21-Mar-06
Preliminary Results
http://www.taxpolicycenter.org
Table T06-0065
Impose $10,000 Limit on Individual Income Tax Cuts in
EGTRRA, JGTRRA, and WFTRA With Extension of 2005 AMT Relief, Indexed for Inflation
Distribution of Federal Tax Change by Cash Income Percentile, 2011 1
Cash Income
Percentile2
Percent of Tax Units 3
With Tax
Cut
With Tax
Increase
Percent
Change in
After-Tax
Income4
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 5
Change (%
Points)
Under the
Proposal
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
5.2
1.0
0.0
0.0
0.0
0.0
-1.2
-0.7
0.0
0.0
0.0
0.0
100.0
100.0
0
0
0
0
2,082
416
0.0
0.0
0.0
0.0
3.7
2.6
0.0
-0.1
-0.2
-0.5
0.7
0.0
0.5
2.6
8.0
17.6
71.1
100.0
0.0
0.0
0.0
0.0
0.9
0.5
3.8
8.7
15.2
19.3
25.4
21.5
Addendum
Top 10 Percent
Top 5 Percent
Top 1 Percent
Top 0.5 Percent
Top 0.1 Percent
0.0
0.0
0.0
0.0
0.0
10.4
20.6
72.8
85.5
94.6
-1.6
-2.2
-4.0
-4.8
-5.6
100.0
100.0
97.6
90.0
59.3
4,164
8,325
40,659
74,975
247,017
4.8
6.1
10.5
12.1
13.3
1.1
1.5
1.9
1.8
1.2
55.6
43.6
26.0
21.1
12.8
1.2
1.6
2.9
3.4
3.9
26.9
28.1
30.7
31.7
33.5
Baseline Distribution of Income and Federal Taxes
by Cash Income Percentile, 2011 1
Cash Income
Percentile2
Tax Units3
Number
(thousands)
Percent of
Total
Average
Income
(Dollars)
Average
Federal Tax
Burden
(Dollars)
Average
After-Tax
Income4
(Dollars)
Average
Federal Tax
Rate5
Share of PreTax Income
Percent of
Total
Share of PostTax Income
Percent of
Total
Share of
Federal Taxes
Percent of
Total
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
30,620
31,187
31,196
31,195
31,197
155,984
19.6
20.0
20.0
20.0
20.0
100.0
9,918
24,924
43,588
75,268
230,709
76,577
378
2,157
6,639
14,552
56,559
16,078
9,540
22,767
36,949
60,716
174,150
60,499
3.8
8.7
15.2
19.3
24.5
21.0
2.5
6.5
11.4
19.7
60.3
100.0
3.1
7.5
12.2
20.1
57.6
100.0
0.5
2.7
8.3
18.1
70.4
100.0
Addendum
Top 10 Percent
Top 5 Percent
Top 1 Percent
Top 0.5 Percent
Top 0.1 Percent
15,599
7,799
1,560
780
156
10.0
5.0
1.0
0.5
0.1
341,597
511,855
1,399,560
2,196,271
6,282,917
87,592
135,566
388,886
622,031
1,858,156
254,005
376,289
1,010,674
1,574,240
4,424,761
25.6
26.5
27.8
28.3
29.6
44.6
33.4
18.3
14.3
8.2
38.0
28.1
15.1
11.8
6.6
54.5
42.2
24.2
19.3
11.6
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0305-3A).
(1) Calendar year. Baseline is extended law with the extension of 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"). Proposal
includes extending but limiting the individual income tax cuts due to the following provisions in EGTRRA, JGTRRA, and WFTRA to $10,000 (indexed for inflation after 2007): 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). The effect of these provisions is measured against a current-law baseline with the
extension of the 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.
(2) Tax units with negative cash income are excluded from the lowest quintile 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.