28-Jan-15
VERY PRELIMINARY: SUBJECT TO REVISION
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 T15-0004
Major Individual Income Tax Provisions Outlined in President Obama's State of the Union Address
Baseline: Current Law
Distribution of Federal Tax Change by Expanded Cash Income Percentile, 2016 ¹
Summary Table
Expanded Cash Income
Percentile2,3
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Tax Units with Tax Increase or Cut 4
With Tax Cut
Pct of Tax Units
Avg Tax Cut
With Tax Increase
Avg Tax
Pct of Tax Units
Increase
Percent Change
in After-Tax
Income5
Share of Total
Federal Tax
Change
Average
Federal Tax
Change ($)
Average Federal Tax Rate6
Change (%
Points)
Under the
Proposal
30.4
18.4
24.7
43.6
43.0
30.4
-617
-452
-557
-668
-533
-580
0.8
3.7
6.1
4.1
6.9
3.9
1,295
1,549
2,076
4,901
26,308
8,730
1.2
0.1
0.0
0.1
-0.6
-0.2
-28.6
-3.5
-1.4
-9.0
138.2
100.0
-177
-26
-12
-91
1,590
164
-1.1
-0.1
0.0
-0.1
0.5
0.2
2.0
8.3
14.0
17.1
26.4
20.1
58.9
46.4
9.2
3.2
1.0
-584
-353
-731
-1,707
-1,818
3.7
0.8
4.3
77.8
93.3
4,222
40,005
33,248
34,488
167,234
0.1
-0.1
-0.4
-1.8
-2.4
-8.1
3.5
23.7
119.0
71.0
-186
164
1,362
26,777
156,014
-0.1
0.1
0.3
1.2
1.5
19.3
21.5
24.9
35.5
38.1
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0613-5).
Number of AMT Taxpayers (millions). Baseline: 4.8
Proposal: 4.8
* Less than 0.05
** Insufficient data
(1) Calendar year. Baseline is current law. Proposal would: (a) raise the top tax rate on long-term capital gains and qualified dividends from 20 percent to 24.2 percent; (b) tax
unrealized capital gains at death (table shows the fully-phased in impact of this provision); (c) enact a credit for second earners of up
to $500; (d) expand the earned income tax credit (EITC) for childless workers; (e) expand the child and dependent care tax credit (table does not include effects of repeal of
dependent care flexible spending accounts); (f) expand the American Opportunity Tax Credit (AOTC); (g) repeal the Lifetime Learning Tax Credit (table does not include the effect of
provisions related to student loan forgiveness or Section 529 education savings plans); (h) enact an “auto-IRA” proposal; (i) limit the size of accumulated balances in IRA and 401(k)-type
retirement accounts; and (j) repeal the deduction for student loan interest for new borrowers (table shows the fully phased in effect). Estimates in the table are based on descriptions
of these proposals provided by the Administration in its fact sheet:
http://www.whitehouse.gov/the-press-office/2015/01/17/fact-sheet-simpler-fairer-tax-code-responsibly-invests-middle-class-fami
For a description of TPC's current law baseline, see:
http://www.taxpolicycenter.org/taxtopics/Baseline-Definitions.cfm
(2) Includes both filing and non-filing units but excludes those that are dependents of other tax units. Tax units with negative adjusted gross income are excluded from their respective income class but are
included in the totals. For a description of expanded cash income, see
http://www.taxpolicycenter.org/TaxModel/income.cfm
(3) The income percentile classes used in this table are based on the income distribution for the entire population and contain an equal number of people, not tax units. The breaks are (in 2013 dollars):
20% $25,260; 40% $49,086; 60% $84,055; 80% $141,662; 90% $200,181; 95% $279,647; 99% $663,130; 99.9% $3,446,944.
(4) Includes tax units with a change in federal tax burden of $10 or more in absolute value.
(5) After-tax income is expanded cash income less: individual income tax net of refundable credits; corporate income tax; payroll taxes (Social Security and Medicare); and estate tax.
(6) 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 expanded cash income.
28-Jan-15
VERY PRELIMINARY: SUBJECT TO REVISION
http://www.taxpolicycenter.org
Table T15-0004
Major Individual Income Tax Provisions Outlined in President Obama's State of the Union Address
Baseline: Current Law
Distribution of Federal Tax Change by Expanded Cash Income Percentile, 2016 ¹
Detail Table
Expanded Cash Income
Percentile2,3
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Percent of Tax Units
With Tax Cut
4
With Tax
Increase
Percent Change
in After-Tax
Income5
Share of Total
Federal Tax
Change
Average Federal Tax Change
Dollars
Percent
Share of Federal Taxes
Change (%
Points)
Under the
Proposal
6
Average Federal Tax Rate
Change (%
Points)
Under the
Proposal
30.4
18.4
24.7
43.6
43.0
30.4
0.8
3.7
6.1
4.1
6.9
3.9
1.2
0.1
0.0
0.1
-0.6
-0.2
-28.6
-3.5
-1.4
-9.0
138.2
100.0
-177
-26
-12
-91
1,590
164
-36.4
-0.8
-0.1
-0.5
1.8
0.9
-0.3
-0.1
-0.1
-0.2
0.6
0.0
0.4
3.7
10.1
17.1
68.4
100.0
-1.1
-0.1
0.0
-0.1
0.5
0.2
2.0
8.3
14.0
17.1
26.4
20.1
58.9
46.4
9.2
3.2
1.0
3.7
0.8
4.3
77.8
93.3
0.1
-0.1
-0.4
-1.8
-2.4
-8.1
3.5
23.7
119.0
71.0
-186
164
1,362
26,777
156,014
-0.6
0.3
1.4
3.5
4.1
-0.2
-0.1
0.1
0.8
0.5
12.7
10.0
15.2
30.6
15.5
-0.1
0.1
0.3
1.2
1.5
19.3
21.5
24.9
35.5
38.1
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Baseline Distribution of Income and Federal Taxes
by Expanded Cash Income Percentile, 2016 ¹
Expanded Cash Income
2,3
Percentile
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Tax Units
Pre-Tax Income
Federal Tax Burden
Average
Federal Tax
Rate 6
Percent of
Total
43,584
36,537
32,617
26,860
23,468
164,808
26.5
22.2
19.8
16.3
14.2
100.0
15,614
38,416
68,960
116,375
346,310
94,528
4.4
9.0
14.4
20.1
52.2
100.0
487
3,230
9,677
20,002
89,769
18,855
0.7
3.8
10.2
17.3
67.8
100.0
15,127
35,187
59,283
96,373
256,541
75,672
5.3
10.3
15.5
20.8
48.3
100.0
3.1
8.4
14.0
17.2
25.9
20.0
11,738
5,828
4,701
1,200
123
7.1
3.5
2.9
0.7
0.1
175,719
249,464
405,931
2,251,054
10,363,091
13.2
9.3
12.3
17.4
8.2
34,095
53,380
99,709
771,891
3,789,029
12.9
10.0
15.1
29.8
15.0
141,624
196,084
306,222
1,479,163
6,574,062
13.3
9.2
11.5
14.2
6.5
19.4
21.4
24.6
34.3
36.6
Average (dollars)
Percent of
Total
5
Number
(thousands)
Average (dollars)
Percent of
Total
After-Tax Income
Average (dollars)
Percent of
Total
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0613-5).
Number of AMT Taxpayers (millions). Baseline: 4.8
Proposal: 4.8
* Less than 0.05
(1) Calendar year. Baseline is current law. Proposal would: (a) raise the top tax rate on long-term capital gains and qualified dividends from 20 percent to 24.2 percent; (b) tax
unrealized capital gains at death (table shows the fully-phased in impact of this provision); (c) enact a credit for second earners of up
to $500; (d) expand the earned income tax credit (EITC) for childless workers; (e) expand the child and dependent care tax credit (table does not include effects of repeal of
dependent care flexible spending accounts); (f) expand the American Opportunity Tax Credit (AOTC); (g) repeal the Lifetime Learning Tax Credit (table does not include the effect of
provisions related to student loan forgiveness or Section 529 education savings plans); (h) enact an “auto-IRA” proposal; (i) limit the size of accumulated balances in IRA and 401(k)-type
retirement accounts; and (j) repeal the deduction for student loan interest for new borrowers (table shows the fully phased in effect). Estimates in the table are based on descriptions
of these proposals provided by the Administration in its fact sheet:
http://www.whitehouse.gov/the-press-office/2015/01/17/fact-sheet-simpler-fairer-tax-code-responsibly-invests-middle-class-fami
For a description of TPC's current law baseline, see:
http://www.taxpolicycenter.org/taxtopics/Baseline-Definitions.cfm
(2) Includes both filing and non-filing units but excludes those that are dependents of other tax units. Tax units with negative adjusted gross income are excluded from their respective income class but are
included in the totals. For a description of expanded cash income, see
http://www.taxpolicycenter.org/TaxModel/income.cfm
(3) The income percentile classes used in this table are based on the income distribution for the entire population and contain an equal number of people, not tax units. The breaks are (in 2013 dollars): 20%
$25,260; 40% $49,086; 60% $84,055; 80% $141,662; 90% $200,181; 95% $279,647; 99% $663,130; 99.9% $3,446,944.
(4) Includes tax units with a change in federal tax burden of $10 or more in absolute value.
(5) After-tax income is expanded cash income less: individual income tax net of refundable credits; corporate income tax; payroll taxes (Social Security and Medicare); and estate tax.
(6) 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 expanded cash income.
28-Jan-15
VERY PRELIMINARY: SUBJECT TO REVISION
http://www.taxpolicycenter.org
Table T15-0004
Major Individual Income Tax Provisions Outlined in President Obama's State of the Union Address
Baseline: Current Law
Distribution of Federal Tax Change by Expanded Cash Income Percentile Adjusted for Family Size, 2016 ¹
Detail Table
Expanded Cash Income
Percentile2,3
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Percent of Tax Units4
With Tax Cut
With Tax
Increase
Percent Change
in After-Tax
Income5
Share of Total
Federal Tax
Change
Average Federal Tax Change
Dollars
Percent
Share of Federal Taxes
Change (% Points)
Under the
Proposal
Average Federal Tax Rate6
Change (%
Points)
Under the
Proposal
30.0
25.4
28.0
37.1
33.1
30.4
0.4
2.6
5.1
6.3
5.9
3.9
1.3
0.3
0.2
0.1
-0.6
-0.2
-24.7
-11.9
-10.4
-12.0
154.7
100.0
-188
-94
-87
-105
1,380
164
208.3
-4.0
-1.2
-0.6
1.9
0.9
-0.2
-0.1
-0.2
-0.3
0.7
0.0
-0.3
2.4
7.7
16.3
73.6
100.0
-1.3
-0.3
-0.1
-0.1
0.5
0.2
-1.9
6.5
12.2
16.5
26.1
20.1
43.5
35.4
10.9
2.6
0.9
3.5
1.2
3.0
68.0
92.7
0.0
-0.1
-0.4
-1.8
-2.4
3.1
3.7
23.6
124.3
75.6
54
132
1,062
23,519
141,465
0.2
0.3
1.3
3.5
4.2
-0.1
-0.1
0.1
0.8
0.5
14.4
11.0
16.5
31.7
16.2
0.0
0.1
0.3
1.2
1.5
19.6
21.6
24.6
35.3
38.1
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Baseline Distribution of Income and Federal Taxes
by Expanded Cash Income Percentile Adjusted for Family Size, 2016 ¹
Expanded Cash Income
Percentile2,3
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Tax Units
Pre-Tax Income
Federal Tax Burden
Percent of
Total
35,428
34,281
32,453
30,625
30,280
164,808
21.5
20.8
19.7
18.6
18.4
100.0
14,757
34,237
60,773
101,233
291,199
94,528
3.4
7.5
12.7
19.9
56.6
100.0
-90
2,327
7,516
16,810
74,754
18,855
-0.1
2.6
7.9
16.6
72.8
100.0
14,847
31,910
53,257
84,422
216,445
75,672
4.2
8.8
13.9
20.7
52.6
100.0
-0.6
6.8
12.4
16.6
25.7
20.0
15,359
7,494
5,998
1,428
144
9.3
4.6
3.6
0.9
0.1
149,959
212,543
351,455
1,970,005
9,201,391
14.8
10.2
13.5
18.1
8.5
29,309
45,758
85,272
671,522
3,362,649
14.5
11.0
16.5
30.9
15.6
120,650
166,785
266,183
1,298,483
5,838,743
14.9
10.0
12.8
14.9
6.8
19.5
21.5
24.3
34.1
36.6
Average (dollars)
Percent of
Total
Average (dollars)
Percent of
Total
Average
Federal Tax
Number
(thousands)
Average (dollars)
Percent of
Total
After-Tax Income 5
Rate 6
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0613-5).
Number of AMT Taxpayers (millions). Baseline: 4.8
Proposal: 4.8
* Less than 0.05
(1) Calendar year. Baseline is current law. Proposal would: (a) raise the top tax rate on long-term capital gains and qualified dividends from 20 percent to 24.2 percent; (b) tax
unrealized capital gains at death (table shows the fully-phased in impact of this provision); (c) enact a credit for second earners of up
to $500; (d) expand the earned income tax credit (EITC) for childless workers; (e) expand the child and dependent care tax credit (table does not include effects of repeal of
dependent care flexible spending accounts); (f) expand the American Opportunity Tax Credit (AOTC); (g) repeal the Lifetime Learning Tax Credit (table does not include the effect of
provisions related to student loan forgiveness or Section 529 education savings plans); (h) enact an “auto-IRA” proposal; (i) limit the size of accumulated balances in IRA and 401(k)-type
retirement accounts; and (j) repeal the deduction for student loan interest for new borrowers (table shows the fully phased in effect). Estimates in the table are based on descriptions
of these proposals provided by the Administration in its fact sheet:
http://www.whitehouse.gov/the-press-office/2015/01/17/fact-sheet-simpler-fairer-tax-code-responsibly-invests-middle-class-fami
For a description of TPC's current law baseline, see:
http://www.taxpolicycenter.org/taxtopics/Baseline-Definitions.cfm
(2) Includes both filing and non-filing units but excludes those that are dependents of other tax units. Tax units with negative adjusted gross income are excluded from their respective income class but are
included in the totals. For a description of expanded cash income, see
http://www.taxpolicycenter.org/TaxModel/income.cfm
(3) The income percentile classes used in this table are based on the income distribution for the entire population and contain an equal number of people, not tax units. The incomes used are adjusted for family
size by dividing by the square root of the number of people in the tax unit. The resulting percentile breaks are (in 2013 dollars): 20% $17,488; 40% $32,340; 60% $53,324; 80% $84,999; 90% $119,750; 95%
$166,406; 99% $394,734; 99.9% $2,075,547.
(4) Includes tax units with a change in federal tax burden of $10 or more in absolute value.
(5) After-tax income is expanded cash income less: individual income tax net of refundable credits; corporate income tax; payroll taxes (Social Security and Medicare); and estate tax.
(6) 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 expanded cash income.
28-Jan-15
VERY PRELIMINARY: SUBJECT TO REVISION
http://www.taxpolicycenter.org
Table T15-0004
Major Individual Income Tax Provisions Outlined in President Obama's State of the Union Address
Baseline: Current Law
Distribution of Federal Tax Change by Expanded Cash Income Percentile Adjusted for Family Size, 2016 ¹
Detail Table - Single Tax Units
Expanded Cash Income
Percentile2,3
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Percent of Tax Units
With Tax Cut
4
With Tax
Increase
Percent Change
in After-Tax
Income5
Share of Total
Federal Tax
Change
Average Federal Tax Change
Dollars
Percent
Share of Federal Taxes
Change (%
Points)
Under the
Proposal
Average Federal Tax Rate6
Change (%
Points)
Under the
Proposal
39.2
23.5
12.5
9.5
5.5
21.8
0.5
3.2
6.6
10.0
3.4
4.1
2.3
0.3
-0.2
-0.4
-0.9
-0.3
-71.7
-19.5
11.6
30.8
141.4
100.0
-247
-80
61
204
1,237
100
-43.3
-3.4
1.0
1.5
2.6
1.1
-0.8
-0.3
0.0
0.1
0.9
0.0
1.0
5.8
12.4
21.7
58.8
100.0
-2.1
-0.3
0.1
0.3
0.7
0.2
2.8
8.7
13.8
19.0
26.6
19.0
6.8
5.3
2.6
1.0
0.8
2.5
0.6
0.7
48.9
89.5
-0.7
-0.3
-0.5
-2.2
-2.9
37.3
8.5
18.2
77.4
47.1
597
297
947
19,168
119,149
2.7
0.9
1.6
4.1
4.7
0.2
0.0
0.1
0.6
0.4
15.2
10.3
12.5
20.9
11.1
0.6
0.2
0.4
1.4
1.8
21.9
23.3
24.9
36.6
40.2
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Baseline Distribution of Income and Federal Taxes
by Expanded Cash Income Percentile Adjusted for Family Size, 2016 ¹
Expanded Cash Income
2,3
Percentile
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Tax Units
Pre-Tax Income
Federal Tax Burden
5
Average
Federal Tax
Rate 6
Number
(thousands)
Percent of
Total
21,601
18,079
14,176
11,244
8,516
74,432
29.0
24.3
19.1
15.1
11.4
100.0
11,534
26,152
44,707
71,949
183,916
50,088
6.7
12.7
17.0
21.7
42.0
100.0
571
2,366
6,126
13,469
47,766
9,438
1.8
6.1
12.4
21.6
57.9
100.0
10,963
23,786
38,581
58,480
136,150
40,650
7.8
14.2
18.1
21.7
38.3
100.0
5.0
9.1
13.7
18.7
26.0
18.8
4,646
2,137
1,433
301
29
6.2
2.9
1.9
0.4
0.0
105,943
147,173
247,647
1,345,525
6,634,759
13.2
8.4
9.5
10.9
5.2
22,560
33,982
60,811
472,829
2,549,367
14.9
10.3
12.4
20.3
10.7
83,383
113,191
186,835
872,696
4,085,392
12.8
8.0
8.9
8.7
4.0
21.3
23.1
24.6
35.1
38.4
Average (dollars)
Percent of
Total
Average (dollars)
Percent of
Total
After-Tax Income
Average (dollars)
Percent of
Total
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0613-5).
* Less than 0.05
(1) Calendar year. Baseline is current law. Proposal would: (a) raise the top tax rate on long-term capital gains and qualified dividends from 20 percent to 24.2 percent; (b) tax
unrealized capital gains at death (table shows the fully-phased in impact of this provision); (c) enact a credit for second earners of up
to $500; (d) expand the earned income tax credit (EITC) for childless workers; (e) expand the child and dependent care tax credit (table does not include effects of repeal of
dependent care flexible spending accounts); (f) expand the American Opportunity Tax Credit (AOTC); (g) repeal the Lifetime Learning Tax Credit (table does not include the effect of
provisions related to student loan forgiveness or Section 529 education savings plans); (h) enact an “auto-IRA” proposal; (i) limit the size of accumulated balances in IRA and 401(k)-type
retirement accounts; and (j) repeal the deduction for student loan interest for new borrowers (table shows the fully phased in effect). Estimates in the table are based on descriptions
of these proposals provided by the Administration in its fact sheet:
http://www.whitehouse.gov/the-press-office/2015/01/17/fact-sheet-simpler-fairer-tax-code-responsibly-invests-middle-class-fami
For a description of TPC's current law baseline, see:
http://www.taxpolicycenter.org/taxtopics/Baseline-Definitions.cfm
(2) Includes both filing and non-filing units but excludes those that are dependents of other tax units. Tax units with negative adjusted gross income are excluded from their respective income class but are
included in the totals. For a description of expanded cash income, see
http://www.taxpolicycenter.org/TaxModel/income.cfm
(3) The income percentile classes used in this table are based on the income distribution for the entire population and contain an equal number of people, not tax units. The incomes used are adjusted for
family size by dividing by the square root of the number of people in the tax unit. The resulting percentile breaks are (in 2013 dollars): 20% $17,488; 40% $32,340; 60% $53,324; 80% $84,999; 90% $119,750;
95% $166,406; 99% $394,734; 99.9% $2,075,547.
(4) Includes tax units with a change in federal tax burden of $10 or more in absolute value.
(5) After-tax income is expanded cash income less: individual income tax net of refundable credits; corporate income tax; payroll taxes (Social Security and Medicare); and estate tax.
(6) 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 expanded cash income.
28-Jan-15
VERY PRELIMINARY: SUBJECT TO REVISION
http://www.taxpolicycenter.org
Table T15-0004
Major Individual Income Tax Provisions Outlined in President Obama's State of the Union Address
Baseline: Current Law
Distribution of Federal Tax Change by Expanded Cash Income Percentile Adjusted for Family Size, 2016 ¹
Detail Table - Married Tax Units Filing Jointly
Expanded Cash Income
Percentile2,3
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Percent of Tax Units
With Tax Cut
4
With Tax
Increase
Percent Change
in After-Tax
Income5
Share of Total
Federal Tax
Change
Average Federal Tax Change
Dollars
Percent
Share of Federal Taxes
Change (%
Points)
Under the
Proposal
Average Federal Tax Rate6
Change (%
Points)
Under the
Proposal
15.4
27.9
45.3
60.0
46.6
44.3
0.3
2.5
4.3
4.6
7.2
4.7
0.4
0.2
0.3
0.3
-0.6
-0.3
-2.2
-4.2
-12.0
-23.9
139.7
100.0
-88
-105
-200
-312
1,452
332
25.2
-3.8
-2.3
-1.6
1.7
1.0
0.0
-0.1
-0.2
-0.4
0.6
0.0
-0.1
1.0
4.8
13.7
80.3
100.0
-0.4
-0.2
-0.3
-0.3
0.4
0.2
-2.1
5.8
11.0
15.3
26.0
21.5
64.0
50.2
13.8
3.0
1.0
4.4
1.5
3.7
73.4
94.0
0.1
0.0
-0.4
-1.7
-2.4
-9.2
1.6
23.0
124.3
74.4
-199
68
1,109
24,470
147,240
-0.6
0.1
1.2
3.4
4.1
-0.2
-0.1
0.0
0.8
0.5
14.3
11.6
18.6
35.9
17.8
-0.1
0.0
0.3
1.2
1.5
18.8
21.0
24.4
35.1
37.8
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Baseline Distribution of Income and Federal Taxes
by Expanded Cash Income Percentile Adjusted for Family Size, 2016 ¹
Expanded Cash Income
2,3
Percentile
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Tax Units
Pre-Tax Income
Federal Tax Burden
5
Average
Federal Tax
Rate 6
Number
(thousands)
Percent of
Total
5,267
8,390
12,478
16,009
20,116
62,924
8.4
13.3
19.8
25.4
32.0
100.0
20,832
46,070
77,299
123,418
339,932
163,166
1.1
3.8
9.4
19.2
66.6
100.0
-349
2,782
8,718
19,247
86,746
34,788
-0.1
1.1
5.0
14.1
79.7
100.0
21,181
43,288
68,581
104,171
253,186
128,378
1.4
4.5
10.6
20.6
63.1
100.0
-1.7
6.0
11.3
15.6
25.5
21.3
9,725
4,992
4,336
1,062
106
15.5
7.9
6.9
1.7
0.2
172,894
243,068
388,266
2,127,421
9,838,688
16.4
11.8
16.4
22.0
10.1
32,655
51,067
93,644
721,593
3,571,583
14.5
11.7
18.6
35.0
17.2
140,239
192,001
294,622
1,405,828
6,267,105
16.9
11.9
15.8
18.5
8.2
18.9
21.0
24.1
33.9
36.3
Average (dollars)
Percent of
Total
Average (dollars)
Percent of
Total
After-Tax Income
Average (dollars)
Percent of
Total
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0613-5).
* Less than 0.05
(1) Calendar year. Baseline is current law. Proposal would: (a) raise the top tax rate on long-term capital gains and qualified dividends from 20 percent to 24.2 percent; (b) tax
unrealized capital gains at death (table shows the fully-phased in impact of this provision); (c) enact a credit for second earners of up
to $500; (d) expand the earned income tax credit (EITC) for childless workers; (e) expand the child and dependent care tax credit (table does not include effects of repeal of
dependent care flexible spending accounts); (f) expand the American Opportunity Tax Credit (AOTC); (g) repeal the Lifetime Learning Tax Credit (table does not include the effect of
provisions related to student loan forgiveness or Section 529 education savings plans); (h) enact an “auto-IRA” proposal; (i) limit the size of accumulated balances in IRA and 401(k)-type
retirement accounts; and (j) repeal the deduction for student loan interest for new borrowers (table shows the fully phased in effect). Estimates in the table are based on descriptions
of these proposals provided by the Administration in its fact sheet:
http://www.whitehouse.gov/the-press-office/2015/01/17/fact-sheet-simpler-fairer-tax-code-responsibly-invests-middle-class-fami
For a description of TPC's current law baseline, see:
http://www.taxpolicycenter.org/taxtopics/Baseline-Definitions.cfm
(2) Includes both filing and non-filing units but excludes those that are dependents of other tax units. Tax units with negative adjusted gross income are excluded from their respective income class but are
included in the totals. For a description of expanded cash income, see
http://www.taxpolicycenter.org/TaxModel/income.cfm
(3) The income percentile classes used in this table are based on the income distribution for the entire population and contain an equal number of people, not tax units. The incomes used are adjusted for
family size by dividing by the square root of the number of people in the tax unit. The resulting percentile breaks are (in 2013 dollars): 20% $17,488; 40% $32,340; 60% $53,324; 80% $84,999; 90% $119,750;
95% $166,406; 99% $394,734; 99.9% $2,075,547.
(4) Includes tax units with a change in federal tax burden of $10 or more in absolute value.
(5) After-tax income is expanded cash income less: individual income tax net of refundable credits; corporate income tax; payroll taxes (Social Security and Medicare); and estate tax.
(6) 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 expanded cash income.
28-Jan-15
VERY PRELIMINARY: SUBJECT TO REVISION
http://www.taxpolicycenter.org
Table T15-0004
Major Individual Income Tax Provisions Outlined in President Obama's State of the Union Address
Baseline: Current Law
Distribution of Federal Tax Change by Expanded Cash Income Percentile Adjusted for Family Size, 2016 ¹
Detail Table - Head of Household Tax Units
Expanded Cash Income
Percentile2,3
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Percent of Tax Units
With Tax Cut
4
With Tax
Increase
Percent Change
in After-Tax
Income5
Share of Total
Federal Tax
Change
Average Federal Tax Change
Dollars
Percent
Share of Federal Taxes
Change (%
Points)
Under the
Proposal
Average Federal Tax Rate6
Change (%
Points)
Under the
Proposal
16.4
28.4
31.7
24.2
13.5
23.8
0.2
1.6
3.9
3.0
2.0
1.7
0.5
0.3
0.4
0.3
-0.2
0.3
27.5
28.5
39.4
18.0
-13.4
100.0
-104
-123
-248
-215
390
-129
6.1
-7.8
-3.0
-1.3
0.7
-2.2
-0.8
-0.5
-0.2
0.3
1.2
0.0
-10.7
7.5
28.9
31.1
43.1
100.0
-0.5
-0.3
-0.4
-0.2
0.2
-0.2
-9.4
3.5
12.2
16.9
24.8
10.8
17.6
6.5
7.9
3.9
2.8
0.1
0.1
1.4
61.5
84.8
0.1
0.0
-0.1
-1.3
-1.8
2.7
0.0
-1.3
-14.9
-9.4
-127
-5
250
15,133
104,852
-0.4
0.0
0.3
2.5
3.3
0.3
0.2
0.2
0.6
0.4
14.0
6.7
8.7
13.6
6.7
-0.1
0.0
0.1
0.8
1.2
20.7
22.2
24.6
34.2
36.8
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Baseline Distribution of Income and Federal Taxes
by Expanded Cash Income Percentile Adjusted for Family Size, 2016 ¹
Expanded Cash Income
2,3
Percentile
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Tax Units
Pre-Tax Income
Federal Tax Burden
5
Average
Federal Tax
Rate 6
Number
(thousands)
Percent of
Total
8,242
7,252
4,967
2,623
1,074
24,338
33.9
29.8
20.4
10.8
4.4
100.0
19,385
40,938
66,664
97,918
225,261
52,994
12.4
23.0
25.7
19.9
18.8
100.0
-1,712
1,571
8,377
16,745
55,555
5,864
-9.9
8.0
29.2
30.8
41.8
100.0
21,097
39,367
58,287
81,173
169,706
47,130
15.2
24.9
25.2
18.6
15.9
100.0
-8.8
3.8
12.6
17.1
24.7
11.1
669
217
157
31
3
2.8
0.9
0.6
0.1
0.0
141,530
193,985
314,767
1,810,389
8,960,600
7.4
3.3
3.8
4.3
2.0
29,404
42,996
77,028
603,340
3,192,127
13.8
6.5
8.5
13.0
6.3
112,126
150,990
237,739
1,207,049
5,768,472
6.5
2.9
3.3
3.2
1.4
20.8
22.2
24.5
33.3
35.6
Average (dollars)
Percent of
Total
Average (dollars)
Percent of
Total
After-Tax Income
Average (dollars)
Percent of
Total
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0613-5).
* Less than 0.05
(1) Calendar year. Baseline is current law. Proposal would: (a) raise the top tax rate on long-term capital gains and qualified dividends from 20 percent to 24.2 percent; (b) tax
unrealized capital gains at death (table shows the fully-phased in impact of this provision); (c) enact a credit for second earners of up
to $500; (d) expand the earned income tax credit (EITC) for childless workers; (e) expand the child and dependent care tax credit (table does not include effects of repeal of
dependent care flexible spending accounts); (f) expand the American Opportunity Tax Credit (AOTC); (g) repeal the Lifetime Learning Tax Credit (table does not include the effect of
provisions related to student loan forgiveness or Section 529 education savings plans); (h) enact an “auto-IRA” proposal; (i) limit the size of accumulated balances in IRA and 401(k)-type
retirement accounts; and (j) repeal the deduction for student loan interest for new borrowers (table shows the fully phased in effect). Estimates in the table are based on descriptions
of these proposals provided by the Administration in its fact sheet:
http://www.whitehouse.gov/the-press-office/2015/01/17/fact-sheet-simpler-fairer-tax-code-responsibly-invests-middle-class-fami
For a description of TPC's current law baseline, see:
http://www.taxpolicycenter.org/taxtopics/Baseline-Definitions.cfm
(2) Includes both filing and non-filing units but excludes those that are dependents of other tax units. Tax units with negative adjusted gross income are excluded from their respective income class but are
included in the totals. For a description of expanded cash income, see
http://www.taxpolicycenter.org/TaxModel/income.cfm
(3) The income percentile classes used in this table are based on the income distribution for the entire population and contain an equal number of people, not tax units. The incomes used are adjusted for
family size by dividing by the square root of the number of people in the tax unit. The resulting percentile breaks are (in 2013 dollars): 20% $17,488; 40% $32,340; 60% $53,324; 80% $84,999; 90% $119,750;
95% $166,406; 99% $394,734; 99.9% $2,075,547.
(4) Includes tax units with a change in federal tax burden of $10 or more in absolute value.
(5) After-tax income is expanded cash income less: individual income tax net of refundable credits; corporate income tax; payroll taxes (Social Security and Medicare); and estate tax.
(6) 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 expanded cash income.
28-Jan-15
VERY PRELIMINARY: SUBJECT TO REVISION
http://www.taxpolicycenter.org
Table T15-0004
Major Individual Income Tax Provisions Outlined in President Obama's State of the Union Address
Baseline: Current Law
Distribution of Federal Tax Change by Expanded Cash Income Percentile Adjusted for Family Size, 2016 ¹
Detail Table - Tax Units with Children
Expanded Cash Income
Percentile2,3
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Percent of Tax Units4
With Tax Cut
With Tax
Increase
Percent Change
in After-Tax
Income5
Share of Total
Federal Tax
Change
Average Federal Tax Change
Dollars
Percent
Share of Federal Taxes
Change (% Points)
Under the
Proposal
Average Federal Tax Rate6
Change (%
Points)
Under the
Proposal
9.8
28.9
50.8
66.1
46.6
39.5
0.3
2.5
5.2
4.4
6.6
3.6
0.3
0.3
0.5
0.4
-0.3
0.1
17.4
32.4
80.0
121.0
-148.5
100.0
-67
-128
-329
-498
710
-82
3.2
-6.9
-3.2
-2.3
0.7
-0.4
-0.1
-0.1
-0.3
-0.4
0.8
0.0
-2.0
1.6
8.6
18.6
73.0
100.0
-0.3
-0.3
-0.4
-0.4
0.2
-0.1
-10.4
3.7
12.1
16.0
25.9
18.9
68.5
37.4
10.9
4.3
1.4
2.6
0.3
7.9
77.2
92.7
0.2
0.0
-0.1
-1.1
-1.7
38.3
4.8
-9.0
-182.6
-117.0
-360
-89
229
18,065
122,238
-0.9
-0.2
0.2
2.1
2.9
-0.1
0.0
0.1
0.8
0.5
14.4
11.5
16.1
31.0
14.6
-0.2
0.0
0.1
0.7
1.1
19.3
21.3
24.9
35.1
37.6
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Baseline Distribution of Income and Federal Taxes
by Expanded Cash Income Percentile Adjusted for Family Size, 2016 ¹
Expanded Cash Income
Percentile2,3
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Tax Units
Pre-Tax Income
Federal Tax Burden
Percent of
Total
11,016
10,740
10,294
10,291
8,856
51,650
21.3
20.8
19.9
19.9
17.2
100.0
20,654
46,531
82,170
134,442
378,160
122,065
3.6
7.9
13.4
21.9
53.1
100.0
-2,080
1,852
10,257
22,000
97,322
23,105
-1.9
1.7
8.9
19.0
72.2
100.0
22,734
44,680
71,914
112,442
280,839
98,959
4.9
9.4
14.5
22.6
48.7
100.0
-10.1
4.0
12.5
16.4
25.7
18.9
4,499
2,272
1,658
428
41
8.7
4.4
3.2
0.8
0.1
197,506
281,552
463,763
2,458,904
11,400,810
14.1
10.1
12.2
16.7
7.3
38,400
60,173
115,238
844,667
4,161,344
14.5
11.5
16.0
30.3
14.1
159,106
221,379
348,525
1,614,237
7,239,466
14.0
9.8
11.3
13.5
5.7
19.4
21.4
24.9
34.4
36.5
Average (dollars)
Percent of
Total
Average (dollars)
Percent of
Total
Average
Federal Tax
Number
(thousands)
Average (dollars)
Percent of
Total
After-Tax Income 5
Rate 6
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0613-5).
* 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 would: (a) raise the top tax rate on long-term capital gains and qualified dividends from 20 percent to 24.2 percent; (b) tax
unrealized capital gains at death (table shows the fully-phased in impact of this provision); (c) enact a credit for second earners of up
to $500; (d) expand the earned income tax credit (EITC) for childless workers; (e) expand the child and dependent care tax credit (table does not include effects of repeal of
dependent care flexible spending accounts); (f) expand the American Opportunity Tax Credit (AOTC); (g) repeal the Lifetime Learning Tax Credit (table does not include the effect of
provisions related to student loan forgiveness or Section 529 education savings plans); (h) enact an “auto-IRA” proposal; (i) limit the size of accumulated balances in IRA and 401(k)-type
retirement accounts; and (j) repeal the deduction for student loan interest for new borrowers (table shows the fully phased in effect). Estimates in the table are based on descriptions
of these proposals provided by the Administration in its fact sheet:
http://www.whitehouse.gov/the-press-office/2015/01/17/fact-sheet-simpler-fairer-tax-code-responsibly-invests-middle-class-fami
For a description of TPC's current law baseline, see:
http://www.taxpolicycenter.org/taxtopics/Baseline-Definitions.cfm
(2) Includes both filing and non-filing units but excludes those that are dependents of other tax units. Tax units with negative adjusted gross income are excluded from their respective income class but are
included in the totals. For a description of expanded cash income, see
http://www.taxpolicycenter.org/TaxModel/income.cfm
(3) The income percentile classes used in this table are based on the income distribution for the entire population and contain an equal number of people, not tax units. The incomes used are adjusted for family
size by dividing by the square root of the number of people in the tax unit. The resulting percentile breaks are (in 2013 dollars): 20% $17,488; 40% $32,340; 60% $53,324; 80% $84,999; 90% $119,750; 95%
$166,406; 99% $394,734; 99.9% $2,075,547.
(4) Includes tax units with a change in federal tax burden of $10 or more in absolute value.
(5) After-tax income is expanded cash income less: individual income tax net of refundable credits; corporate income tax; payroll taxes (Social Security and Medicare); and estate tax.
(6) 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 expanded cash income.
28-Jan-15
VERY PRELIMINARY: SUBJECT TO REVISION
http://www.taxpolicycenter.org
Table T15-0004
Major Individual Income Tax Provisions Outlined in President Obama's State of the Union Address
Baseline: Current Law
Distribution of Federal Tax Change by Expanded Cash Income Percentile Adjusted for Family Size, 2016 ¹
Detail Table - Elderly Tax Units
Expanded Cash Income
Percentile2,3
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Percent of Tax Units4
With Tax Cut
With Tax
Increase
Percent Change
in After-Tax
Income5
Share of Total
Federal Tax
Change
Average Federal Tax Change
Dollars
Percent
Share of Federal Taxes
Change (% Points)
Under the
Proposal
Average Federal Tax Rate6
Change (%
Points)
Under the
Proposal
4.7
8.3
10.0
11.4
11.1
9.1
*
0.2
1.2
1.8
6.4
1.7
0.1
0.0
-0.3
-0.6
-2.1
-1.2
-0.4
-0.2
4.2
9.7
84.1
100.0
-18
-8
152
462
4,304
840
-16.7
-1.1
4.3
4.1
6.1
5.7
0.0
-0.1
-0.1
-0.2
0.3
0.0
0.1
1.2
5.6
13.2
79.5
100.0
-0.1
0.0
0.3
0.5
1.5
1.0
0.6
2.6
6.9
13.0
26.7
18.4
14.4
13.7
3.4
0.3
0.1
2.7
2.1
2.6
70.1
95.8
-1.1
-0.7
-1.7
-3.8
-4.4
11.9
4.9
16.7
50.7
27.6
1,189
1,131
4,062
45,047
232,691
5.5
3.1
5.5
7.3
7.6
0.0
-0.2
-0.1
0.6
0.4
12.5
9.0
17.5
40.6
21.1
0.9
0.6
1.3
2.5
2.8
17.3
20.1
24.6
36.8
39.5
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Baseline Distribution of Income and Federal Taxes
by Expanded Cash Income Percentile Adjusted for Family Size, 2016 ¹
Expanded Cash Income
Percentile2,3
Lowest Quintile
Second Quintile
Middle Quintile
Fourth Quintile
Top Quintile
All
Tax Units
Pre-Tax Income
Federal Tax Burden
Percent of
Total
6,667
9,295
8,764
6,660
6,202
37,787
17.6
24.6
23.2
17.6
16.4
100.0
13,772
29,100
53,476
89,749
280,824
83,961
2.9
8.5
14.8
18.8
54.9
100.0
106
764
3,553
11,157
70,625
14,622
0.1
1.3
5.6
13.5
79.3
100.0
13,667
28,335
49,923
78,591
210,199
69,339
3.5
10.1
16.7
20.0
49.8
100.0
0.8
2.6
6.6
12.4
25.2
17.4
3,165
1,378
1,303
357
38
8.4
3.7
3.5
0.9
0.1
132,840
189,406
319,055
1,806,161
8,292,142
13.3
8.2
13.1
20.3
9.8
21,817
36,919
74,436
619,560
3,045,934
12.5
9.2
17.6
40.0
20.8
111,023
152,487
244,619
1,186,601
5,246,208
13.4
8.0
12.2
16.2
7.5
16.4
19.5
23.3
34.3
36.7
Average (dollars)
Percent of
Total
Average (dollars)
Percent of
Total
Average
Federal Tax
Number
(thousands)
Average (dollars)
Percent of
Total
After-Tax Income 5
Rate 6
Addendum
80-90
90-95
95-99
Top 1 Percent
Top 0.1 Percent
Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0613-5).
* 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 would: (a) raise the top tax rate on long-term capital gains and qualified dividends from 20 percent to 24.2 percent; (b) tax
unrealized capital gains at death (table shows the fully-phased in impact of this provision); (c) enact a credit for second earners of up
to $500; (d) expand the earned income tax credit (EITC) for childless workers; (e) expand the child and dependent care tax credit (table does not include effects of repeal of
dependent care flexible spending accounts); (f) expand the American Opportunity Tax Credit (AOTC); (g) repeal the Lifetime Learning Tax Credit (table does not include the effect of
provisions related to student loan forgiveness or Section 529 education savings plans); (h) enact an “auto-IRA” proposal; (i) limit the size of accumulated balances in IRA and 401(k)-type
retirement accounts; and (j) repeal the deduction for student loan interest for new borrowers (table shows the fully phased in effect). Estimates in the table are based on descriptions
of these proposals provided by the Administration in its fact sheet:
http://www.whitehouse.gov/the-press-office/2015/01/17/fact-sheet-simpler-fairer-tax-code-responsibly-invests-middle-class-fami
For a description of TPC's current law baseline, see:
http://www.taxpolicycenter.org/taxtopics/Baseline-Definitions.cfm
(2) Includes both filing and non-filing units but excludes those that are dependents of other tax units. Tax units with negative adjusted gross income are excluded from their respective income class but are
included in the totals. For a description of expanded cash income, see
http://www.taxpolicycenter.org/TaxModel/income.cfm
(3) The income percentile classes used in this table are based on the income distribution for the entire population and contain an equal number of people, not tax units. The incomes used are adjusted for family
size by dividing by the square root of the number of people in the tax unit. The resulting percentile breaks are (in 2013 dollars): 20% $17,488; 40% $32,340; 60% $53,324; 80% $84,999; 90% $119,750; 95%
$166,406; 99% $394,734; 99.9% $2,075,547.
(4) Includes tax units with a change in federal tax burden of $10 or more in absolute value.
(5) After-tax income is expanded cash income less: individual income tax net of refundable credits; corporate income tax; payroll taxes (Social Security and Medicare); and estate tax.
(6) 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 expanded cash income.