24-Mar-09
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Table T09-0182
Reinstate the Top Two Rates, Limit Value of Itemized Deductions, Tax Capital Gains and Qualified Dividends at 20 Percent for High Income Tax Payers
Baseline: Administration Baseline
Small Business Tax Units
Distribution of Federal Tax Change by Cash Income Level, 2012 1
Cash Income Level
(thousands of 2009
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 With Tax Increase 3
Number
(thousands)
Percent
0.0
0.0
0.0
0.0
0.0
0.0
0.0
19.8
1,248.7
633.4
394.1
2,298.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.3
40.5
87.9
95.4
6.4
Percent Change
in After-Tax
Income 4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
-0.6
-2.7
-5.5
-1.8
Share of Total
Federal Tax
Change
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
6.3
15.0
78.6
100.0
Average Federal Tax Change
Dollars
0
0
0
0
0
0
0
4
1,390
14,219
129,820
1,896
Percent
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
1.8
7.3
12.5
5.7
Share of Federal Taxes
Change (%
Points)
0.0
0.0
0.0
-0.1
-0.1
-0.3
-0.3
-1.0
-0.7
0.2
2.3
0.0
Under the
Proposal
0.1
0.2
0.6
1.0
1.2
4.4
5.5
18.1
18.9
11.8
38.1
100.0
Average Federal Tax Rate5
Change (%
Points)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.5
2.0
3.8
1.4
Under the
Proposal
7.3
3.9
9.4
13.0
14.7
16.8
18.1
20.8
25.1
28.9
34.3
25.3
Baseline Distribution of Income and Federal Taxes
by Cash Income Level, 2012 1
Cash Income Level
(thousands of 2009
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)
Percent of
Total
2,706
3,615
3,107
2,626
2,192
5,024
4,212
7,615
3,084
721
413
35,970
7.5
10.1
8.6
7.3
6.1
14.0
11.7
21.2
8.6
2.0
1.2
100.0
Average
Income
(Dollars)
6,021
15,596
26,267
36,691
47,453
65,978
91,824
145,500
310,919
721,142
3,423,770
140,128
Average
Federal Tax
Burden
(Dollars)
437
606
2,464
4,762
6,968
11,057
16,577
30,254
76,555
194,112
1,042,995
33,505
Average AfterTax Income 4
(Dollars)
5,585
14,990
23,804
31,929
40,485
54,921
75,248
115,246
234,364
527,029
2,380,775
106,623
Average
Federal Tax
Rate 5
7.3
3.9
9.4
13.0
14.7
16.8
18.1
20.8
24.6
26.9
30.5
23.9
Share of PreTax Income
Percent of
Total
Share of PostTax Income
Percent of
Total
Share of
Federal Taxes
Percent of
Total
0.3
1.1
1.6
1.9
2.1
6.6
7.7
22.0
19.0
10.3
28.1
100.0
0.4
1.4
1.9
2.2
2.3
7.2
8.3
22.9
18.9
9.9
25.6
100.0
0.1
0.2
0.6
1.0
1.3
4.6
5.8
19.1
19.6
11.6
35.8
100.0
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0309-1).
Note: Includes all tax units reporting a net gain or loss on Schedules C, E, or F.
(1) Calendar year. Baseline is the Administration's baseline (extends all of the individual income tax provisions included in 2001 EGTRRA and 2003 JGTRRA; maintains the estate tax at its 2009 parameters; extends the 2009
AMT Patch and indexes the AMT exemption, rate bracket threshold, and phase-out exemption threshold for inflation). The proposal reinstates the top two individual income tax rates to 36 and 39.6 percent, limits the tax rate at
which itemized deductions reduce tax liability to 28 percent, and imposes a 20 percent rate on capital gains and qualified dividends for tax units with AGI above $200,000 ($250,000 for couples).
(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.