21-Jul-10 PRELIMINARY RESULTS http://www.taxpolicycenter.org Table T10-0169 Incremental Effects of Allowing the 2001 and 2003 Tax Cuts to Sunset Restore Marriage Penalties: Standard Deduction, Bottom Tax Brackets for Couples, and EITC Phaseout Threshold Distribution of Federal Tax Change by Cash Income Percentile, 2012 1 Summary Table Percent of Tax Units4 2,3 Cash Income Percentile 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 ($) Average Federal Tax Rate6 Change (% Points) Under the Proposal 0.0 0.0 0.0 0.0 0.0 0.0 2.4 15.6 23.7 39.3 70.5 25.9 0.0 -0.2 -0.2 -0.4 -0.4 -0.3 0.5 6.7 8.1 22.0 62.7 100.0 4 58 77 251 818 193 0.0 0.2 0.2 0.3 0.3 0.3 4.9 11.4 17.2 20.2 27.0 22.3 0.0 0.0 0.0 0.0 0.0 74.2 77.6 53.4 67.5 74.5 -0.8 -0.6 -0.2 -0.1 0.0 33.5 17.1 8.9 3.2 0.4 870 904 584 806 877 0.6 0.5 0.2 0.0 0.0 23.0 23.9 26.1 32.4 35.6 Addendum 80-90 90-95 95-99 Top 1 Percent Top 0.1 Percent Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0509-5). Number of AMT Taxpayers (millions). Baseline: 3.7 Proposal: 2.9 ** This table is part of a series of tables showing the distributional effects of moving incrementally from current policy to current law. For definitions and further information, see “Related Tables: Moving Incrementally from Current Policy to Current Law” at http://taxpolicycenter.org/numbers/displayatab.cfm?template=simulation&SimID=367 (1) Calendar year. Baseline is current policy (extension of the 2001-2003 tax cuts and patching AMT using 2009 parameters indexed for inflation) plus estate tax at current law level— a 55 percent top tax rate and a $1 million exemption, not indexed); top two tax brackets raised to 36 and 39.6 percent; restoration of the personal exemption phaseout (PEP) and the limitation on itemized deductions (Pease); increased tax rates on long-term capital gains (10 percent for tax units in 15 percent bracket, 20 percent for rest) and reduced rates for gains on assets held 5 years or longer; taxation of all dividends as ordinary income; repeal of expansions of the student loan interest deduction, the Earned Income Tax Credit (EITC), the Child and Dependent Care Tax Credit (CDCTC), and the Child Tax Credit (CTC). Policy is restoration of marriage penalties by setting the standard deduction and 10 and 15 percent tax brackets for couples filing jointly to 1.67 times those for singles and making the EITC phaseout threshold for couples filing jointly the same as that for singles. (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% $19,356, 40% $37,493, 60% $65,656, 80% $111,659, 90% $161,739, 95% $226,402, 99% $599,181, 99.9% $2,727,123. (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. 21-Jul-10 PRELIMINARY RESULTS http://www.taxpolicycenter.org Table T10-0169 Incremental Effects of Allowing the 2001 and 2003 Tax Cuts to Sunset Restore Marriage Penalties: Standard Deduction, Bottom Tax Brackets for Couples, and EITC Phaseout Threshold Distribution of Federal Tax Change by Cash Income Percentile, 2012 1 Detail Table 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 0.0 0.0 0.0 0.0 0.0 0.0 2.4 15.6 23.7 39.3 70.5 25.9 0.0 -0.2 -0.2 -0.4 -0.4 -0.3 0.5 6.7 8.1 22.0 62.7 100.0 4 58 77 251 818 193 0.7 1.8 0.9 1.4 1.1 1.2 0.0 0.0 0.0 0.1 0.0 0.0 0.8 4.3 10.7 17.9 66.1 100.0 0.0 0.2 0.2 0.3 0.3 0.3 4.9 11.4 17.2 20.2 27.0 22.3 0.0 0.0 0.0 0.0 0.0 74.2 77.6 53.4 67.5 74.5 -0.8 -0.6 -0.2 -0.1 0.0 33.5 17.1 8.9 3.2 0.4 870 904 584 806 877 2.8 2.0 0.7 0.1 0.0 0.2 0.1 -0.1 -0.3 -0.2 13.9 10.1 15.7 26.4 13.4 0.6 0.5 0.2 0.0 0.0 23.0 23.9 26.1 32.4 35.6 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, 2012 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 Share of PostTax Income Share of Federal Taxes Percent of Total Percent of Total Percent of Total 38,450 34,947 31,868 26,646 23,298 157,348 24.4 22.2 20.3 16.9 14.8 100.0 11,600 28,852 52,224 88,978 280,229 76,169 562 3,230 8,901 17,704 74,929 16,773 11,038 25,622 43,323 71,273 205,300 59,395 4.9 11.2 17.0 19.9 26.7 22.0 3.7 8.4 13.9 19.8 54.5 100.0 4.5 9.6 14.8 20.3 51.2 100.0 0.8 4.3 10.8 17.9 66.1 100.0 11,720 5,734 4,655 1,190 120 7.5 3.6 3.0 0.8 0.1 138,385 196,549 345,574 1,825,188 8,367,274 30,884 46,028 89,592 590,735 2,973,782 107,501 150,520 255,983 1,234,453 5,393,492 22.3 23.4 25.9 32.4 35.5 13.5 9.4 13.4 18.1 8.4 13.5 9.2 12.8 15.7 6.9 13.7 10.0 15.8 26.6 13.5 Addendum 80-90 90-95 95-99 Top 1 Percent Top 0.1 Percent Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0509-5). Number of AMT Taxpayers (millions). Baseline: 3.7 Proposal: 2.9 (1) Calendar year. Baseline is current policy (extension of the 2001-2003 tax cuts and patching AMT using 2009 parameters indexed for inflation) plus estate tax at current law level— a 55 percent top tax rate and a $1 million exemption, not indexed); top two tax brackets raised to 36 and 39.6 percent; restoration of the personal exemption phaseout (PEP) and the limitation on itemized deductions (Pease); increased tax rates on long-term capital gains (10 percent for tax units in 15 percent bracket, 20 percent for rest) and reduced rates for gains on assets held 5 years or longer; taxation of all dividends as ordinary income; repeal of expansions of the student loan interest deduction, the Earned Income Tax Credit (EITC), the Child and Dependent Care Tax Credit (CDCTC), and the Child Tax Credit (CTC). Policy is restoration of marriage penalties by setting the standard deduction and 10 and 15 percent tax brackets for couples filing jointly to 1.67 times those for singles and making the EITC phaseout threshold for couples filing jointly the same as that for singles. (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% $19,356, 40% $37,493, 60% $65,656, 80% $111,659, 90% $161,739, 95% $226,402, 99% $599,181, 99.9% $2,727,123. (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. 21-Jul-10 PRELIMINARY RESULTS http://www.taxpolicycenter.org Table T10-0169 Incremental Effects of Allowing the 2001 and 2003 Tax Cuts to Sunset Restore Marriage Penalties: Standard Deduction, Bottom Tax Brackets for Couples, and EITC Phaseout Threshold Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2012 1 Detail Table 4 Percent of Tax Units 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 5 Income Share of Total Federal Tax Change Average Federal Tax Change Dollars Share of Federal Taxes Change (% Points) Percent Under the Proposal Average Federal Tax Rate Change (% Points) 6 Under the Proposal 0.0 0.0 0.0 0.0 0.0 0.0 5.2 18.2 20.7 34.8 54.7 25.9 -0.2 -0.3 -0.1 -0.4 -0.4 -0.3 2.2 7.4 5.5 22.6 62.3 100.0 21 69 54 229 633 193 10.1 2.7 0.7 1.5 1.0 1.2 0.0 0.1 0.0 0.1 -0.1 0.0 0.3 3.2 8.6 17.1 70.8 100.0 0.2 0.3 0.1 0.3 0.3 0.3 2.1 10.0 15.8 19.6 26.8 22.3 0.0 0.0 0.0 0.0 0.0 55.9 57.7 47.5 56.2 64.3 -0.7 -0.5 -0.3 -0.1 0.0 32.0 16.6 10.6 3.2 0.4 648 668 540 670 753 2.5 1.7 0.7 0.1 0.0 0.2 0.1 -0.1 -0.3 -0.2 15.1 11.3 17.0 27.4 13.9 0.6 0.4 0.2 0.0 0.0 22.8 24.0 25.9 32.2 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 Adjusted for Family Size, 2012 1 4 Tax Units 2,3 Cash Income Percentile 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 After5 Tax Income (Dollars) Average Federal Tax 6 Rate Share of PreTax Income Percent of Total Share of PostTax Income Percent of Total Share of Federal Taxes Percent of Total 31,706 32,349 31,237 29,980 29,936 157,348 20.2 20.6 19.9 19.1 19.0 100.0 10,935 26,208 46,322 77,565 235,547 76,169 206 2,539 7,274 14,984 62,482 16,773 10,729 23,669 39,048 62,581 173,066 59,395 1.9 9.7 15.7 19.3 26.5 22.0 2.9 7.1 12.1 19.4 58.8 100.0 3.6 8.2 13.1 20.1 55.4 100.0 0.3 3.1 8.6 17.0 70.9 100.0 15,019 7,540 5,940 1,436 142 9.6 4.8 3.8 0.9 0.1 117,658 167,170 294,212 1,584,726 7,360,192 26,177 39,369 75,653 509,009 2,595,251 91,481 127,801 218,559 1,075,717 4,764,942 22.3 23.6 25.7 32.1 35.3 14.7 10.5 14.6 19.0 8.7 14.7 10.3 13.9 16.5 7.3 14.9 11.3 17.0 27.7 14.0 Addendum 80-90 90-95 95-99 Top 1 Percent Top 0.1 Percent Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0509-5). Number of AMT Taxpayers (millions). Baseline: 3.7 Proposal: 2.9 (1) Calendar year. Baseline is current policy (extension of the 2001-2003 tax cuts and patching AMT using 2009 parameters indexed for inflation) plus estate tax at current law level— a 55 percent top tax rate and a $1 million exemption, not indexed); top two tax brackets raised to 36 and 39.6 percent; restoration of the personal exemption phaseout (PEP) and the limitation on itemized deductions (Pease); increased tax rates on long-term capital gains (10 percent for tax units in 15 percent bracket, 20 percent for rest) and reduced rates for gains on assets held 5 years or longer; taxation of all dividends as ordinary income; repeal of expansions of the student loan interest deduction, the Earned Income Tax Credit (EITC), the Child and Dependent Care Tax Credit (CDCTC), and the Child Tax Credit (CTC). Policy is restoration of marriage penalties by setting the standard deduction and 10 and 15 percent tax brackets for couples filing jointly to 1.67 times those for singles and making the EITC phaseout threshold for couples filing jointly the same as that for singles. (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 incomes used are adjusted for family size by dividing by the square root of the number of people in the tax unit. The resulting percentile breaks are (in 2009 dollars): 20% $13,219, 40% $24,782, 60% $41,864, 80% $68,188, 90% $97,830, 95% $138,709, 99% $361,983, 99.9% $1,670,467. (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. 21-Jul-10 PRELIMINARY RESULTS http://www.taxpolicycenter.org Table T10-0169 Incremental Effects of Allowing the 2001 and 2003 Tax Cuts to Sunset Restore Marriage Penalties: Standard Deduction, Bottom Tax Brackets for Couples, and EITC Phaseout Threshold Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 20121 Detail Table - Single 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 Share of Federal Taxes Change (% Points) Percent Under the Proposal Average Federal Tax Rate6 Change (% Points) Under the Proposal 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -2.0 0.6 -22.3 19.5 100.0 100.0 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.5 5.1 12.4 20.5 60.4 100.0 0.0 0.0 0.0 0.0 0.0 0.0 7.2 10.9 17.2 21.1 27.6 22.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 14.1 -19.5 -9.4 12.5 3.1 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 15.4 10.8 14.5 19.8 9.5 0.0 0.0 0.0 0.0 0.0 24.0 25.3 26.3 34.3 38.1 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 Adjusted for Family Size, 2012 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 16,972 15,474 14,005 11,543 9,596 68,932 24.6 22.5 20.3 16.8 13.9 100.0 8,380 19,970 34,261 55,833 151,979 43,878 603 2,168 5,882 11,793 41,872 9,646 7,777 17,802 28,379 44,040 110,107 34,232 5,066 2,373 1,795 361 32 7.4 3.4 2.6 0.5 0.1 84,037 119,032 204,548 1,060,631 5,243,107 20,196 30,126 53,845 363,728 1,996,644 63,841 88,906 150,703 696,903 3,246,463 Share of PreTax Income Share of PostTax Income Share of Federal Taxes Percent of Total Percent of Total Percent of Total 7.2 10.9 17.2 21.1 27.6 22.0 4.7 10.2 15.9 21.3 48.2 100.0 5.6 11.7 16.8 21.5 44.8 100.0 1.5 5.1 12.4 20.5 60.4 100.0 24.0 25.3 26.3 34.3 38.1 14.1 9.3 12.1 12.7 5.5 13.7 8.9 11.5 10.7 4.4 15.4 10.8 14.5 19.8 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 0509-5). (1) Calendar year. Baseline is current policy (extension of the 2001-2003 tax cuts and patching AMT using 2009 parameters indexed for inflation) plus estate tax at current law level— a 55 percent top tax rate and a $1 million exemption, not indexed); top two tax brackets raised to 36 and 39.6 percent; restoration of the personal exemption phaseout (PEP) and the limitation on itemized deductions (Pease); increased tax rates on long-term capital gains (10 percent for tax units in 15 percent bracket, 20 percent for rest) and reduced rates for gains on assets held 5 years or longer; taxation of all dividends as ordinary income; repeal of expansions of the student loan interest deduction, the Earned Income Tax Credit (EITC), the Child and Dependent Care Tax Credit (CDCTC), and the Child Tax Credit (CTC). Policy is restoration of marriage penalties by setting the standard deduction and 10 and 15 percent tax brackets for couples filing jointly to 1.67 times those for singles and making the EITC phaseout threshold for couples filing jointly the same as that for singles. (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 incomes used are adjusted for family size by dividing by the square root of the number of people in the tax unit. The resulting percentile breaks are (in 2009 dollars): 20% $13,219, 40% $24,782, 60% $41,864, 80% $68,188, 90% $97,830, 95% $138,709, 99% $361,983, 99.9% $1,670,467. (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. 21-Jul-10 PRELIMINARY RESULTS http://www.taxpolicycenter.org Table T10-0169 Incremental Effects of Allowing the 2001 and 2003 Tax Cuts to Sunset Restore Marriage Penalties: Standard Deduction, Bottom Tax Brackets for Couples, and EITC Phaseout Threshold Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 20121 Detail Table - Married Tax Units Filing Jointly 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 Share of Federal Taxes Change (% Points) Percent Under the Proposal Average Federal Tax Rate6 Change (% Points) Under the Proposal 0.0 0.0 0.0 0.0 0.0 0.0 23.2 61.9 52.5 66.1 85.9 63.6 -0.7 -0.8 -0.3 -0.6 -0.5 -0.5 2.2 7.4 5.3 22.1 62.9 100.0 99 245 138 438 1,005 484 30.1 7.9 1.6 2.5 1.4 1.7 0.0 0.1 0.0 0.1 -0.3 0.0 0.2 1.7 5.6 14.9 77.6 100.0 0.7 0.7 0.2 0.5 0.4 0.4 2.9 10.0 14.6 18.8 26.6 23.2 0.0 0.0 0.0 0.0 0.0 91.9 88.4 71.3 77.7 85.0 -1.0 -0.7 -0.3 -0.1 0.0 32.2 16.8 10.7 3.2 0.4 1,080 1,031 818 938 1,020 3.6 2.3 1.0 0.2 0.0 0.3 0.1 -0.1 -0.5 -0.3 15.2 12.2 18.9 31.3 15.6 0.8 0.5 0.2 0.1 0.0 22.3 23.5 25.8 31.6 34.7 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 Adjusted for Family Size, 2012 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 6,622 8,956 11,470 15,032 18,609 61,357 10.8 14.6 18.7 24.5 30.3 100.0 14,526 33,405 59,671 95,023 281,842 126,020 328 3,110 8,557 17,408 73,886 28,804 14,198 30,295 51,114 77,615 207,956 97,216 8,860 4,843 3,890 1,015 102 14.4 7.9 6.3 1.7 0.2 138,312 192,091 337,723 1,748,464 7,890,377 29,809 44,182 86,400 552,299 2,737,994 108,503 147,908 251,323 1,196,165 5,152,384 Share of PreTax Income Share of PostTax Income Share of Federal Taxes Percent of Total Percent of Total Percent of Total 2.3 9.3 14.3 18.3 26.2 22.9 1.2 3.9 8.9 18.5 67.8 100.0 1.6 4.6 9.8 19.6 64.9 100.0 0.1 1.6 5.6 14.8 77.8 100.0 21.6 23.0 25.6 31.6 34.7 15.9 12.0 17.0 23.0 10.5 16.1 12.0 16.4 20.4 8.8 14.9 12.1 19.0 31.7 15.9 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 0509-5). (1) Calendar year. Baseline is current policy (extension of the 2001-2003 tax cuts and patching AMT using 2009 parameters indexed for inflation) plus estate tax at current law level— a 55 percent top tax rate and a $1 million exemption, not indexed); top two tax brackets raised to 36 and 39.6 percent; restoration of the personal exemption phaseout (PEP) and the limitation on itemized deductions (Pease); increased tax rates on long-term capital gains (10 percent for tax units in 15 percent bracket, 20 percent for rest) and reduced rates for gains on assets held 5 years or longer; taxation of all dividends as ordinary income; repeal of expansions of the student loan interest deduction, the Earned Income Tax Credit (EITC), the Child and Dependent Care Tax Credit (CDCTC), and the Child Tax Credit (CTC). Policy is restoration of marriage penalties by setting the standard deduction and 10 and 15 percent tax brackets for couples filing jointly to 1.67 times those for singles and making the EITC phaseout threshold for couples filing jointly the same as that for singles. (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 incomes used are adjusted for family size by dividing by the square root of the number of people in the tax unit. The resulting percentile breaks are (in 2009 dollars): 20% $13,219, 40% $24,782, 60% $41,864, 80% $68,188, 90% $97,830, 95% $138,709, 99% $361,983, 99.9% $1,670,467. (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. 21-Jul-10 PRELIMINARY RESULTS http://www.taxpolicycenter.org Table T10-0169 Incremental Effects of Allowing the 2001 and 2003 Tax Cuts to Sunset Restore Marriage Penalties: Standard Deduction, Bottom Tax Brackets for Couples, and EITC Phaseout Threshold Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 20121 Detail Table - Head of Household 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 Share of Federal Taxes Change (% Points) Percent Under the Proposal Average Federal Tax Rate6 Change (% Points) Under the Proposal 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.7 10.1 18.0 7.6 -15.8 100.0 0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -4.0 12.4 27.1 28.0 36.5 100.0 0.0 0.0 0.0 0.0 0.0 0.0 -5.9 8.3 16.2 20.1 25.3 15.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.4 0.4 5.8 0.0 2.0 0 0 0 0 0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 13.6 5.5 7.5 9.9 4.6 0.0 0.0 0.0 0.0 0.0 23.0 23.6 24.1 32.2 35.2 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 Adjusted for Family Size, 2012 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 7,840 7,497 5,095 2,777 1,242 24,547 31.9 30.5 20.8 11.3 5.1 100.0 13,490 30,617 50,275 76,881 178,521 41,760 -789 2,545 8,160 15,476 45,086 6,255 14,279 28,072 42,115 61,405 133,435 35,505 805 232 173 33 3 3.3 0.9 0.7 0.1 0.0 112,763 154,893 278,418 1,423,600 6,950,503 25,909 36,474 67,053 457,664 2,446,863 86,854 118,419 211,365 965,936 4,503,640 Share of PreTax Income Share of PostTax Income Share of Federal Taxes Percent of Total Percent of Total Percent of Total -5.9 8.3 16.2 20.1 25.3 15.0 10.3 22.4 25.0 20.8 21.6 100.0 12.8 24.2 24.6 19.6 19.0 100.0 -4.0 12.4 27.1 28.0 36.5 100.0 23.0 23.6 24.1 32.2 35.2 8.9 3.5 4.7 4.6 2.0 8.0 3.2 4.2 3.7 1.5 13.6 5.5 7.5 9.9 4.6 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 0509-5). (1) Calendar year. Baseline is current policy (extension of the 2001-2003 tax cuts and patching AMT using 2009 parameters indexed for inflation) plus estate tax at current law level— a 55 percent top tax rate and a $1 million exemption, not indexed); top two tax brackets raised to 36 and 39.6 percent; restoration of the personal exemption phaseout (PEP) and the limitation on itemized deductions (Pease); increased tax rates on long-term capital gains (10 percent for tax units in 15 percent bracket, 20 percent for rest) and reduced rates for gains on assets held 5 years or longer; taxation of all dividends as ordinary income; repeal of expansions of the student loan interest deduction, the Earned Income Tax Credit (EITC), the Child and Dependent Care Tax Credit (CDCTC), and the Child Tax Credit (CTC). Policy is restoration of marriage penalties by setting the standard deduction and 10 and 15 percent tax brackets for couples filing jointly to 1.67 times those for singles and making the EITC phaseout threshold for couples filing jointly the same as that for singles. (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 incomes used are adjusted for family size by dividing by the square root of the number of people in the tax unit. The resulting percentile breaks are (in 2009 dollars): 20% $13,219, 40% $24,782, 60% $41,864, 80% $68,188, 90% $97,830, 95% $138,709, 99% $361,983, 99.9% $1,670,467. (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. 21-Jul-10 PRELIMINARY RESULTS http://www.taxpolicycenter.org Table T10-0169 Incremental Effects of Allowing the 2001 and 2003 Tax Cuts to Sunset Restore Marriage Penalties: Standard Deduction, Bottom Tax Brackets for Couples, and EITC Phaseout Threshold Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2012 1 Detail Table - Tax Units with Children 4 Percent of Tax Units 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 5 Income Share of Total Federal Tax Change Average Federal Tax Change Dollars Share of Federal Taxes Change (% Points) Percent Under the Proposal Average Federal Tax Rate Change (% Points) 6 Under the Proposal 0.0 0.0 0.0 0.0 0.0 0.0 11.5 31.6 31.3 51.7 73.7 38.3 -0.4 -0.5 -0.2 -0.6 -0.4 -0.4 4.1 12.1 6.4 30.2 47.3 100.0 59 171 91 452 836 299 -5.7 5.7 0.9 2.2 1.0 1.4 0.1 0.1 -0.1 0.2 -0.3 0.0 -0.9 3.2 10.3 19.9 67.5 100.0 0.4 0.5 0.2 0.4 0.3 0.3 -6.6 9.2 16.8 20.5 27.7 22.2 0.0 0.0 0.0 0.0 0.0 81.6 72.0 51.9 80.2 85.7 -0.8 -0.5 -0.2 -0.1 0.0 28.4 10.5 6.0 2.4 0.3 949 779 560 957 1,011 2.6 1.4 0.5 0.1 0.0 0.2 0.0 -0.2 -0.3 -0.2 15.6 10.4 16.3 25.2 12.1 0.6 0.4 0.1 0.1 0.0 23.5 24.4 27.2 33.6 35.7 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 Adjusted for Family Size, 2012 1 4 Tax Units 2,3 Cash Income Percentile Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Top Quintile All Average Income (Dollars) Average Federal Tax Burden (Dollars) Average After5 Tax Income (Dollars) Number (thousands) Percent of Total 10,133 10,359 10,251 9,800 8,315 49,155 20.6 21.1 20.9 19.9 16.9 100.0 14,723 34,672 62,298 103,142 306,063 95,419 -1,027 3,027 10,370 20,723 83,803 20,923 15,750 31,646 51,928 82,418 222,260 74,496 4,398 1,976 1,567 374 36 9.0 4.0 3.2 0.8 0.1 157,496 224,546 400,356 2,088,455 9,839,694 36,016 54,000 108,142 701,160 3,515,091 121,480 170,546 292,214 1,387,295 6,324,603 Share of PreTax Income Percent of Total Share of PostTax Income Percent of Total Share of Federal Taxes Percent of Total -7.0 8.7 16.7 20.1 27.4 21.9 3.2 7.7 13.6 21.6 54.3 100.0 4.4 9.0 14.5 22.1 50.5 100.0 -1.0 3.1 10.3 19.8 67.8 100.0 22.9 24.1 27.0 33.6 35.7 14.8 9.5 13.4 16.7 7.6 14.6 9.2 12.5 14.2 6.2 15.4 10.4 16.5 25.5 12.3 Average Federal Tax 6 Rate Addendum 80-90 90-95 95-99 Top 1 Percent Top 0.1 Percent Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0509-5). Note: Tax units with children are those claiming an exemption for children at home or away from home. (1) Calendar year. Baseline is current policy (extension of the 2001-2003 tax cuts and patching AMT using 2009 parameters indexed for inflation) plus estate tax at current law level— a 55 percent top tax rate and a $1 million exemption, not indexed); top two tax brackets raised to 36 and 39.6 percent; restoration of the personal exemption phaseout (PEP) and the limitation on itemized deductions (Pease); increased tax rates on long-term capital gains (10 percent for tax units in 15 percent bracket, 20 percent for rest) and reduced rates for gains on assets held 5 years or longer; taxation of all dividends as ordinary income; repeal of expansions of the student loan interest deduction, the Earned Income Tax Credit (EITC), the Child and Dependent Care Tax Credit (CDCTC), and the Child Tax Credit (CTC). Policy is restoration of marriage penalties by setting the standard deduction and 10 and 15 percent tax brackets for couples filing jointly to 1.67 times those for singles and making the EITC phaseout threshold for couples filing jointly the same as that for singles. (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 incomes used are adjusted for family size by dividing by the square root of the number of people in the tax unit. The resulting percentile breaks are (in 2009 dollars): 20% $13,219, 40% $24,782, 60% $41,864, 80% $68,188, 90% $97,830, 95% $138,709, 99% $361,983, 99.9% $1,670,467. (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. 21-Jul-10 PRELIMINARY RESULTS http://www.taxpolicycenter.org Table T10-0169 Incremental Effects of Allowing the 2001 and 2003 Tax Cuts to Sunset Restore Marriage Penalties: Standard Deduction, Bottom Tax Brackets for Couples, and EITC Phaseout Threshold Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2012 1 Detail Table - Elderly Tax Units 4 Percent of Tax Units 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 5 Income Share of Total Federal Tax Change Average Federal Tax Change Dollars Share of Federal Taxes Change (% Points) Percent Under the Proposal Average Federal Tax Rate Change (% Points) 6 Under the Proposal 0.0 0.0 0.0 0.0 0.0 0.0 1.3 13.0 19.2 41.0 52.7 24.5 0.0 -0.1 -0.1 -0.3 -0.3 -0.3 0.4 4.3 4.9 17.2 73.1 100.0 4 26 41 154 639 161 1.5 2.9 1.6 1.9 1.0 1.1 0.0 0.0 0.0 0.1 -0.1 0.0 0.3 1.7 3.5 10.2 84.2 100.0 0.0 0.1 0.1 0.2 0.3 0.2 2.6 4.0 6.3 11.8 26.0 19.3 0.0 0.0 0.0 0.0 0.0 53.2 57.7 50.1 43.3 59.2 -0.7 -0.6 -0.3 -0.1 0.0 31.3 19.9 17.3 4.6 0.6 634 716 609 525 698 3.6 2.4 0.9 0.1 0.0 0.2 0.1 0.0 -0.4 -0.2 10.1 9.5 20.6 44.1 22.2 0.6 0.5 0.2 0.0 0.0 17.5 20.3 24.6 32.4 35.8 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 Adjusted for Family Size, 2012 1 4 Tax Units 2,3 Cash Income Percentile Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Top Quintile All Average Income (Dollars) Average Federal Tax Burden (Dollars) Average After5 Tax Income (Dollars) Number (thousands) Percent of Total 5,016 8,213 5,981 5,495 5,617 30,543 16.4 26.9 19.6 18.0 18.4 100.0 10,899 22,528 41,094 70,238 257,048 75,737 277 877 2,552 8,142 66,185 14,429 10,622 21,651 38,542 62,096 190,863 61,309 2,427 1,362 1,394 434 42 8.0 4.5 4.6 1.4 0.1 105,444 153,103 267,882 1,396,961 6,520,091 17,817 30,409 65,258 452,163 2,334,771 87,627 122,693 202,624 944,798 4,185,320 Share of PreTax Income Percent of Total Share of PostTax Income Percent of Total Share of Federal Taxes Percent of Total 2.5 3.9 6.2 11.6 25.8 19.1 2.4 8.0 10.6 16.7 62.4 100.0 2.9 9.5 12.3 18.2 57.3 100.0 0.3 1.6 3.5 10.2 84.4 100.0 16.9 19.9 24.4 32.4 35.8 11.1 9.0 16.1 26.2 12.0 11.4 8.9 15.1 21.9 9.5 9.8 9.4 20.6 44.5 22.5 Average Federal Tax 6 Rate Addendum 80-90 90-95 95-99 Top 1 Percent Top 0.1 Percent Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0509-5). Note: Elderly tax units are those with either head or spouse (if filing jointly) age 65 or older. (1) Calendar year. Baseline is current policy (extension of the 2001-2003 tax cuts and patching AMT using 2009 parameters indexed for inflation) plus estate tax at current law level— a 55 percent top tax rate and a $1 million exemption, not indexed); top two tax brackets raised to 36 and 39.6 percent; restoration of the personal exemption phaseout (PEP) and the limitation on itemized deductions (Pease); increased tax rates on long-term capital gains (10 percent for tax units in 15 percent bracket, 20 percent for rest) and reduced rates for gains on assets held 5 years or longer; taxation of all dividends as ordinary income; repeal of expansions of the student loan interest deduction, the Earned Income Tax Credit (EITC), the Child and Dependent Care Tax Credit (CDCTC), and the Child Tax Credit (CTC). Policy is restoration of marriage penalties by setting the standard deduction and 10 and 15 percent tax brackets for couples filing jointly to 1.67 times those for singles and making the EITC phaseout threshold for couples filing jointly the same as that for singles. (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 incomes used are adjusted for family size by dividing by the square root of the number of people in the tax unit. The resulting percentile breaks are (in 2009 dollars): 20% $13,219, 40% $24,782, 60% $41,864, 80% $68,188, 90% $97,830, 95% $138,709, 99% $361,983, 99.9% $1,670,467. (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.