3-Feb-06
Preliminary Results
http://www.taxpolicycenter.org
Table T06-0035
Combined Effect of EGTRRA, JGTRRA, and WFTRA With Extension of 2005 AMT Relief, Indexed for Inflation
Baseline is Pre-EGTRRA Law
Distribution of Federal Tax Change by Cash Income Class, 2007 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
3
Percent of Tax Units
With Tax
Cut
With Tax
Increase
4.4
50.3
79.6
87.6
94.2
98.1
99.2
99.5
99.5
98.8
99.1
74.3
0.1
0.5
0.3
0.1
0.1
0.0
0.0
0.0
0.1
0.2
0.2
0.2
Percent
Change in
After-Tax
4
Income
0.1
1.3
2.5
2.5
2.3
2.4
3.0
3.7
3.5
4.3
5.7
3.2
Share of
Total
Federal Tax
Change
0.0
2.0
4.8
4.9
4.5
11.0
11.3
25.3
13.0
6.1
17.1
100.0
Average Federal Tax Change
Dollars
-5
-190
-558
-751
-877
-1,240
-2,118
-3,827
-7,447
-21,209
-114,172
-1,630
Percent
-2.2
-20.3
-17.7
-12.6
-10.1
-9.4
-10.5
-10.9
-9.0
-10.1
-11.0
-10.6
Share of Federal Taxes
Change (%
Points)
0.0
-0.1
-0.2
-0.1
0.0
0.2
0.0
-0.1
0.3
0.0
-0.1
0.0
Under the
Proposal
0.2
0.9
2.6
4.0
4.7
12.6
11.4
24.6
15.7
6.5
16.6
100.0
Average Federal Tax Rate 5
Change (%
Points)
-0.1
-1.2
-2.2
-2.1
-1.9
-1.9
-2.4
-2.8
-2.5
-3.0
-3.7
-2.5
Under the
Proposal
3.9
4.8
10.1
14.4
16.8
18.6
20.0
22.4
25.3
26.8
30.4
20.8
Baseline Distribution of Income and Federal Taxes
by Cash Income Class, 2007 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)
18,336
25,141
20,692
15,679
12,242
21,460
12,836
15,976
4,220
700
362
148,223
Percent of
Total
12.4
17.0
14.0
10.6
8.3
14.5
8.7
10.8
2.9
0.5
0.2
100.0
Average
Income
(Dollars)
5,875
15,558
25,732
36,235
46,569
63,972
89,802
139,382
298,369
706,013
3,053,799
65,748
Average
Federal Tax
Burden
(Dollars)
231
934
3,145
5,950
8,685
13,144
20,093
35,006
82,915
210,230
1,042,900
15,313
Average
After-Tax
4
Income
(Dollars)
5,644
14,624
22,587
30,285
37,883
50,828
69,709
104,376
215,454
495,783
2,010,898
50,435
Average
Federal Tax
5
Rate
Share of PreTax Income
Percent of
Total
Share of PostTax Income
Percent of
Total
3.9
6.0
12.2
16.4
18.7
20.6
22.4
25.1
27.8
29.8
34.2
23.3
1.1
4.0
5.5
5.8
5.9
14.1
11.8
22.9
12.9
5.1
11.3
100.0
1.4
4.9
6.3
6.4
6.2
14.6
12.0
22.3
12.2
4.6
9.7
100.0
Share of
Federal Taxes
Percent of
Total
0.2
1.0
2.9
4.1
4.7
12.4
11.4
24.6
15.4
6.5
16.6
100.0
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0305-3A).
Number of AMT Taxpayers (millions). Baseline:
9.0
Proposal:
4.4
(1) Calendar year. Baseline is pre-EGTRRA law. Proposal includes provisions in EGTRRA, JGTRRA, and WFTRA affecting the following: 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); and estate tax exemption, rates, and state death tax credit. Provisions also include extending 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").
(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.