23‐Jun‐11
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Table T11‐0200
Replace the Mortgage Interest Deduction with a Revenue‐Neutral 21.6 Percent Non‐refundable Credit
Limit Mortgages Eligible for Credit to $500,000 on Primary Residences Only
Baseline: Current Law
1
Distribution of Federal Tax Change by Cash Income Level, 2011 Summary Table
Cash Income Level (thousands of 2011 dollars) 2
Less than 10
10‐20
20‐30
30‐40
40‐50
50‐75
75‐100
100‐200
200‐500
500‐1,000
More than 1,000
All
With Tax Cut
Pct of Tax Avg Tax Cut
Units
*
3.4
11.2
24.5
32.6
40.3
46.5
25.6
5.5
3.0
2.1
19.1
**
‐204
‐318
‐412
‐509
‐657
‐820
‐674
‐500
‐497
‐1,058
‐598
With Tax Increase
Avg Tax Pct of Tax Increase
Units
0.0
*
0.5
2.0
3.2
9.5
13.3
42.4
61.6
52.2
36.2
9.9
0
**
291
438
589
448
427
809
2,768
4,225
6,030
1,255
Percent Change in After‐Tax Income 4
Average Federal Tax Change ($)
0.0
0.1
0.2
0.3
0.4
0.4
0.5
‐0.2
‐0.7
‐0.4
‐0.1
0.0
0
‐7
‐34
‐92
‐147
‐222
‐324
170
1,678
2,192
2,158
10
Average Federal Tax Rate5
Change (% Points)
0.0
‐0.1
‐0.1
‐0.3
‐0.3
‐0.4
‐0.4
0.1
0.6
0.3
0.1
0.0
Under the Proposal
1.5
1.0
5.6
9.7
12.2
14.7
16.6
19.8
23.3
24.6
29.1
18.1
Source: Urban‐Brookings Tax Policy Center Microsimulation Model (version 0411‐2).
Number of AMT Taxpayers (millions). Baseline: 4.3 Proposal: 4.8
* Less than 0.05
** Insufficient data
(1) Calendar year. Baseline is current law. Proposal: replaces the mortgage interest deduction with a revenue‐neutral 21.6 percent non‐refundable credit; and limits mortgages eligible for the credit to $500,000 on primary residences only. We approximate the $500,000 limit on mortgages with a limit on mortgage interest eligible for the credit of $25,000. Estimates assume that individuals pay down their mortgage in response to a smaller tax benefit for mortgage interest.
(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. 23‐Jun‐11
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Table T11‐0200
Replace the Mortgage Interest Deduction with a Revenue‐Neutral 21.6 Percent Non‐refundable Credit
Limit Mortgages Eligible for Credit to $500,000 on Primary Residences Only
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income Level, 2011 1
Detail Table
Cash Income Level (thousands of 2011 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
*
3.4
11.2
24.5
32.6
40.3
46.5
25.6
5.5
3.0
2.1
19.1
0.0
*
0.5
2.0
3.2
9.5
13.3
42.4
61.6
52.2
36.2
9.9
Percent Change in After‐Tax Income 4
0.0
0.1
0.2
0.3
0.4
0.4
0.5
‐0.2
‐0.7
‐0.4
‐0.1
0.0
Average Federal Tax Change
Dollars
Percent
0
‐7
‐34
‐92
‐147
‐222
‐324
170
1,678
2,192
2,158
10
0.0
‐4.6
‐2.4
‐2.7
‐2.6
‐2.4
‐2.2
0.6
2.5
1.3
0.3
0.1
Share of Federal Taxes
Change (% Points)
0.0
0.0
0.0
‐0.1
‐0.1
‐0.2
‐0.2
0.1
0.5
0.1
0.0
0.0
Under the Proposal
0.1
0.2
1.5
3.0
3.8
9.3
10.1
26.2
18.9
7.9
18.9
100.0
Average Federal Tax Rate5
Change (% Points)
0.0
‐0.1
‐0.1
‐0.3
‐0.3
‐0.4
‐0.4
0.1
0.6
0.3
0.1
0.0
Under the Proposal
1.5
1.0
5.6
9.7
12.2
14.7
16.6
19.8
23.3
24.6
29.1
18.1
Baseline Distribution of Income and Federal Taxes
by Cash Income Level, 2011 1
Cash Income Level (thousands of 2011 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)
24,457
28,266
20,763
17,188
13,691
19,752
13,684
18,322
5,366
907
433
163,869
Percent of Total
14.9
17.3
12.7
10.5
8.4
12.1
8.4
11.2
3.3
0.6
0.3
100.0
Pre‐Tax Income
Average (dollars)
5,898
14,998
24,923
34,760
44,748
62,065
85,915
140,324
294,445
686,468
2,906,843
65,357
Federal Tax Burden
Percent of Total
Average (dollars)
Percent of Total
1.4
4.0
4.8
5.6
5.7
11.5
11.0
24.0
14.8
5.8
11.8
100.0
89
150
1,431
3,476
5,592
9,331
14,594
27,584
66,816
166,985
844,931
11,841
0.1
0.2
1.5
3.1
4.0
9.5
10.3
26.1
18.5
7.8
18.9
100.0
After‐Tax Income 4
Average (dollars)
5,810
14,848
23,492
31,284
39,156
52,734
71,320
112,739
227,628
519,484
2,061,912
53,516
Percent of Total
1.6
4.8
5.6
6.1
6.1
11.9
11.1
23.6
13.9
5.4
10.2
100.0
Average Federal Tax Rate 5
1.5
1.0
5.7
10.0
12.5
15.0
17.0
19.7
22.7
24.3
29.1
18.1
Source: Urban‐Brookings Tax Policy Center Microsimulation Model (version 0411‐2).
Number of AMT Taxpayers (millions). Baseline: 4.3 Proposal: 4.8
* Less than 0.05
(1) Calendar year. Baseline is current law. Proposal: replaces the mortgage interest deduction with a revenue‐neutral 21.6 percent non‐refundable credit; and limits mortgages eligible for the credit to $500,000 on primary residences only. We approximate the $500,000 limit on mortgages with a limit on mortgage interest eligible for the credit of $25,000. Estimates assume that individuals pay down their mortgage in response to a smaller tax benefit for mortgage interest.
(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. 23‐Jun‐11
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Table T11‐0200
Replace the Mortgage Interest Deduction with a Revenue‐Neutral 21.6 Percent Non‐refundable Credit
Limit Mortgages Eligible for Credit to $500,000 on Primary Residences Only
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income Level, 2011 1
Detail Table ‐ Single Tax Units
Cash Income Level (thousands of 2011 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
*
3.9
12.3
27.4
35.4
30.1
14.1
6.2
1.6
2.2
2.2
11.9
0.0
*
0.2
0.2
0.4
14.4
35.8
41.9
38.6
31.8
24.8
4.4
Percent Change in After‐Tax Income 4
0.0
0.1
0.2
0.3
0.4
0.2
‐0.1
‐0.4
‐0.4
‐0.3
‐0.1
0.0
Average Federal Tax Change
Dollars
Percent
0
‐8
‐39
‐101
‐159
‐75
84
394
949
1,294
1,322
‐11
0.0
‐1.2
‐1.5
‐2.1
‐2.1
‐0.6
0.5
1.3
1.3
0.8
0.1
‐0.2
Share of Federal Taxes
Change (% Points)
0.0
0.0
‐0.1
‐0.2
‐0.2
‐0.1
0.1
0.2
0.2
0.0
0.0
0.0
Under the Proposal
1.1
2.9
6.4
8.9
9.5
17.4
11.5
16.3
10.4
4.2
11.3
100.0
Average Federal Tax Rate5
Change (% Points)
0.0
‐0.1
‐0.2
‐0.3
‐0.4
‐0.1
0.1
0.3
0.3
0.2
0.0
0.0
Under the Proposal
4.8
4.7
10.1
13.4
16.9
19.1
21.4
22.2
24.2
24.9
32.8
17.2
Baseline Distribution of Income and Federal Taxes
by Cash Income Level, 2011 1
Cash Income Level (thousands of 2011 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)
19,360
19,808
12,116
8,974
5,964
7,023
2,998
2,554
679
117
54
80,235
Percent of Total
24.1
24.7
15.1
11.2
7.4
8.8
3.7
3.2
0.9
0.2
0.1
100.0
Pre‐Tax Income
Average (dollars)
5,794
14,819
24,807
34,679
44,652
61,151
84,771
135,493
298,048
680,990
2,994,162
34,300
Federal Tax Burden
Percent of Total
Average (dollars)
Percent of Total
4.1
10.7
10.9
11.3
9.7
15.6
9.2
12.6
7.4
2.9
5.9
100.0
277
705
2,549
4,756
7,689
11,751
18,045
29,705
71,047
168,174
979,397
5,895
1.1
3.0
6.5
9.0
9.7
17.5
11.4
16.0
10.2
4.2
11.3
100.0
After‐Tax Income 4
Average (dollars)
5,517
14,114
22,258
29,923
36,963
49,399
66,727
105,787
227,001
512,816
2,014,765
28,405
Percent of Total
4.7
12.3
11.8
11.8
9.7
15.2
8.8
11.9
6.8
2.6
4.8
100.0
Average Federal Tax Rate 5
4.8
4.8
10.3
13.7
17.2
19.2
21.3
21.9
23.8
24.7
32.7
17.2
Source: Urban‐Brookings Tax Policy Center Microsimulation Model (version 0411‐2).
* Less than 0.05
(1) Calendar year. Baseline is current law. Proposal: replaces the mortgage interest deduction with a revenue‐neutral 21.6 percent non‐refundable credit; and limits mortgages eligible for the credit to $500,000 on primary residences only. We approximate the $500,000 limit on mortgages with a limit on mortgage interest eligible for the credit of $25,000. Estimates assume that individuals pay down their mortgage in response to a smaller tax benefit for mortgage interest.
(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. 23‐Jun‐11
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Table T11‐0200
Replace the Mortgage Interest Deduction with a Revenue‐Neutral 21.6 Percent Non‐refundable Credit
Limit Mortgages Eligible for Credit to $500,000 on Primary Residences Only
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income Level, 2011 1
Detail Table ‐ Married Tax Units Filing Jointly
Cash Income Level (thousands of 2011 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
0.0
0.3
9.0
19.2
26.7
46.4
58.9
29.8
6.0
3.1
2.0
30.4
0.0
0.0
0.2
3.5
4.8
6.6
4.4
41.8
65.2
55.6
38.2
19.8
Percent Change in After‐Tax Income 4
0.0
0.0
0.1
0.3
0.3
0.6
0.7
‐0.1
‐0.8
‐0.5
‐0.1
‐0.1
Average Federal Tax Change
Dollars
Percent
0
0
‐31
‐90
‐133
‐323
‐493
116
1,776
2,352
2,289
61
0.0
0.0
‐32.8
‐5.5
‐4.1
‐4.3
‐3.7
0.4
2.7
1.4
0.3
0.3
Share of Federal Taxes
Change (% Points)
0.0
0.0
0.0
0.0
‐0.1
‐0.3
‐0.4
0.1
0.5
0.1
0.0
0.0
Under the Proposal
0.0
‐0.1
0.0
0.5
1.1
5.3
8.9
30.4
22.8
9.5
21.6
100.0
Average Federal Tax Rate5
Change (% Points)
0.0
0.0
‐0.1
‐0.3
‐0.3
‐0.5
‐0.6
0.1
0.6
0.3
0.1
0.1
Under the Proposal
‐2.0
‐3.3
0.3
4.4
6.8
11.5
14.9
19.3
23.1
24.6
28.5
19.5
Baseline Distribution of Income and Federal Taxes
by Cash Income Level, 2011 1
Cash Income Level (thousands of 2011 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)
1,469
2,703
3,378
3,963
4,983
9,785
9,374
15,014
4,529
760
361
56,662
Percent of Total
2.6
4.8
6.0
7.0
8.8
17.3
16.5
26.5
8.0
1.3
0.6
100.0
Pre‐Tax Income
Average (dollars)
5,327
15,680
25,178
35,096
45,043
63,042
86,496
141,559
294,076
687,868
2,827,391
122,041
Federal Tax Burden
Percent of Total
Average (dollars)
Percent of Total
0.1
0.6
1.2
2.0
3.3
8.9
11.7
30.7
19.3
7.6
14.8
100.0
‐104
‐520
93
1,650
3,206
7,570
13,370
27,219
66,190
166,914
804,129
23,791
0.0
‐0.1
0.0
0.5
1.2
5.5
9.3
30.3
22.2
9.4
21.5
100.0
After‐Tax Income 4
Average (dollars)
5,430
16,200
25,085
33,446
41,837
55,472
73,126
114,340
227,886
520,954
2,023,262
98,249
Percent of Total
0.1
0.8
1.5
2.4
3.7
9.8
12.3
30.8
18.5
7.1
13.1
100.0
Average Federal Tax Rate 5
‐2.0
‐3.3
0.4
4.7
7.1
12.0
15.5
19.2
22.5
24.3
28.4
19.5
Source: Urban‐Brookings Tax Policy Center Microsimulation Model (version 0411‐2).
* Less than 0.05
(1) Calendar year. Baseline is current law. Proposal: replaces the mortgage interest deduction with a revenue‐neutral 21.6 percent non‐refundable credit; and limits mortgages eligible for the credit to $500,000 on primary residences only. We approximate the $500,000 limit on mortgages with a limit on mortgage interest eligible for the credit of $25,000. Estimates assume that individuals pay down their mortgage in response to a smaller tax benefit for mortgage interest.
(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. 23‐Jun‐11
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Table T11‐0200
Replace the Mortgage Interest Deduction with a Revenue‐Neutral 21.6 Percent Non‐refundable Credit
Limit Mortgages Eligible for Credit to $500,000 on Primary Residences Only
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income Level, 2011 1
Detail Table ‐ Head of Household Tax Units
Cash Income Level (thousands of 2011 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
0.0
1.5
7.4
19.1
35.1
46.1
35.1
10.5
6.5
0.6
4.5
14.8
0.0
*
1.4
4.4
6.5
5.1
20.7
56.9
63.3
49.6
35.9
4.9
Percent Change in After‐Tax Income 4
0.0
0.0
0.1
0.2
0.4
0.5
0.2
‐0.4
‐1.0
‐0.4
‐0.1
0.1
Average Federal Tax Change
Dollars
Percent
0
‐2
‐20
‐60
‐148
‐270
‐112
462
2,139
1,778
2,527
‐36
0.0
0.2
3.4
‐2.9
‐2.9
‐3.0
‐0.7
1.7
3.2
1.2
0.3
‐1.1
Share of Federal Taxes
Change (% Points)
0.0
‐0.1
‐0.2
‐0.2
‐0.3
‐0.5
0.1
0.6
0.4
0.1
0.1
0.0
Under the Proposal
‐4.0
‐11.2
‐3.7
9.4
14.8
28.1
20.7
22.1
10.4
3.9
9.5
100.0
Average Federal Tax Rate5
Change (% Points)
0.0
0.0
‐0.1
‐0.2
‐0.3
‐0.4
‐0.1
0.4
0.7
0.3
0.1
‐0.1
Under the Proposal
‐13.5
‐10.6
‐2.4
5.7
11.0
14.5
17.7
21.0
23.6
23.3
29.8
9.1
Baseline Distribution of Income and Federal Taxes
by Cash Income Level, 2011 1
Cash Income Level (thousands of 2011 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)
3,465
5,465
4,876
3,748
2,382
2,528
1,092
633
120
20
9
24,414
Percent of Total
14.2
22.4
20.0
15.4
9.8
10.4
4.5
2.6
0.5
0.1
0.0
100.0
Pre‐Tax Income
Average (dollars)
6,710
15,268
25,027
34,564
44,489
60,717
84,509
131,174
289,344
662,717
2,823,081
35,432
Federal Tax Burden
Percent of Total
Average (dollars)
Percent of Total
2.7
9.6
14.1
15.0
12.3
17.7
10.7
9.6
4.0
1.5
2.9
100.0
‐908
‐1,615
‐583
2,042
5,055
9,048
15,100
27,050
66,045
152,411
837,365
3,270
‐3.9
‐11.1
‐3.6
9.6
15.1
28.7
20.7
21.5
10.0
3.8
9.3
100.0
After‐Tax Income 4
Average (dollars)
7,618
16,883
25,610
32,522
39,434
51,669
69,409
104,123
223,299
510,307
1,985,715
32,163
Percent of Total
3.4
11.8
15.9
15.5
12.0
16.6
9.7
8.4
3.4
1.3
2.3
100.0
Average Federal Tax Rate 5
‐13.5
‐10.6
‐2.3
5.9
11.4
14.9
17.9
20.6
22.8
23.0
29.7
9.2
Source: Urban‐Brookings Tax Policy Center Microsimulation Model (version 0411‐2).
* Less than 0.05
(1) Calendar year. Baseline is current law. Proposal: replaces the mortgage interest deduction with a revenue‐neutral 21.6 percent non‐refundable credit; and limits mortgages eligible for the credit to $500,000 on primary residences only. We approximate the $500,000 limit on mortgages with a limit on mortgage interest eligible for the credit of $25,000. Estimates assume that individuals pay down their mortgage in response to a smaller tax benefit for mortgage interest.
(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. 23‐Jun‐11
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Table T11‐0200
Replace the Mortgage Interest Deduction with a Revenue‐Neutral 21.6 Percent Non‐refundable Credit
Limit Mortgages Eligible for Credit to $500,000 on Primary Residences Only
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income Level, 2011 1
Detail Table ‐ Tax Units with Children
Cash Income Level (thousands of 2011 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
0.0
0.4
4.6
14.7
24.5
44.1
57.8
31.3
4.4
1.8
1.8
22.5
0.0
0.1
1.5
6.3
9.6
11.7
10.3
49.0
77.7
68.5
49.7
17.9
Percent Change in After‐Tax Income 4
0.0
0.0
0.0
0.1
0.2
0.5
0.7
‐0.2
‐1.0
‐0.6
‐0.2
‐0.1
Average Federal Tax Change
Dollars
Percent
0
0
‐8
‐29
‐78
‐257
‐467
194
2,335
3,100
3,244
97
0.0
0.0
0.6
‐2.3
‐2.0
‐3.1
‐3.4
0.7
3.4
1.8
0.4
0.6
Share of Federal Taxes
Change (% Points)
0.0
0.0
0.0
0.0
‐0.1
‐0.3
‐0.4
0.0
0.6
0.1
‐0.1
0.0
Under the Proposal
‐0.6
‐1.9
‐1.1
0.8
2.1
7.0
9.6
30.9
23.8
9.6
19.8
100.0
Average Federal Tax Rate5
Change (% Points)
0.0
0.0
0.0
‐0.1
‐0.2
‐0.4
‐0.5
0.1
0.8
0.5
0.1
0.1
Under the Proposal
‐19.7
‐16.5
‐5.6
3.5
8.6
12.9
15.4
19.6
24.0
26.1
30.0
18.0
Baseline Distribution of Income and Federal Taxes
by Cash Income Level, 2011 1
Cash Income Level (thousands of 2011 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)
3,818
5,749
5,818
5,069
4,083
6,557
5,473
8,493
2,554
404
177
48,380
Percent of Total
7.9
11.9
12.0
10.5
8.4
13.6
11.3
17.6
5.3
0.8
0.4
100.0
Pre‐Tax Income
Average (dollars)
6,240
15,486
25,108
34,703
44,647
62,489
85,937
141,033
293,197
690,964
2,823,394
87,155
Federal Tax Burden
Percent of Total
Average (dollars)
Percent of Total
0.6
2.1
3.5
4.2
4.3
9.7
11.2
28.4
17.8
6.6
11.9
100.0
‐1,227
‐2,554
‐1,407
1,232
3,914
8,285
13,676
27,388
68,150
176,982
843,372
15,551
‐0.6
‐2.0
‐1.1
0.8
2.1
7.2
10.0
30.9
23.1
9.5
19.9
100.0
After‐Tax Income 4
Average (dollars)
7,467
18,040
26,516
33,471
40,733
54,204
72,261
113,645
225,047
513,983
1,980,022
71,604
Percent of Total
0.8
3.0
4.5
4.9
4.8
10.3
11.4
27.9
16.6
6.0
10.1
100.0
Average Federal Tax Rate 5
‐19.7
‐16.5
‐5.6
3.6
8.8
13.3
15.9
19.4
23.2
25.6
29.9
17.8
Source: Urban‐Brookings Tax Policy Center Microsimulation Model (version 0411‐2).
* Less than 0.05
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 mortgage interest deduction with a revenue‐neutral 21.6 percent non‐refundable credit; and limits mortgages eligible for the credit to $500,000 on primary residences only. We approximate the $500,000 limit on mortgages with a limit on mortgage interest eligible for the credit of $25,000. Estimates assume that individuals pay down their mortgage in response to a smaller tax benefit for mortgage interest.
(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. 23‐Jun‐11
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Table T11‐0200
Replace the Mortgage Interest Deduction with a Revenue‐Neutral 21.6 Percent Non‐refundable Credit
Limit Mortgages Eligible for Credit to $500,000 on Primary Residences Only
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income Level, 2011 1
Detail Table ‐ Elderly Tax Units
Cash Income Level (thousands of 2011 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
0.0
0.2
3.9
17.2
24.9
38.6
42.5
22.8
8.3
6.9
2.6
15.4
0.0
0.0
0.0
0.1
0.1
2.4
3.7
17.1
23.7
18.9
14.1
3.1
Percent Change in After‐Tax Income 4
Average Federal Tax Change
Dollars
Percent
0
0
‐8
‐46
‐98
‐224
‐279
‐18
368
503
584
‐53
0.0
‐0.2
‐1.4
‐3.3
‐4.3
‐4.1
‐2.7
‐0.1
0.6
0.3
0.1
‐0.6
0.0
0.0
0.0
0.1
0.2
0.4
0.4
0.0
‐0.2
‐0.1
0.0
0.1
Share of Federal Taxes
Change (% Points)
0.0
0.0
0.0
0.0
‐0.1
‐0.3
‐0.2
0.1
0.2
0.1
0.2
0.0
Under the Proposal
0.1
0.3
0.8
1.5
2.0
7.8
9.2
23.7
19.7
9.1
25.9
100.0
Average Federal Tax Rate5
Change (% Points)
0.0
0.0
0.0
‐0.1
‐0.2
‐0.4
‐0.3
0.0
0.1
0.1
0.0
‐0.1
Under the Proposal
0.8
0.7
2.2
3.9
4.8
8.6
11.9
16.0
20.5
22.0
29.4
14.2
Baseline Distribution of Income and Federal Taxes
by Cash Income Level, 2011 1
Cash Income Level (thousands of 2011 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)
3,246
8,807
4,635
3,579
2,957
4,677
2,878
3,397
1,035
196
95
35,530
Percent of Total
9.1
24.8
13.0
10.1
8.3
13.2
8.1
9.6
2.9
0.6
0.3
100.0
Pre‐Tax Income
Average (dollars)
6,597
14,675
24,605
34,628
45,236
61,976
86,127
139,164
296,495
675,363
2,953,404
63,396
Federal Tax Burden
Percent of Total
Average (dollars)
Percent of Total
1.0
5.7
5.1
5.5
5.9
12.9
11.0
21.0
13.6
5.9
12.5
100.0
53
102
540
1,380
2,266
5,525
10,505
22,332
60,515
147,778
866,178
9,049
0.1
0.3
0.8
1.5
2.1
8.0
9.4
23.6
19.5
9.0
25.7
100.0
After‐Tax Income 4
Average (dollars)
6,543
14,573
24,065
33,249
42,971
56,451
75,622
116,832
235,981
527,585
2,087,226
54,347
Percent of Total
1.1
6.7
5.8
6.2
6.6
13.7
11.3
20.6
12.7
5.4
10.3
100.0
Average Federal Tax Rate 5
0.8
0.7
2.2
4.0
5.0
8.9
12.2
16.1
20.4
21.9
29.3
14.3
Source: Urban‐Brookings Tax Policy Center Microsimulation Model (version 0411‐2).
* Less than 0.05
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 mortgage interest deduction with a revenue‐neutral 21.6 percent non‐refundable credit; and limits mortgages eligible for the credit to $500,000 on primary residences only. We approximate the $500,000 limit on mortgages with a limit on mortgage interest eligible for the credit of $25,000. Estimates assume that individuals pay down their mortgage in response to a smaller tax benefit for mortgage interest.
(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.