 2.3 10.3 15.1 13.6 11.5 21.5 11.1 8.8 2.9 1.2 1.9 100.0 -3.1 -10.3 -2.2 9.1 13.2 34.5 21.5 20.7 7.0 3.3 6.3 100.0 Baseline Distribution of Income and Federal Taxes by Cash Income Level, 2009 1 Cash Income Level (thousands of 2009 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 Units 3 Number (thousands) Percent of Total 2,405 4,868 4,812 3,429 2,343 3,396 1,290 713 107 19 8 23,435 10.3 20.8 20.5 14.6 10.0 14.5 5.5 3.0 0.5 0.1 0.0 100.0 Average Income (Dollars) 6,435 15,009 24,923 34,560 44,753 60,572 85,205 126,502 283,499 668,859 2,631,074 38,440 Average Federal Tax Burden (Dollars) -1,233 -2,007 -426 2,502 5,335 9,619 15,775 27,446 61,629 162,736 732,563 4,035 Average AfterTax Income 4 (Dollars) 7,669 17,017 25,350 32,059 39,418 50,954 69,430 99,056 221,870 506,123 1,898,511 34,405 Source: Urban-Brookings Tax Policy Center Microsimulation Model (version0309-2). (1) Calendar year. Baseline is current law. Proposal replaces the employer sponsored insurance deduction and self-employment health insurance deduction with a voucher to purchase private insurance. Individual voucher value depends on age and gender; the total voucher for each tax unit is the sum of each individual's voucher. Only individuals not on public insurance receive a voucher. The proposal imposes a revenue neutral comprehensive VAT at tax exclusive rate of 6.7% to finance the voucher and $500 individual cash subsidy. The VAT is distributed to labor earnings plus all capital. (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. (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. 12-May-09 PRELIMINARY RESULTS http://www.taxpolicycenter.org Table T09-0260 Replace ESI Exclusion and Self-Employment Health Insurance Deduction With Voucher to Purchase Private Insurance Impose Comprehensive VAT at Tax Exclusive Rate of 8.4% With $500 Individual Cash Subsidy Distribution of Federal Tax Change by Cash Income Level, 2009 1 Detail Table - Tax Units with Children Cash Income Level (thousands of 2009 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 Units 3 With Tax Cut With Tax Increase 98.2 92.5 80.1 73.5 74.6 68.3 56.3 29.3 7.5 3.9 3.1 63.7 1.8 7.5 19.9 26.4 25.3 31.6 43.7 70.7 92.6 96.2 96.9 36.3 Percent Change in After-Tax Income 4 67.4 27.3 13.3 9.2 7.6 4.8 1.5 -2.8 -6.8 -8.1 -8.0 0.6 Share of Total Federal Tax Change 72.6 130.9 96.4 67.2 56.4 93.3 30.3 -123.0 -146.2 -70.7 -111.9 100.0 Average Federal Tax Change Dollars -5,112 -4,893 -3,513 -3,055 -3,102 -2,565 -1,051 3,005 14,944 41,256 155,001 -439 Percent 355.4 177.9 245.9 -208.3 -74.3 -30.3 -7.5 11.5 22.1 24.1 20.2 -3.1 Share of Federal Taxes Change (% Points) -2.3 -4.2 -3.1 -2.1 -1.7 -2.6 -0.6 4.9 5.2 2.5 4.1 0.0 Average Federal Tax Rate 5 Under the Proposal Change (% Points) Under the Proposal -2.9 -6.4 -4.3 -1.1 0.6 6.7 11.8 37.7 25.5 11.5 20.9 100.0 -83.1 -32.2 -14.1 -8.8 -6.9 -4.1 -1.2 2.2 5.2 6.1 5.7 -0.5 -106.5 -50.4 -19.8 -4.6 2.4 9.5 15.0 21.6 28.8 31.4 34.0 16.8 Baseline Distribution of Income and Federal Taxes by Cash Income Level, 2009 1 Cash Income Level (thousands of 2009 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 Units 3 Number (thousands) Percent of Total 3,041 5,731 5,881 4,714 3,898 7,792 6,174 8,773 2,096 367 155 48,765 6.2 11.8 12.1 9.7 8.0 16.0 12.7 18.0 4.3 0.8 0.3 100.0 Average Income (Dollars) 6,151 15,177 25,010 34,815 44,858 61,928 86,600 135,158 287,617 678,793 2,707,503 83,132 Average Federal Tax Burden (Dollars) -1,438 -2,750 -1,429 1,467 4,175 8,453 14,062 26,237 67,750 171,567 766,165 14,393 Average AfterTax Income 4 (Dollars) 7,589 17,928 26,439 33,348 40,683 53,475 72,538 108,921 219,867 507,226 1,941,338 68,738 Average Federal Tax Rate 5 Share of PreTax Income Percent of Total Share of PostTax Income Percent of Total Share of Federal Taxes Percent of Total -23.4 -18.1 -5.7 4.2 9.3 13.7 16.2 19.4 23.6 25.3 28.3 17.3 0.5 2.2 3.6 4.1 4.3 11.9 13.2 29.3 14.9 6.1 10.3 100.0 0.7 3.1 4.6 4.7 4.7 12.4 13.4 28.5 13.8 5.6 9.0 100.0 -0.6 -2.3 -1.2 1.0 2.3 9.4 12.4 32.8 20.2 9.0 16.9 100.0 Source: Urban-Brookings Tax Policy Center Microsimulation Model (version0309-2). Note: Tax units with children are those claiming an exemption for children at home or away from home. (1) Calendar year. Baseline is current law. Proposal replaces the employer sponsored insurance deduction and self-employment health insurance deduction with a voucher to purchase private insurance. Individual voucher value depends on age and gender; the total voucher for each tax unit is the sum of each individual's voucher. Only individuals not on public insurance receive a voucher. The proposal imposes a revenue neutral comprehensive VAT at tax exclusive rate of 6.7% to finance the voucher and $500 individual cash subsidy. The VAT is distributed to labor earnings plus all capital. (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. (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. 12-May-09 PRELIMINARY RESULTS http://www.taxpolicycenter.org Table T09-0260 Replace ESI Exclusion and Self-Employment Health Insurance Deduction With Voucher to Purchase Private Insurance Impose Comprehensive VAT at Tax Exclusive Rate of 8.4% With $500 Individual Cash Subsidy Distribution of Federal Tax Change by Cash Income Level, 2009 1 Detail Table - Elderly Tax Units Cash Income Level (thousands of 2009 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 Units 3 With Tax Cut With Tax Increase 91.4 90.5 79.7 68.8 59.1 44.1 40.1 21.2 9.2 4.7 1.9 60.1 8.6 9.5 20.1 31.1 40.9 55.7 59.8 78.8 90.9 95.4 98.1 39.8 Percent Change in After-Tax Income 4 33.0 6.3 3.3 1.9 0.8 -0.1 -0.4 -2.9 -5.5 -6.1 -6.8 -1.7 Share of Total Federal Tax Change -12.4 -18.0 -11.6 -4.6 -2.0 0.4 3.0 36.2 44.9 21.4 42.7 100.0 Average Federal Tax Change Dollars -1,924 -962 -783 -637 -357 27 281 3,269 12,967 31,818 129,544 1,062 Percent -13,010.3 -789.6 -157.2 -61.2 -18.4 0.5 2.9 15.7 22.8 21.0 18.7 10.3 Share of Federal Taxes Average Federal Tax Rate 5 Under the Proposal Change (% Points) Under the Proposal -1.2 -1.5 -0.4 0.3 0.8 7.5 9.7 25.1 22.7 11.6 25.4 100.0 -32.9 -6.3 -3.2 -1.8 -0.8 0.0 0.3 2.4 4.4 4.7 5.0 1.5 -32.6 -5.5 -1.2 1.2 3.5 8.4 11.4 18.0 24.0 27.1 31.7 15.6 Share of PreTax Income Percent of Total Share of PostTax Income Percent of Total Share of Federal Taxes Percent of Total 0.6 4.2 5.3 3.6 3.7 13.9 13.3 21.7 14.8 6.7 12.5 100.0 0.6 4.8 6.1 4.1 4.1 14.8 13.8 21.3 13.8 6.0 10.6 100.0 0.0 0.2 0.8 0.8 1.1 8.2 10.4 23.9 20.4 10.5 23.6 100.0 Change (% Points) -1.2 -1.7 -1.2 -0.5 -0.3 -0.7 -0.7 1.2 2.3 1.0 1.8 0.0 Baseline Distribution of Income and Federal Taxes by Cash Income Level, 2009 1 Cash Income Level (thousands of 2009 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 Units 3 Number (thousands) Percent of Total 1,934 5,637 4,482 2,158 1,699 4,598 3,174 3,335 1,043 203 99 28,390 6.8 19.9 15.8 7.6 6.0 16.2 11.2 11.8 3.7 0.7 0.4 100.0 Average Income (Dollars) 5,854 15,311 24,469 34,695 44,849 62,161 86,323 134,225 291,964 675,705 2,590,709 72,658 Average Federal Tax Burden (Dollars) 15 122 498 1,042 1,937 5,211 9,560 20,893 56,953 151,365 692,342 10,270 Average AfterTax Income 4 (Dollars) 5,839 15,189 23,971 33,653 42,912 56,949 76,763 113,332 235,010 524,340 1,898,367 62,388 Average Federal Tax Rate 5 0.3 0.8 2.0 3.0 4.3 8.4 11.1 15.6 19.5 22.4 26.7 14.1 Source: Urban-Brookings Tax Policy Center Microsimulation Model (version0309-2). Note: Elderly tax units are those with either head or spouse (if filing jointly) age 65 or older. (1) Calendar year. Baseline is current law. Proposal replaces the employer sponsored insurance deduction and self-employment health insurance deduction with a voucher to purchase private insurance. Individual voucher value depends on age and gender; the total voucher for each tax unit is the sum of each individual's voucher. Only individuals not on public insurance receive a voucher. The proposal imposes a revenue neutral comprehensive VAT at tax exclusive rate of 6.7% to finance the voucher and $500 individual cash subsidy. The VAT is distributed to labor earnings plus all capital. (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. (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.