JOINT COMMITTEE ON TAXATION September 22, 2021 D-02-21 A DISTRIBUTION OF RETURNS BY THE SIZE OF THE TAX CHANGE FOR ESTIMATED BUDGETARY EFFECTS OF SUBTITLE B AND AN AMENDMENT IN THE NATURE OF A SUBTITUTE TO THE REVENUE PROVISIONS OF SUBTITLES B, F, G, H, AND I OF THE BUDGET RECONCILIATION LEGISLATIVE RECOMMENDATIONS BY THE COMMITTEE ON WAYS AND MEANS Calendar Year 2023    INCOME  Percentage of Returns    Tax Decrease Tax ChangeTax Increase CATEGORY (2)Greater  Less than  Greater  Than $500$100-$500$100 $100-$500Than $500 Less than $10,000...............23.1%12.6%63.6% 0.7%0.1% $10,000 to $20,000.............63.5%2.2%33.4% 0.7%0.2% $20,000 to $30,000.............29.5%10.7%58.6% 0.9%0.2% $30,000 to $40,000.............24.0%3.5%70.2% 1.9%0.5% $40,000 to $50,000.............25.7%2.8%66.7% 4.0%0.7% $50,000 to $75,000.............21.7%2.7%66.8% 7.1%1.7% $75,000 to $100,000...........22.3%2.4%57.4% 13.8%4.1% $100,000 to $200,000..........27.5%2.2%35.5% 24.1%10.7% $200,000 to $500,000..........24.7%4.6%11.6% 28.0%31.1% $500,000 to $1,000,000.......2.9%0.7%0.7% 3.4%92.2% $1,000,000 and over............0.2%(4)(4) 0.1%99.6% Total, All Taxpayers...........27.9%4.4%51.0% 10.0%6.6%      Source: Joint Committee on Taxation Detail may not add to total due to rounding. (1) This table is a distributional analysis of the proposals contained in JCX-35-21 and revenue table JCX-42-21, except the following: Subtitle B: automatic contribution plans; Subtitle F: Part 1, Part 4 items 1 and 3, Part 6, and Part 7; Subtitle G: Part 3 items 1,4, and 5, Part 4 items 1 and 5-7, Part 6, and Part 7; Subtitle H: Part 3 item 2, Part 5, Part 6, and Part 7; Subtitle I: Part 2 items 7-10, Part 3, Part 4, Part 5 items 2-4, 7, 8, 11, 12, 14, 15, and 17-20. (2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exempt interest, [2] employer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] workers' compensation, [5] nontaxable Social Security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preference items, [8] individual share of business taxes, and [9] excluded income of U.S. citizens living abroad. Categories are measured at 2021 levels. (3) The categories reflecting the size of tax change are indexed for inflation. (4) Less than 0.05%.        Page 1 JOINT COMMITTEE ON TAXATION September 22, 2021 D-02-21 A DISTRIBUTION OF RETURNS BY THE SIZE OF THE TAX CHANGE FOR ESTIMATED BUDGETARY EFFECTS OF SUBTITLE B AND AN AMENDMENT IN THE NATURE OF A SUBTITUTE TO THE REVENUE PROVISIONS OF SUBTITLES B, F, G, H, AND I OF THE BUDGET RECONCILIATION LEGISLATIVE RECOMMENDATIONS BY THE COMMITTEE ON WAYS AND MEANS Calendar Year 2025    INCOME  Percentage of Returns    Tax Decrease Tax ChangeTax Increase CATEGORY (2)Greater  Less than  Greater  Than $500$100-$500$100 $100-$500Than $500 Less than $10,000...............24.3%13.1%61.7% 0.8%0.1% $10,000 to $20,000.............64.2%3.0%31.8% 0.6%0.3% $20,000 to $30,000.............29.2%12.6%56.8% 1.0%0.4% $30,000 to $40,000.............23.6%10.1%63.2% 2.5%0.6% $40,000 to $50,000.............25.6%6.5%61.5% 5.1%1.2% $50,000 to $75,000.............21.1%3.8%62.2% 10.2%2.7% $75,000 to $100,000...........21.0%2.6%49.2% 21.1%6.1% $100,000 to $200,000..........25.7%1.9%22.0% 34.5%15.9% $200,000 to $500,000..........20.9%4.3%4.7% 27.6%42.5% $500,000 to $1,000,000.......1.4%0.3%0.3% 1.3%96.6% $1,000,000 and over............0.1%(4)0.1% (4)99.8% Total, All Taxpayers...........27.1%5.7%44.6% 13.6%9.0%      Source: Joint Committee on Taxation Detail may not add to total due to rounding. (1) This table is a distributional analysis of the proposals contained in JCX-35-21 and revenue table JCX-42-21, except the following: Subtitle B: automatic contribution plans; Subtitle F: Part 1, Part 4 items 1 and 3, Part 6, and Part 7; Subtitle G: Part 3 items 1,4, and 5, Part 4 items 1 and 5-7, Part 6, and Part 7; Subtitle H: Part 3 item 2, Part 5, Part 6, and Part 7; Subtitle I: Part 2 items 7-10, Part 3, Part 4, Part 5 items 2-4, 7, 8, 11, 12, 14, 15, and 17-20. (2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exempt interest, [2] employer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] workers' compensation, [5] nontaxable Social Security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preference items, [8] individual share of business taxes, and [9] excluded income of U.S. citizens living abroad. Categories are measured at 2021 levels. (3) The categories reflecting the size of tax change are indexed for inflation. (4) Less than 0.05%.        Page 2 JOINT COMMITTEE ON TAXATION September 22, 2021 D-02-21 A DISTRIBUTION OF RETURNS BY THE SIZE OF THE TAX CHANGE FOR ESTIMATED BUDGETARY EFFECTS OF SUBTITLE B AND AN AMENDMENT IN THE NATURE OF A SUBTITUTE TO THE REVENUE PROVISIONS OF SUBTITLES B, F, G, H, AND I OF THE BUDGET RECONCILIATION LEGISLATIVE RECOMMENDATIONS BY THE COMMITTEE ON WAYS AND MEANS Calendar Year 2027    INCOME  Percentage of Returns    Tax Decrease Tax ChangeTax Increase CATEGORY (2)Greater  Less than  Greater  Than $500$100-$500$100 $100-$500Than $500 Less than $10,000...............20.9%15.5%62.4% 1.0%0.2% $10,000 to $20,000.............38.7%7.4%52.8% 0.8%0.4% $20,000 to $30,000.............7.0%13.0%77.9% 1.7%0.5% $30,000 to $40,000.............5.2%9.9%79.5% 4.4%1.0% $40,000 to $50,000.............5.9%6.3%76.3% 9.9%1.5% $50,000 to $75,000.............4.4%3.1%67.9% 21.1%3.4% $75,000 to $100,000...........3.9%1.6%35.9% 51.0%7.5% $100,000 to $200,000..........4.4%1.0%8.8% 63.7%22.1% $200,000 to $500,000..........3.2%1.7%2.1% 29.1%63.9% $500,000 to $1,000,000.......(4)(4)0.1% 0.2%99.7% $1,000,000 and over............(4)(4)(4) 0.1%99.9% Total, All Taxpayers...........8.8%5.6%48.0% 25.2%12.3%      Source: Joint Committee on Taxation Detail may not add to total due to rounding. (1) This table is a distributional analysis of the proposals contained in JCX-35-21 and revenue table JCX-42-21, except the following: Subtitle B: automatic contribution plans; Subtitle F: Part 1, Part 4 items 1 and 3, Part 6, and Part 7; Subtitle G: Part 3 items 1,4, and 5, Part 4 items 1 and 5-7, Part 6, and Part 7; Subtitle H: Part 3 item 2, Part 5, Part 6, and Part 7; Subtitle I: Part 2 items 7-10, Part 3, Part 4, Part 5 items 2-4, 7, 8, 11, 12, 14, 15, and 17-20. (2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exempt interest, [2] employer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] workers' compensation, [5] nontaxable Social Security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preference items, [8] individual share of business taxes, and [9] excluded income of U.S. citizens living abroad. Categories are measured at 2021 levels. (3) The categories reflecting the size of tax change are indexed for inflation. (4) Less than 0.05%.        Page 3 JOINT COMMITTEE ON TAXATION September 22, 2021 D-02-21 A DISTRIBUTION OF RETURNS BY THE SIZE OF THE TAX CHANGE FOR ESTIMATED BUDGETARY EFFECTS OF SUBTITLE B AND AN AMENDMENT IN THE NATURE OF A SUBTITUTE TO THE REVENUE PROVISIONS OF SUBTITLES B, F, G, H, AND I OF THE BUDGET RECONCILIATION LEGISLATIVE RECOMMENDATIONS BY THE COMMITTEE ON WAYS AND MEANS Calendar Year 2029    INCOME  Percentage of Returns    Tax Decrease Tax ChangeTax Increase CATEGORY (2)Greater  Less than  Greater  Than $500$100-$500$100 $100-$500Than $500 Less than $10,000...............21.8%15.6%61.8% 0.7%0.1% $10,000 to $20,000.............37.3%8.3%53.4% 0.7%0.3% $20,000 to $30,000.............6.5%12.1%79.7% 1.3%0.3% $30,000 to $40,000.............5.0%9.8%81.3% 3.2%0.7% $40,000 to $50,000.............6.0%5.8%79.8% 7.5%1.0% $50,000 to $75,000.............4.2%3.0%74.6% 16.2%2.0% $75,000 to $100,000...........3.9%1.6%45.4% 44.4%4.7% $100,000 to $200,000..........4.4%1.0%13.2% 66.0%15.3% $200,000 to $500,000..........3.5%2.0%4.3% 38.2%52.0% $500,000 to $1,000,000.......(4)0.3%0.4% 1.0%98.4% $1,000,000 and over............(4)(4)0.1% 0.1%99.8% Total, All Taxpayers...........8.7%5.5%51.7% 24.6%9.5%      Source: Joint Committee on Taxation Detail may not add to total due to rounding. (1) This table is a distributional analysis of the proposals contained in JCX-35-21 and revenue table JCX-42-21, except the following: Subtitle B: automatic contribution plans; Subtitle F: Part 1, Part 4 items 1 and 3, Part 6, and Part 7; Subtitle G: Part 3 items 1,4, and 5, Part 4 items 1 and 5-7, Part 6, and Part 7; Subtitle H: Part 3 item 2, Part 5, Part 6, and Part 7; Subtitle I: Part 2 items 7-10, Part 3, Part 4, Part 5 items 2-4, 7, 8, 11, 12, 14, 15, and 17-20. (2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exempt interest, [2] employer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] workers' compensation, [5] nontaxable Social Security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preference items, [8] individual share of business taxes, and [9] excluded income of U.S. citizens living abroad. Categories are measured at 2021 levels. (3) The categories reflecting the size of tax change are indexed for inflation. (4) Less than 0.05%.        Page 4 JOINT COMMITTEE ON TAXATION September 22, 2021 D-02-21 A DISTRIBUTION OF RETURNS BY THE SIZE OF THE TAX CHANGE FOR ESTIMATED BUDGETARY EFFECTS OF SUBTITLE B AND AN AMENDMENT IN THE NATURE OF A SUBTITUTE TO THE REVENUE PROVISIONS OF SUBTITLES B, F, G, H, AND I OF THE BUDGET RECONCILIATION LEGISLATIVE RECOMMENDATIONS BY THE COMMITTEE ON WAYS AND MEANS Calendar Year 2031    INCOME  Percentage of Returns    Tax Decrease Tax ChangeTax Increase CATEGORY (2)Greater  Less than  Greater  Than $500$100-$500$100 $100-$500Than $500 Less than $10,000...............22.6%15.7%61.1% 0.6%0.1% $10,000 to $20,000.............35.4%9.9%53.8% 0.7%0.2% $20,000 to $30,000.............6.2%11.3%81.0% 1.2%0.3% $30,000 to $40,000.............5.0%9.8%81.9% 2.8%0.5% $40,000 to $50,000.............5.9%6.6%80.2% 6.7%0.6% $50,000 to $75,000.............4.1%3.9%77.0% 13.8%1.3% $75,000 to $100,000...........3.8%2.5%49.3% 41.3%3.1% $100,000 to $200,000..........4.4%2.4%15.3% 66.6%11.3% $200,000 to $500,000..........4.6%3.7%5.0% 41.6%45.1% $500,000 to $1,000,000.......1.2%0.5%0.3% 0.8%97.2% $1,000,000 and over............1.5%0.4%0.4% 0.5%97.3% Total, All Taxpayers...........8.6%6.3%53.1% 24.2%7.8%      Source: Joint Committee on Taxation Detail may not add to total due to rounding. (1) This table is a distributional analysis of the proposals contained in JCX-35-21 and revenue table JCX-42-21, except the following: Subtitle B: automatic contribution plans; Subtitle F: Part 1, Part 4 items 1 and 3, Part 6, and Part 7; Subtitle G: Part 3 items 1,4, and 5, Part 4 items 1 and 5-7, Part 6, and Part 7; Subtitle H: Part 3 item 2, Part 5, Part 6, and Part 7; Subtitle I: Part 2 items 7-10, Part 3, Part 4, Part 5 items 2-4, 7, 8, 11, 12, 14, 15, and 17-20. (2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exempt interest, [2] employer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] workers' compensation, [5] nontaxable Social Security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preference items, [8] individual share of business taxes, and [9] excluded income of U.S. citizens living abroad. Categories are measured at 2021 levels. (3) The categories reflecting the size of tax change are indexed for inflation.          Page 5

JCT Estimates Tax Return Changes From Reconciliation Legislation

JCT Estimates Tax Return Changes From Reconciliation Legislation 

U.S. Joint Committee on Taxation

The Joint Committee on Taxation released a document September 22 estimating the tax return changes from the revenue provisions of the House Ways and Means Committee chair’s substitute to budget reconciliation recommendations.

<a href="/lr/resolve//79g96">Tracking the 2021 Tax Overhaul Proposals</a>

The Joint Committee on Taxation released a document September 22 estimating the tax return changes from the revenue provisions of the House Ways and Means Committee chair’s substitute to budget reconciliation recommendations.

The Joint Committee on Taxation released a document September 22 (D-02-21) estimating the tax return changes from the revenue provisions of the House Ways and Means Committee chair’s <a href="/lr/resolve//78493">substitute</a> to budget reconciliation recommendations. The JCT’s report, covering calendar years 2023, 2025, 2027, 2029, and 2031, estimated that the total percentage of taxpayers who receive tax decreases of greater than $500 would decrease from roughly 28 percent in 2023 to roughly 9 percent in 2031. However, the total percentage of taxpayers with tax decreases between $100 to $500 would rise from 4.4 percent in 2023 to 6.3 percent in 2031, with taxpayers in the lower income brackets seeing larger decreases. The total percentage of taxpayers with tax increases exceeding $500, according to the JCT report, would rise from 6.6 percent in 2023, reach the highest percentage at 12.3 in 2027, and come to 7.8 percent in 2031. Taxpayers with income brackets between $500,000 to $1 million or more are estimated to see the largest tax increases. The total percentage of taxpayers with tax increases between $100 to $500 are estimated to rise from 10 percent in 2023 to 24.2 percent in 2031.  Lastly, the total percentage of taxpayers with tax changes of less than $100 is estimated to be at 51 percent in 2023, fall to 44.6 percent in 2025, and reach 53.1 percent in 2031.

The Joint Committee on Taxation released a document September 22 (D-02-21) estimating the tax return changes from the revenue provisions of the House Ways and Means Committee chair’s substitute to budget reconciliation recommendations. The JCT’s report, covering calendar years 2023, 2025, 2027, 2029, and 2031, estimated that the total percentage of taxpayers who receive tax decreases of greater than $500 would decrease from roughly 28 percent in 2023 to roughly 9 percent in 2031. However, the total percentage of taxpayers with tax decreases between $100 to $500 would rise from 4.4 percent in 2023 to 6.3 percent in 2031, with taxpayers in the lower income brackets seeing larger decreases. The total percentage of taxpayers with tax increases exceeding $500, according to the JCT report, would rise from 6.6 percent in 2023, reach the highest percentage at 12.3 in 2027, and come to 7.8 percent in 2031. Taxpayers with income brackets between $500,000 to $1 million or more are estimated to see the largest tax increases. The total percentage of taxpayers with tax increases between $100 to $500 are estimated to rise from 10 percent in 2023 to 24.2 percent in 2031.  Lastly, the total percentage of taxpayers with tax changes of less than $100 is estimated to be at 51 percent in 2023, fall to 44.6 percent in 2025, and reach 53.1 percent in 2031.