10‐Jun‐11
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Click on PDF or Excel link above for additional tables containing more detail and breakdowns by filing status and demographic groups.
Table T11‐0170
TPC Interpretation of Governor Tim Pawlenty's Tax Proposal Outline
Baseline: Current Policy
Distribution of Federal Tax Change by Cash Income Level, 2013 1
Summary Table
Percent of Tax Units 3
Cash Income Level (thousands of 2011 2
dollars) With Tax Cut
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
12.4
17.8
52.2
71.0
81.7
94.1
98.4
99.6
99.8
99.8
100.0
63.6
With Tax Increase
0.1
0.2
0.4
0.6
0.7
0.6
0.3
0.1
0.1
*
*
0.3
Percent Change in After‐Tax Income 0.3
0.2
0.7
1.3
1.7
3.0
3.7
5.4
9.0
14.2
24.1
7.1
4
Share of Total Federal Tax Change
0.1
0.1
0.5
1.0
1.4
5.3
5.7
18.1
17.9
11.2
38.6
100.0
Average Federal Tax Change ($)
‐17
‐32
‐153
‐399
‐686
‐1,575
‐2,640
‐5,869
‐19,995
‐72,487
‐489,956
‐4,078
Average Federal Tax Rate
5
Change (% Points)
Under the Proposal
‐0.3
‐0.2
‐0.6
‐1.1
‐1.5
‐2.5
‐3.0
‐4.2
‐6.8
‐10.4
‐16.2
‐5.6
2.3
1.7
6.4
10.4
12.8
14.4
16.0
17.4
17.6
16.3
16.8
15.1
Source: Urban‐Brookings Tax Policy Center Microsimulation Model (version 0411‐2).
Number of AMT Taxpayers (millions). Baseline: 4.5 Proposal: 0.0
* Less than 0.05
(1) Baseline is current policy, which assumes extension of all temporary provisions in place for 2011 with the exception of the payroll tax cut and indexes the AMT exemption level after 2011. Proposal would: (a) repeal individual alternative minimum tax; (b) impose rate of 10 percent on first $50,000 of taxable income ($100,000 for married couples filing a joint return) and 25 percent on amounts above that threshold, indexed for inflation after 2011; (c) exclude interest income, dividends, and gains from sales of capital assets from gross income; (d) repeal deduction for investment interest; (e) repeal 3.8 percent additional Medicare tax on investment income; (f) impose an alternative tax rate of 15 percent on sole proprietor, farm, partnership, S corporation, and rental income; (g) repeal the estate tax; and (h) reduce the corporate tax rate to 15 percent. Governor Pawlenty has not specified which corporate tax expenditures he would eliminate; our estimates assume the same base broadeners as in the Bipartisan Policy Center's tax reform proposal (Rivlin/Domenici). Effective date: 01/01/13.
(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. TPC estimates are based on Governor Pawlenty's description of his tax proposal and subsequent remarks to the New York Times by his spokesperson Alex Conant. Because Governor Pawlenty did not specify which corporate tax expenditures he would eliminate, we provide an illustrative option that broadens the corporate tax base by eliminating the tax expenditures included in the Bipartisan Policy Center's Rivlin‐Domenici plan. Based on remarks by the Governor and Alex Conant, we did not eliminate any individual income tax expenditures. If Governor Pawlenty or his campaign staff provide the Tax Policy Center with additional details on his proposal we will re‐estimate his plan. 10‐Jun‐11
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Table T11‐0170
TPC Interpretation of Governor Tim Pawlenty's Tax Proposal Outline
Baseline: Current Policy
1
Distribution of Federal Tax Change by Cash Income Level, 2013 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
12.4
17.8
52.2
71.0
81.7
94.1
98.4
99.6
99.8
99.8
100.0
63.6
0.1
0.2
0.4
0.6
0.7
0.6
0.3
0.1
0.1
*
*
0.3
Percent Change in After‐Tax Income 4
0.3
0.2
0.7
1.3
1.7
3.0
3.7
5.4
9.0
14.2
24.1
7.1
Share of Total Federal Tax Change
0.1
0.1
0.5
1.0
1.4
5.3
5.7
18.1
17.9
11.2
38.6
100.0
Average Federal Tax Change
Dollars
Percent
‐17
‐32
‐153
‐399
‐686
‐1,575
‐2,640
‐5,869
‐19,995
‐72,487
‐489,956
‐4,078
‐11.1
‐11.4
‐8.5
‐9.7
‐10.4
‐14.8
‐15.6
‐19.5
‐28.0
‐39.0
‐49.1
‐27.2
Share of Federal Taxes
Change (% Points)
0.0
0.1
0.4
0.7
0.8
1.7
1.6
2.7
‐0.2
‐1.3
‐6.4
0.0
Average Federal Tax Rate 5
Under the Proposal
Change (% Points)
0.2
0.4
1.8
3.5
4.3
11.4
11.5
28.0
17.3
6.6
15.0
100.0
‐0.3
‐0.2
‐0.6
‐1.1
‐1.5
‐2.5
‐3.0
‐4.2
‐6.8
‐10.4
‐16.2
‐5.6
Under the Proposal
2.3
1.7
6.4
10.4
12.8
14.4
16.0
17.4
17.6
16.3
16.8
15.1
Baseline Distribution of Income and Federal Taxes
1
by Cash Income Level, 2013 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)
21,065
27,359
20,377
16,959
13,305
22,765
14,636
20,881
6,084
1,051
534
166,272
Percent of Total
12.7
16.5
12.3
10.2
8.0
13.7
8.8
12.6
3.7
0.6
0.3
100.0
Pre‐Tax Income
Average (dollars)
5,766
15,205
25,480
35,896
46,141
63,142
89,268
139,817
292,655
696,116
3,032,367
72,381
Federal Tax Burden
Percent of Total
Average (dollars)
Percent of Total
1.0
3.5
4.3
5.1
5.1
11.9
10.9
24.3
14.8
6.1
13.5
100.0
151
285
1,789
4,119
6,574
10,674
16,900
30,150
71,406
185,705
997,919
14,984
0.1
0.3
1.5
2.8
3.5
9.8
9.9
25.3
17.4
7.8
21.4
100.0
After‐Tax Income 4
Average (dollars)
5,615
14,919
23,691
31,777
39,567
52,468
72,368
109,667
221,249
510,411
2,034,448
57,397
Percent of Total
1.2
4.3
5.1
5.7
5.5
12.5
11.1
24.0
14.1
5.6
11.4
100.0
Average Federal Tax Rate 5
2.6
1.9
7.0
11.5
14.3
16.9
18.9
21.6
24.4
26.7
32.9
20.7
Source: Urban‐Brookings Tax Policy Center Microsimulation Model (version 0411‐2).
Number of AMT Taxpayers (millions). Baseline: 4.5 Proposal: 0.0
* Less than 0.05
(1) Baseline is current policy, which assumes extension of all temporary provisions in place for 2011 with the exception of the payroll tax cut and indexes the AMT exemption level after 2011. Proposal would: (a) repeal individual alternative minimum tax; (b) impose rate of 10 percent on first $50,000 of taxable income ($100,000 for married couples filing a joint return) and 25 percent on amounts above that threshold, indexed for inflation after 2011; (c) exclude interest income, dividends, and gains from sales of capital assets from gross income; (d) repeal deduction for investment interest; (e) repeal 3.8 percent additional Medicare tax on investment income; (f) impose an alternative tax rate of 15 percent on sole proprietor, farm, partnership, S corporation, and rental income; (g) repeal the estate tax; and (h) reduce the corporate tax rate to 15 percent. Governor Pawlenty has not specified which corporate tax expenditures he would eliminate; our estimates assume the same base broadeners as in the Bipartisan Policy Center's tax reform proposal (Rivlin/Domenici). Effective date: 01/01/13.
(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. 10‐Jun‐11
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Table T11‐0170
TPC Interpretation of Governor Tim Pawlenty's Tax Proposal Outline
Baseline: Current Policy
1
Distribution of Federal Tax Change by Cash Income Level, 2013 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
12.5
20.6
72.7
89.2
97.6
98.6
99.0
99.3
99.7
99.5
100.0
56.6
0.1
0.2
0.5
0.6
0.3
0.2
0.1
0.2
0.2
*
*
0.3
Percent Change in After‐Tax Income 4
0.3
0.2
1.0
2.0
3.0
5.3
6.5
7.0
12.3
19.3
31.2
6.2
Share of Total Federal Tax Change
0.2
0.4
1.7
3.6
4.3
14.5
10.0
15.5
13.9
8.0
27.6
100.0
Average Federal Tax Change
Dollars
Percent
‐15
‐34
‐220
‐606
‐1,131
‐2,623
‐4,383
‐7,223
‐27,431
‐95,506
‐587,254
‐1,940
‐4.7
‐4.0
‐7.7
‐11.5
‐13.2
‐20.1
‐21.1
‐21.7
‐35.8
‐47.4
‐54.8
‐25.1
Share of Federal Taxes
Change (% Points)
0.2
0.7
1.3
1.4
1.3
1.2
0.6
0.8
‐1.4
‐1.3
‐5.0
0.0
Average Federal Tax Rate 5
Under the Proposal
Change (% Points)
1.1
3.4
7.0
9.1
9.6
19.4
12.5
18.7
8.4
3.0
7.6
100.0
‐0.3
‐0.2
‐0.9
‐1.7
‐2.5
‐4.2
‐5.0
‐5.3
‐9.2
‐13.7
‐19.9
‐5.0
Under the Proposal
5.5
5.4
10.4
13.0
16.2
16.7
18.5
19.0
16.5
15.2
16.4
14.8
Baseline Distribution of Income and Federal Taxes
1
by Cash Income Level, 2013 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)
16,722
19,121
12,334
9,158
5,981
8,668
3,570
3,358
794
131
74
80,622
Percent of Total
20.7
23.7
15.3
11.4
7.4
10.8
4.4
4.2
1.0
0.2
0.1
100.0
Pre‐Tax Income
Average (dollars)
5,678
15,084
25,339
35,802
45,980
62,437
88,424
136,678
298,894
696,170
2,952,272
39,043
Percent of Total
3.0
9.2
9.9
10.4
8.7
17.2
10.0
14.6
7.5
2.9
6.9
100.0
Federal Tax Burden
Average (dollars)
326
854
2,857
5,261
8,582
13,077
20,740
33,240
76,630
201,558
1,071,091
7,723
Percent of Total
0.9
2.6
5.7
7.7
8.2
18.2
11.9
17.9
9.8
4.3
12.7
100.0
After‐Tax Income 4
Average (dollars)
5,352
14,229
22,482
30,541
37,398
49,360
67,684
103,438
222,264
494,612
1,881,181
31,320
Percent of Total
3.5
10.8
11.0
11.1
8.9
16.9
9.6
13.8
7.0
2.6
5.5
100.0
Average Federal Tax Rate 5
5.7
5.7
11.3
14.7
18.7
20.9
23.5
24.3
25.6
29.0
36.3
19.8
Source: Urban‐Brookings Tax Policy Center Microsimulation Model (version 0411‐2).
* Less than 0.05
(1) Baseline is current policy, which assumes extension of all temporary provisions in place for 2011 with the exception of the payroll tax cut and indexes the AMT exemption level after 2011. Proposal would: (a) repeal individual alternative minimum tax; (b) impose rate of 10 percent on first $50,000 of taxable income ($100,000 for married couples filing a joint return) and 25 percent on amounts above that threshold, indexed for inflation after 2011; (c) exclude interest income, dividends, and gains from sales of capital assets from gross income; (d) repeal deduction for investment interest; (e) repeal 3.8 percent additional Medicare tax on investment income; (f) impose an alternative tax rate of 15 percent on sole proprietor, farm, partnership, S corporation, and rental income; (g) repeal the estate tax; and (h) reduce the corporate tax rate to 15 percent. Governor Pawlenty has not specified which corporate tax expenditures he would eliminate; our estimates assume the same base broadeners as in the Bipartisan Policy Center's tax reform proposal (Rivlin/Domenici). Effective date: 01/01/13.
(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. 10‐Jun‐11
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Table T11‐0170
TPC Interpretation of Governor Tim Pawlenty's Tax Proposal Outline
Baseline: Current Policy
1
Distribution of Federal Tax Change by Cash Income Level, 2013 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
20.2
20.2
28.9
41.4
59.0
90.3
98.3
99.7
99.8
99.9
100.0
81.9
0.0
0.2
0.6
0.8
1.7
1.2
0.3
0.1
0.1
*
*
0.5
Percent Change in After‐Tax Income 4
1.2
0.4
0.3
0.4
0.5
1.5
2.7
5.1
8.5
13.5
22.8
8.1
Share of Total Federal Tax Change
0.0
0.0
0.1
0.1
0.2
1.8
3.9
19.4
19.8
12.6
42.0
100.0
Average Federal Tax Change
Dollars
Percent
‐59
‐68
‐84
‐144
‐220
‐823
‐2,019
‐5,704
‐18,771
‐69,030
‐461,905
‐8,371
105.3
18.5
‐34.7
‐6.5
‐5.5
‐9.6
‐13.2
‐19.4
‐26.6
‐37.7
‐47.9
‐28.6
Share of Federal Taxes
Change (% Points)
0.0
0.0
0.0
0.2
0.4
1.4
1.8
3.7
0.6
‐1.2
‐6.8
0.0
Average Federal Tax Rate 5
Under the Proposal
Change (% Points)
0.0
‐0.1
0.0
0.6
1.4
6.6
10.4
32.4
21.8
8.4
18.3
100.0
‐1.2
‐0.4
‐0.3
‐0.4
‐0.5
‐1.3
‐2.3
‐4.1
‐6.4
‐9.9
‐15.5
‐6.3
Under the Proposal
‐2.3
‐2.8
0.6
5.8
8.2
12.2
14.8
16.9
17.7
16.4
16.8
15.7
Baseline Distribution of Income and Federal Taxes
1
by Cash Income Level, 2013 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)
1,291
2,559
2,875
3,624
4,468
10,281
9,429
16,457
5,091
885
440
57,802
Percent of Total
2.2
4.4
5.0
6.3
7.7
17.8
16.3
28.5
8.8
1.5
0.8
100.0
Pre‐Tax Income
Average (dollars)
5,093
15,850
25,634
36,207
46,489
63,998
89,794
140,888
291,809
696,396
2,988,320
132,789
Federal Tax Burden
Percent of Total
Average (dollars)
Percent of Total
0.1
0.5
1.0
1.7
2.7
8.6
11.0
30.2
19.4
8.0
17.1
100.0
‐56
‐367
242
2,224
4,029
8,609
15,305
29,464
70,527
183,268
964,061
29,259
0.0
‐0.1
0.0
0.5
1.1
5.2
8.5
28.7
21.2
9.6
25.1
100.0
After‐Tax Income 4
Average (dollars)
5,150
16,217
25,392
33,982
42,461
55,389
74,489
111,424
221,282
513,128
2,024,260
103,530
Percent of Total
0.1
0.7
1.2
2.1
3.2
9.5
11.7
30.6
18.8
7.6
14.9
100.0
Average Federal Tax Rate 5
‐1.1
‐2.3
0.9
6.1
8.7
13.5
17.0
20.9
24.2
26.3
32.3
22.0
Source: Urban‐Brookings Tax Policy Center Microsimulation Model (version 0411‐2).
* Less than 0.05
(1) Baseline is current policy, which assumes extension of all temporary provisions in place for 2011 with the exception of the payroll tax cut and indexes the AMT exemption level after 2011. Proposal would: (a) repeal individual alternative minimum tax; (b) impose rate of 10 percent on first $50,000 of taxable income ($100,000 for married couples filing a joint return) and 25 percent on amounts above that threshold, indexed for inflation after 2011; (c) exclude interest income, dividends, and gains from sales of capital assets from gross income; (d) repeal deduction for investment interest; (e) repeal 3.8 percent additional Medicare tax on investment income; (f) impose an alternative tax rate of 15 percent on sole proprietor, farm, partnership, S corporation, and rental income; (g) repeal the estate tax; and (h) reduce the corporate tax rate to 15 percent. Governor Pawlenty has not specified which corporate tax expenditures he would eliminate; our estimates assume the same base broadeners as in the Bipartisan Policy Center's tax reform proposal (Rivlin/Domenici). Effective date: 01/01/13.
(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. 10‐Jun‐11
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Table T11‐0170
TPC Interpretation of Governor Tim Pawlenty's Tax Proposal Outline
Baseline: Current Policy
1
Distribution of Federal Tax Change by Cash Income Level, 2013 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
8.4
6.8
11.7
52.6
83.0
93.7
98.1
99.3
99.9
98.7
100.0
42.7
*
0.1
0.2
0.2
0.3
0.1
0.3
0.1
0.0
0.0
0.0
0.2
Percent Change in After‐Tax Income 4
0.1
0.1
0.1
0.4
1.1
2.1
3.0
3.6
8.4
12.5
25.0
2.3
Share of Total Federal Tax Change
0.1
0.2
0.5
2.1
5.1
17.2
14.0
15.8
13.1
7.2
24.7
100.0
Average Federal Tax Change
Dollars
Percent
‐6
‐8
‐20
‐116
‐422
‐1,075
‐2,145
‐3,622
‐18,167
‐62,424
‐473,115
‐821
0.8
0.6
12.4
‐4.0
‐7.0
‐10.3
‐12.4
‐11.9
‐25.7
‐35.6
‐49.0
‐16.5
Share of Federal Taxes
Change (% Points)
‐0.4
‐1.3
‐0.2
1.3
1.4
2.1
0.9
1.2
‐0.9
‐0.8
‐3.2
0.0
Average Federal Tax Rate 5
Under the Proposal
Change (% Points)
Under the Proposal
‐2.2
‐7.8
‐0.8
9.9
13.4
29.7
19.6
23.1
7.5
2.6
5.1
100.0
‐0.1
‐0.1
‐0.1
‐0.3
‐0.9
‐1.7
‐2.4
‐2.7
‐6.3
‐9.2
‐16.5
‐2.1
‐12.0
‐9.9
‐0.7
7.7
12.2
15.1
17.2
20.2
18.3
16.7
17.2
10.4
Baseline Distribution of Income and Federal Taxes
1
by Cash Income Level, 2013 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)
2,911
5,398
4,846
3,748
2,505
3,317
1,353
905
149
24
11
25,256
Percent of Total
11.5
21.4
19.2
14.8
9.9
13.1
5.4
3.6
0.6
0.1
0.0
100.0
Pre‐Tax Income
Average (dollars)
6,577
15,312
25,728
35,771
45,998
62,381
88,201
132,511
287,163
675,227
2,859,898
39,986
Federal Tax Burden
Percent of Total
Average (dollars)
Percent of Total
1.9
8.2
12.4
13.3
11.4
20.5
11.8
11.9
4.3
1.6
3.1
100.0
‐784
‐1,512
‐158
2,875
6,045
10,461
17,327
30,429
70,604
175,368
965,301
4,975
‐1.8
‐6.5
‐0.6
8.6
12.1
27.6
18.7
21.9
8.4
3.3
8.3
100.0
After‐Tax Income 4
Average (dollars)
7,360
16,823
25,886
32,895
39,953
51,920
70,873
102,082
216,560
499,858
1,894,597
35,011
Percent of Total
2.4
10.3
14.2
13.9
11.3
19.5
10.9
10.4
3.7
1.3
2.3
100.0
Average Federal Tax Rate 5
‐11.9
‐9.9
‐0.6
8.0
13.1
16.8
19.7
23.0
24.6
26.0
33.8
12.4
Source: Urban‐Brookings Tax Policy Center Microsimulation Model (version 0411‐2).
* Less than 0.05
(1) Baseline is current policy, which assumes extension of all temporary provisions in place for 2011 with the exception of the payroll tax cut and indexes the AMT exemption level after 2011. Proposal would: (a) repeal individual alternative minimum tax; (b) impose rate of 10 percent on first $50,000 of taxable income ($100,000 for married couples filing a joint return) and 25 percent on amounts above that threshold, indexed for inflation after 2011; (c) exclude interest income, dividends, and gains from sales of capital assets from gross income; (d) repeal deduction for investment interest; (e) repeal 3.8 percent additional Medicare tax on investment income; (f) impose an alternative tax rate of 15 percent on sole proprietor, farm, partnership, S corporation, and rental income; (g) repeal the estate tax; and (h) reduce the corporate tax rate to 15 percent. Governor Pawlenty has not specified which corporate tax expenditures he would eliminate; our estimates assume the same base broadeners as in the Bipartisan Policy Center's tax reform proposal (Rivlin/Domenici). Effective date: 01/01/13.
(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. 10‐Jun‐11
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Table T11‐0170
TPC Interpretation of Governor Tim Pawlenty's Tax Proposal Outline
Baseline: Current Policy
1
Distribution of Federal Tax Change by Cash Income Level, 2013 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
5.6
7.8
14.2
44.5
64.5
90.7
97.8
99.6
99.8
99.9
100.0
63.1
*
0.1
0.3
0.6
1.0
0.6
0.3
0.1
0.1
0.0
0.0
0.3
Percent Change in After‐Tax Income 4
0.2
0.1
0.1
0.3
0.7
1.5
2.3
4.3
8.0
13.4
22.9
6.4
Share of Total Federal Tax Change
0.0
0.0
0.1
0.2
0.5
2.5
4.3
18.9
20.7
13.0
39.7
100.0
Average Federal Tax Change
Dollars
Percent
‐11
‐14
‐23
‐100
‐268
‐793
‐1,719
‐4,782
‐17,549
‐67,147
‐449,134
‐4,721
1.0
0.6
2.1
‐4.9
‐5.4
‐8.2
‐10.7
‐16.1
‐24.4
‐34.9
‐45.8
‐25.0
Share of Federal Taxes
Change (% Points)
‐0.1
‐0.5
‐0.2
0.3
0.6
1.7
1.9
3.5
0.2
‐1.2
‐6.0
0.0
Average Federal Tax Rate 5
Under the Proposal
Change (% Points)
Under the Proposal
‐0.5
‐2.0
‐0.9
1.3
2.7
9.4
12.0
32.8
21.4
8.1
15.6
100.0
‐0.2
‐0.1
‐0.1
‐0.3
‐0.6
‐1.3
‐1.9
‐3.4
‐6.1
‐9.7
‐15.3
‐5.1
‐17.7
‐15.7
‐4.3
5.4
10.3
14.0
16.0
17.8
18.8
18.0
18.0
15.2
Baseline Distribution of Income and Federal Taxes
1
by Cash Income Level, 2013 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)
3,361
5,658
5,534
4,844
3,945
7,372
5,840
9,226
2,749
450
206
49,418
Percent of Total
6.8
11.5
11.2
9.8
8.0
14.9
11.8
18.7
5.6
0.9
0.4
100.0
Pre‐Tax Income
Average (dollars)
5,988
15,525
25,702
35,836
46,072
63,539
89,617
140,522
290,144
695,662
2,943,211
93,026
Federal Tax Burden
Percent of Total
Average (dollars)
Percent of Total
0.4
1.9
3.1
3.8
4.0
10.2
11.4
28.2
17.4
6.8
13.2
100.0
‐1,046
‐2,415
‐1,078
2,028
5,002
9,701
16,073
29,725
71,962
192,521
980,000
18,899
‐0.4
‐1.5
‐0.6
1.1
2.1
7.7
10.1
29.4
21.2
9.3
21.7
100.0
After‐Tax Income 4
Average (dollars)
7,034
17,941
26,780
33,808
41,070
53,838
73,544
110,797
218,182
503,141
1,963,211
74,127
Percent of Total
0.7
2.8
4.1
4.5
4.4
10.8
11.7
27.9
16.4
6.2
11.1
100.0
Average Federal Tax Rate 5
‐17.5
‐15.6
‐4.2
5.7
10.9
15.3
17.9
21.2
24.8
27.7
33.3
20.3
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) Baseline is current policy, which assumes extension of all temporary provisions in place for 2011 with the exception of the payroll tax cut and indexes the AMT exemption level after 2011. Proposal would: (a) repeal individual alternative minimum tax; (b) impose rate of 10 percent on first $50,000 of taxable income ($100,000 for married couples filing a joint return) and 25 percent on amounts above that threshold, indexed for inflation after 2011; (c) exclude interest income, dividends, and gains from sales of capital assets from gross income; (d) repeal deduction for investment interest; (e) repeal 3.8 percent additional Medicare tax on investment income; (f) impose an alternative tax rate of 15 percent on sole proprietor, farm, partnership, S corporation, and rental income; (g) repeal the estate tax; and (h) reduce the corporate tax rate to 15 percent. Governor Pawlenty has not specified which corporate tax expenditures he would eliminate; our estimates assume the same base broadeners as in the Bipartisan Policy Center's tax reform proposal (Rivlin/Domenici). Effective date: 01/01/13.
(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. 10‐Jun‐11
PRELIMINARY RESULTS
http://www.taxpolicycenter.org
Table T11‐0170
TPC Interpretation of Governor Tim Pawlenty's Tax Proposal Outline
Baseline: Current Policy
1
Distribution of Federal Tax Change by Cash Income Level, 2013 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
17.0
25.3
55.3
74.3
78.4
92.9
98.9
99.7
99.8
99.9
100.0
64.4
0.0
*
0.3
1.1
1.1
1.3
0.5
0.1
0.2
0.0
*
0.5
Percent Change in After‐Tax Income 4
0.2
0.3
0.8
1.3
1.5
3.3
4.8
7.7
11.9
18.3
28.7
8.9
Share of Total Federal Tax Change
0.0
0.2
0.5
0.9
1.0
5.0
5.8
17.6
18.4
11.6
39.1
100.0
Average Federal Tax Change
Dollars
Percent
‐15
‐38
‐185
‐446
‐665
‐1,851
‐3,663
‐8,813
‐27,669
‐93,833
‐583,147
‐5,222
‐25.2
‐26.6
‐27.4
‐25.8
‐24.2
‐29.8
‐30.8
‐35.4
‐41.4
‐50.8
‐55.5
‐43.0
Share of Federal Taxes
Change (% Points)
0.0
0.1
0.2
0.4
0.6
1.7
1.7
2.8
0.5
‐1.3
‐6.7
0.0
Average Federal Tax Rate 5
Under the Proposal
Change (% Points)
0.1
0.4
1.0
1.9
2.3
8.9
9.8
24.1
19.6
8.5
23.6
100.0
‐0.2
‐0.3
‐0.7
‐1.2
‐1.4
‐2.9
‐4.1
‐6.3
‐9.3
‐13.4
‐18.9
‐7.4
Under the Proposal
0.7
0.7
2.0
3.6
4.5
6.9
9.2
11.5
13.1
13.0
15.2
9.8
Baseline Distribution of Income and Federal Taxes
1
by Cash Income Level, 2013 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)
3,030
8,603
4,956
3,838
2,823
5,216
3,053
3,858
1,285
239
130
37,068
Percent of Total
8.2
23.2
13.4
10.4
7.6
14.1
8.2
10.4
3.5
0.7
0.4
100.0
Pre‐Tax Income
Average (dollars)
6,762
15,150
25,187
35,853
46,514
63,113
88,974
139,885
298,833
698,342
3,081,067
71,055
Percent of Total
0.8
5.0
4.7
5.2
5.0
12.5
10.3
20.5
14.6
6.4
15.2
100.0
Federal Tax Burden
Average (dollars)
59
142
678
1,731
2,749
6,222
11,881
24,883
66,834
184,856
1,050,097
12,158
Percent of Total
0.0
0.3
0.8
1.5
1.7
7.2
8.1
21.3
19.1
9.8
30.3
100.0
After‐Tax Income 4
Average (dollars)
6,703
15,008
24,509
34,122
43,765
56,891
77,093
115,002
231,999
513,486
2,030,970
58,897
Percent of Total
0.9
5.9
5.6
6.0
5.7
13.6
10.8
20.3
13.7
5.6
12.1
100.0
Average Federal Tax Rate 5
0.9
0.9
2.7
4.8
5.9
9.9
13.4
17.8
22.4
26.5
34.1
17.1
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) Baseline is current policy, which assumes extension of all temporary provisions in place for 2011 with the exception of the payroll tax cut and indexes the AMT exemption level after 2011. Proposal would: (a) repeal individual alternative minimum tax; (b) impose rate of 10 percent on first $50,000 of taxable income ($100,000 for married couples filing a joint return) and 25 percent on amounts above that threshold, indexed for inflation after 2011; (c) exclude interest income, dividends, and gains from sales of capital assets from gross income; (d) repeal deduction for investment interest; (e) repeal 3.8 percent additional Medicare tax on investment income; (f) impose an alternative tax rate of 15 percent on sole proprietor, farm, partnership, S corporation, and rental income; (g) repeal the estate tax; and (h) reduce the corporate tax rate to 15 percent. Governor Pawlenty has not specified which corporate tax expenditures he would eliminate; our estimates assume the same base broadeners as in the Bipartisan Policy Center's tax reform proposal (Rivlin/Domenici). Effective date: 01/01/13.
(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.