27-Sep-05
Preliminary Results
http://www.taxpolicycenter.org
Table T05-0272
Effect of the Child Tax Credit:
Distribution of Federal Tax Benefits by Cash Income Percentile, 2005
Cash Income
Percentile 2
Percent of Tax Units
3
Percent
Change in
After-Tax
4
Income
Share of
Total
Federal Tax
Benefit
Average Federal Tax Benefit
1
Share of Federal Taxes
With No Tax
Benefit
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
1.6
21.8
27.5
31.2
27.1
21.9
98.4
78.2
72.5
68.8
72.9
78.2
*
1.1
1.5
1.1
0.3
0.7
0.2
11.9
26.8
33.6
27.4
100.0
3
188
425
532
435
317
1.3
12.1
8.1
4.7
1.0
2.5
0.0
-0.2
-0.5
-0.4
1.1
0.0
0.4
2.2
7.7
17.4
72.1
100.0
*
-1.0
-1.2
-0.9
-0.2
-0.5
3.2
7.1
14.1
18.3
24.6
20.7
Addendum
Top 10 Percent
Top 5 Percent
Top 1 Percent
Top 0.5 Percent
Top 0.1 Percent
18.4
4.6
0.9
0.5
0.1
81.7
95.4
99.1
99.5
99.9
0.1
*
0.0
0.0
0.0
7.8
0.7
*
*
0.0
247
43
12
8
2
0.4
*
0.0
0.0
0.0
1.2
1.1
0.7
0.5
0.3
56.6
44.6
26.6
21.6
13.1
-0.1
*
0.0
0.0
0.0
26.1
27.3
29.6
30.4
31.9
Percent
Under the
Proposal
5
With Tax
Benefit
Dollars
Change (%
Points)
Average Federal Tax Rate
Change (%
Points)
Baseline Distribution of Income and Federal Taxes
by Cash Income Percentile, 2005 1
Cash Income
Percentile 2
Tax Units3
Number
(thousands)
Percent of
Total
Average
Income
(Dollars)
Average
Federal Tax
Burden
(Dollars)
Average
After-Tax
Income 3
(Dollars)
Average
Federal Tax
Rate4
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
28,340
28,910
28,916
28,916
28,914
144,573
19.6
20.0
20.0
20.0
20.0
100.0
7,487
19,134
34,409
59,726
183,278
60,566
244
1,553
5,268
11,446
45,551
12,836
7,243
17,582
29,141
48,280
137,726
47,730
3.3
8.1
15.3
19.2
24.9
21.2
2.4
6.3
11.4
19.7
60.5
100.0
3.0
7.4
12.2
20.2
57.7
100.0
0.4
2.4
8.2
17.8
71.0
100.0
Addendum
Top 10 Percent
Top 5 Percent
Top 1 Percent
Top 0.5 Percent
Top 0.1 Percent
14,457
7,228
1,446
723
145
10.0
5.0
1.0
0.5
0.1
271,934
408,681
1,126,790
1,774,411
5,136,564
71,154
111,621
333,490
539,447
1,636,697
200,780
297,059
793,300
1,234,963
3,499,867
26.2
27.3
29.6
30.4
31.9
44.9
33.7
18.6
14.7
8.5
42.1
31.1
16.6
12.9
7.3
55.4
43.5
26.0
21.0
12.8
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0305-3A).
* Less than 0.05 percent.
(1) Calendar Year. Provsion include: allowing the Child Tax Credit. Baseline is current law without the Child Tax Credit.
(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.
Under the
Proposal