27-Sep-05
Preliminary Results
http://www.taxpolicycenter.org
Table T05-0271
Effect of the Child Tax Credit:
Distribution of Federal Tax Benefits by Cash Income Class, 2005
Cash Income Class
(thousands of 2005
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
3
Percent of Tax Units
With Tax
Benefit
With No Tax
Benefit
0.2
14.4
26.2
27.7
27.4
31.8
35.0
29.9
1.9
0.7
0.4
21.9
99.9
85.6
73.8
72.3
72.6
68.2
65.0
70.2
98.1
99.3
99.6
78.2
Percent
Change in
After-Tax
4
Income
*
0.6
1.5
1.5
1.2
1.1
0.9
0.4
*
0.0
0.0
0.7
Share of
Total
Federal Tax
Benefit
0.1
4.5
14.4
14.6
11.7
24.6
15.8
14.2
0.2
*
0.0
100.0
Average Federal Tax Benefit
Dollars
1
80
330
437
457
543
605
450
24
11
5
317
Percent
0.7
10.2
11.8
8.1
5.8
4.6
3.4
1.5
*
*
0.0
2.5
1
Share of Federal Taxes
Change (%
Points)
0.0
-0.1
-0.3
-0.3
-0.2
-0.3
-0.1
0.2
0.4
0.2
0.4
0.0
Under the
Proposal
0.2
1.0
2.7
4.2
4.8
12.9
11.3
23.7
15.3
6.6
17.0
100.0
Average Federal Tax
5
Rate
Change (% Under the
Proposal
Points)
*
-0.5
-1.3
-1.3
-1.0
-0.9
-0.7
-0.3
*
0.0
0.0
-0.5
Baseline Distribution of Income and Federal Taxes
by Cash Income Class, 2005 1
Cash Income Class
(thousands of 2005
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
Tax Units3
Number
(thousands)
19,560
25,611
19,953
15,289
11,738
20,700
11,936
14,432
3,797
642
335
144,573
Percent of
Total
13.5
17.7
13.8
10.6
8.1
14.3
8.3
10.0
2.6
0.4
0.2
100.0
Average
Income
(Dollars)
5,618
14,885
24,715
34,863
44,824
61,482
86,246
133,489
287,471
678,426
2,943,745
60,566
Average
Federal Tax
Burden
(Dollars)
201
779
2,796
5,422
7,911
11,829
17,796
30,172
72,934
184,653
919,717
12,836
Average
After-Tax
3
Income
(Dollars)
5,416
14,105
21,919
29,442
36,912
49,653
68,450
103,316
214,537
493,772
2,024,027
47,730
Average
Federal Tax
4
Rate
Share of PreTax Income
Percent of
Total
Share of PostTax Income
Percent of
Total
Share of
Federal Taxes
Percent of
Total
3.6
5.2
11.3
15.6
17.7
19.2
20.6
22.6
25.4
27.2
31.2
21.2
1.3
4.4
5.6
6.1
6.0
14.5
11.8
22.0
12.5
5.0
11.3
100.0
1.5
5.2
6.3
6.5
6.3
14.9
11.8
21.6
11.8
4.6
9.8
100.0
0.2
1.1
3.0
4.5
5.0
13.2
11.5
23.5
14.9
6.4
16.6
100.0
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 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. 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.
3.6
4.7
10.0
14.3
16.6
18.4
19.9
22.3
25.4
27.2
31.2
20.7