Tax Policy Center Analyzes Tax Proposals in Obama Budget

 

Tax Policy Center

 

 

2013 BUDGET

 

Tax Proposals

 

 

 

The administration assumes a baseline that permanently extends the 2001-03 tax cuts for all taxpayers, makes the estate tax permanent with 2011 parameters, and indexes the parameters for the alternative minimum tax (AMT) from their 2011 levels.

This analysis does not use the administration's baseline. Most of our distribution tables compare the effects of tax proposals separately against both a current law baseline and a current policy baseline. The former assumes that the 2001-03 tax cuts expire in 2013 as scheduled (including changes in the estate tax) and that the AMT exemption reverts to its permanent value after 2012. Our current policy baseline is similar to the administration baseline but differs in significant ways. It assumes extension of all temporary provisions in place for calendar year 2012 except the payroll tax cut. In particular, it makes the 2001 and 2003 individual income tax cuts permanent, indexes the 2011 AMT exemption level for future years, extends certain provisions in the 2009 stimulus bill,^* makes 2011-12 estate tax law permanent with a $5 million exemption and 35 percent tax rate, and continues expiring tax provisions that Congress has regularly extended.

For each tax proposal, a separate web page describes current law, the proposed change, and its distributional effects. We do not consider the long-term effects on the economy.

Because some of the tax proposals are not indexed for inflation, their real effects would change over time. The value of most unindexed proposals would decline in real terms, either because their values are fixed in nominal dollar amounts or because nominal phaseout thresholds would affect more taxpayers. A more complete discussion of the impact of indexing appears at the end of this document.

TPC will update this analysis as the budget moves through Congress.

The Tax Policy Center has examined the key tax proposals in President Obama's 2013 budget. Separate discussions below describe each of the proposals including current law, proposed changes, and, when appropriate, the distributional effects. The budget as presented by the president lacks complete details on many of the tax proposals. Some provisions had virtually no detail, and our discussion of them is necessarily limited.

The budget assumes a baseline in which the 2001-03 tax cuts are permanently extended for all taxpayers, the estate tax applies at its 2012 level, and parameters for the alternative minimum tax (AMT) are permanently indexed for inflation from their 2011 levels. Those provisions would reduce revenues (or increase spending) by $4.5 trillion from 2013 through 2022 (table 1).¹

 

Table 1. The Budget Impacts of the President's Tax Policies,

 

2013-2022

 

 

 

 

Table 2. The President's Tax Policies, 2013-2022

 

 

 

 

Table 3. Comparing the President's Tax Policies to Current Policy,

 

2013-2022

 

 

 

A collection of distributional tables shows how the president's tax proposals would affect taxpayers at different income levels, relative to both current law and current policy baselines. Detailed tables examine individual proposals and combinations of proposals. Note that the distributional effects of the proposals would change over time because many of them are not indexed for inflation. As a result, some of the proposed tax cuts would benefit fewer taxpayers in future years, and the value of some of the cuts would shrink. Even provisions that are indexed for inflation would affect more or fewer taxpayers over time because of changes in real income.

Relative to current law, the entire package of proposals would reduce taxes in 2013 for nearly three-quarters of all households and raise taxes for about 6 percent (see table). People at both ends of the income distribution would be least likely to see their taxes go down: only about 30 percent of both those in the bottom quintile (20 percent of tax units) and those in the top 1 percent would see their taxes go down. At the same time, 71 percent of those in the top 1 percent would face a tax increase, compared with just 1 percent of those in the next-to-top quintile (60th through 80th percentiles). On average, taxes would drop an average of more than 1,300 in 2013. Among income groups, only the top 1 percent would see an average tax increase -- more than $18,000.

The story is quite different measured against a current policy baseline that is essentially the tax law in place for 2011 (see table). Against that baseline, only 12 percent of taxpayers would see their taxes go down in 2013 under the president's proposals while more than a quarter would experience a tax increase. The average federal tax bill would rise by about $800. People in the lowest income quintile would be least affected -- less than 15 percent would experience any tax change -- while virtually everyone in the top 1 percent (97 percent) would see their taxes go up by an average of almost $98,000, cutting their average after-tax income by roughly 8 percent.

This analysis is preliminary and we will update it as more information becomes available and as the budget works its way through Congress.

Tax Provisions Affecting Only High-Income Taxpayers

During the 2008 campaign, President Obama promised that he would raise taxes only on households with the highest income -- over $250,000 for married couples and over $200,000 for single people. In keeping with that promise, he proposes to increase taxes for those taxpayers by allowing the 2001-03 tax cuts to expire as scheduled in 2013 and limiting the value of itemized deductions to 28 percent.

Compared against current law, these provisions would affect less than 5 percent of households, increasing taxes for about five-sixths of them and cutting taxes for the rest. Taxpayers at the very top of the income distribution would be much more likely to face tax increases: among those in the top 1 percent, more than 85 percent would see their tax bills rise by an average of about $22,000 while 2 percent would pay an average of about $400 less tax.

The net two sections discuss in greater detail the president's tax proposals affecting only high-income taxpayers.

Distribution Tables

Tax Provisions Affecting Primarily High-Income Taxpayers

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (TRUIRJCA) extended the 2001 and 2003 tax cuts through 2012, but nearly all of them are now scheduled to expire in 2013. Unless Congress acts, the individual income tax will return to its pre-2001 level (except for a few permanent changes). In defining the baseline for his budget, the president assumes that, rather than ending in 2013, the tax cuts will become permanent for all households. Relative to that baseline, the president would raise taxes on couples with income levels over $250,000 and above $200,000 for single filers (both thresholds in 2009 dollars and indexed for inflation in subsequent years).³ Specifically, for those taxpayers, the president would:

• restore the top two tax rates to their pre-2001 levels of 36 percent and 39.6 percent and create a new tax bracket between the next-to-highest rate and the one immediately below it to prevent a rate increase on income below the thresholds;

• reinstate the personal exemption phaseout and the limitation on itemized deductions;

• return the tax rate on long-term capital gains to 20 percent for taxpayers in the top two tax brackets; and

• revert to taxing all dividends at ordinary rates for taxpayers in the top two tax brackets.

Those tax increases would allow marginal tax rates at the highest income levels to return to rates scheduled after 2012 under current law. Some high-income taxpayers with long-term capital gains would pay more tax because the 20 percent rate exceeds the 18 percent rate that would apply to gains on assets held more than five years and because the phaseout of personal exemptions would begin at a lower income than under current law.

• Allow top two rates to rise to 36% and 39.6% after 2012

• Increase the 33 percent tax rate to 36 percent only for joint filers with adjusted gross income over $250,000 ($200,000 for single filers) in 2013.

 

2013 Tax Rates, Standard Deduction, and Personal Exemption under

 

Alternative Baselines and as Proposed in the 2013 Budget

 

 

 

• Reinstate personal exemption phaseout and limitation on itemized deductions

In its full form, the personal exemption phaseout (PEP) reduces the value of each personal exemption from its full value by 2 percent for each $2,500 or part thereof above specified income thresholds that depend on filing status. Personal exemptions are thus fully phased out over a $122,500 range (see table).

The limitation on itemized deductions -- known as Pease after the congressman who introduced it -- cuts itemized deductions by 3 percent of adjusted gross income above specified thresholds but not by more than 80 percent. The income threshold -- projected to be $174,450 in 2013 ($87,225 for married couples filing separately) -- is indexed for inflation.

 

Income Ranges for Personal Exemption Phaseout (PEP) and

 

Limitation on Itemized Deductions (Pease), 2013

 

 

 

Additional Resources

Tax Policy Briefing Book: Income Tax Issues: How do phaseouts of tax provisions affect taxpayers?

• Allow resumption of 20 percent rate on long-term capital gains for high-income taxpayers

The higher rate on capital gains could induce taxpayers to hold on to assets with accrued gains and therefore realize fewer taxable gains. If people expect the president's budget to go into effect, they may also change the timing of gains realizations. Anticipation of higher taxation of long-term gains after 2012 would lead affected taxpayers to realize more gains in 2011 and 2012 and fewer in 2013 and subsequent years.

• Allow the tax rate on qualified dividends to return to ordinary rates for high-income taxpayers

The higher rates on capital gains and dividends would increase marginal tax rates on capital income for high-income taxpayers and could reduce private saving. It also might cause corporations to accelerate some dividend payments forward into 2012 to take advantage of the current lower rate.

Additional Resources

Tax Policy Briefing Book: Key Elements of the U.S. Tax System: Capital Gains and Dividends.

Limit the Value of Certain Tax Expenditures

Taxpayers may reduce their taxable income by excluding particular kinds of income from taxable income and by subtracting either the appropriate standard deduction or their itemized deductions for medical expenditures, state and local taxes, mortgage interest, charitable contributions, and other allowed expenses. Because both exclusions and deductions reduce taxable income, their effect on tax liability depends on the taxpayer's tax bracket. For example, exclusions or itemized deductions totaling $10,000 reduce taxes for a person in the 15 percent bracket by $1,500 (15 percent of $10,000) but cut taxes by $3,500 for a person in the 35 percent bracket (35 percent of $10,000).

The rationale for some itemized deductions -- such as the deduction for extraordinary medical expenses and, arguably, state and local income taxes -- is that the deductible expenses reduce the taxpayer's ability to pay and should therefore not count in taxable income. But itemized deductions also subsidize certain behaviors, such as charitable giving and investment in housing, and help states and localities by reducing the net cost to taxpayers of paying higher state and local income, property, and (in some states) sales taxes.

Reasons for excluding particular kinds of income from taxation are more uncertain. The exclusion of interest on state and municipal bonds subsidizes the cost of borrowing for governments issuing the bonds but more direct subsidies would make more sense. Employer-paid health insurance premiums, like many benefits received through employment, are excluded for primarily historical reasons, though they often make up a sizeable share of compensation. However, that exclusion, like the exclusion of contributions to retirement plans, does encourage people to get health insurance coverage or save for retirement. In none of those cases, however, is there a strong rationale for giving larger tax breaks to higher-income taxpayers.

The president proposes limiting the value of itemized deductions and specified exclusions to no more than 28 percent starting in 2013.⁸ That limit would increase taxes for taxpayers whose tax rate exceeds 28 percent and reduce for them the incentives that the deductions provide. In 2013, the limitation would apply to taxpayers in the 36 percent and 39.6 percent brackets. The administration estimates that the proposal would increase revenues by about $580 billion through 2022.⁹

This change would apply after Pease (the limitation on itemized deductions) and would therefore interact with it. The 28 percent cap on the value of deductions combined with Pease could limit the tax savings from itemizable expenses to as little as 5.6 percent of those expenses -- 28 percent of the 20 percent minimum deduction allowed under Pease. That value is just one-seventh of the 39.6 percent maximum tax savings that taxpayers in the top tax bracket would get if neither Pease nor the 28 percent limitation were imposed.

By reducing the after-tax cost of allowed expenditures, itemized deductions encourage certain behavior. For example, a taxpayer in the 35 percent bracket effectively pays only 65 cents for each dollar she gives to qualified charities because giving a dollar reduces her tax bill by 35 cents (35 percent of the deductible one-dollar donation). Many studies find that this lower aftertax price of giving increases charitable giving, although the extent of the increase is uncertain. But the incentive varies considerably among taxpayers; taxpayers in the 35 percent bracket pay 65 cents for each dollar they give to charities, taxpayers in the 15 percent bracket pay 85 cents per dollar, and the 65 percent of taxpayers who claim the standard deduction receive no subsidy at all for charitable giving. Other itemized deductions have similar incentive effects. For example, people may buy more or better housing because the deductibility of mortgage interest and property taxes reduces their after-tax costs. Limiting the value of deductions to 28 percent would increase the after-tax cost of charitable giving and other itemizable expenses for high-income taxpayers and would therefore reduce the amount of those activities they would undertake.

Exclusions can similarly affect taxpayer behavior by eliminating income tax on particular kinds of income. Investors will accept lower interest payments on tax-exempt municipal bonds or demand more tax-exempt employment benefits rather than taxable cash pay. The former shifts part of the cost of state and local government borrowing from citizens of those jurisdictions to taxpayers in general, while the latter encourages overconsumption of benefits excluded from tax. While both subsidizing those borrowing costs and encouraging workers to obtain particular benefits may have social value, doing so as we now do through the federal income tax gives the largest benefits to taxpayers with the highest income.

The 2005 President's Advisory Panel on Federal Tax Reform¹⁰ proposed replacing itemized deductions with a 15 percent credit on most itemizable expenditures. That change would give all taxpayers the same tax savings for a given deductible expenditure, severing the connection between tax rates and the value of deductions.¹¹ It would recognize the public value attached to particular expenditures but remove those expenditures from the determination of ability to pay. Similar limitations applying to home mortgage interest and charitable contributions were included in the 2010 debt reduction plans of the President's Fiscal Commission and the Bipartisan Policy Center.

The president's proposal would limit the value of deductions and specific exclusions for about one-seventh of taxpayers in the top income quintile in 2013, raising their taxes by an average of more than $10,000, relative to current law. Nearly 85 percent of taxpayers in the top 1 percent would pay more tax, an average increase of about $24,000.

Distribution Tables

Limit the value of itemized deductions to 28 percent

Tax Policy Briefing Book: Income Tax Issues: What is the difference between tax deductions and tax credits?

President's Advisory Panel on Federal Tax Reform, Final Report, November 2005.

"Limit the Tax Benefit of Itemized Deductions to 15 Percent," Congressional Budget Office, Reducing the Deficit: Spending and Revenue Options, March 2011, p. 151.

Extend the 2001 and 2003 Tax Cuts for Taxpayers at Incomes below Certain Thresholds

The 2001 and 2003 tax acts reduced tax rates on ordinary income, long-term capital gains, and qualified dividends; mitigated marriage penalties; expanded the child tax credit and the child and dependent care tax credit; and phased out the limitation on itemized deductions and the phaseout of personal exemptions. All of those changes were originally scheduled to sunset at the end of 2010, but the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 extended the sunset to the end of 2012. Under current law, the individual income tax will now revert to its pre-2001 levels in 2013. The president proposes to extend those tax cuts for low-and middle income tax units (married couples with income below $250,000, singles under $200,000, both 2009 values, indexed for inflation). The following table shows how the president's proposals would affect various tax provisions.¹²

 

Individual Income Tax Parameters in 2013 Under Current Law and

 

Under the 2013 Budget Proposals

 

 

 

Under current law, individual taxpayers may be subject to an alternative minimum tax if their tentative AMT liability exceeds their regular income tax liability. Tentative AMT liability is computed using a different rate schedule and different tax base than the regular income tax. The AMT owed is equal to the difference (if any) between tentative AMT liability and liability under the regular income tax.

Since 2001, Congress has repeatedly increased the individual AMT exemption on a temporary basis to prevent too many taxpayers from being subject to the tax. The temporary legislation has also allowed taxpayers to use personal nonrefundable tax credits, including credits for child care and higher education, to reduce tentative AMT liability. Absent these stopgap measures, sometimes called "the AMT patch," the exemption would stay at the nominal levels established in 1993, personal nonrefundable credits would be limited or disallowed by the AMT, and the AMT would affect more than a third of all taxpayers in 2012.

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 extended the AMT patch through 2011, setting the AMT exemption levels in 2011 at $48,450 for single and head-of-household filers, $74,450 for married people filing jointly and qualifying widows or widowers, and $37,225 for married people filing separately. The AMT has two tax rates: 26 percent on the first $175,000 of income above the exemption and 28 percent on incomes above that amount. The AMT exemption phases out at a 25 percent rate between $117,650 and $311,450 for singles and heads of household, between $156,850 and $454,650 for married couples filing jointly, and between $78,425 and $227,325 for married couples filing separately. For affected taxpayers, the phaseout creates effective AMT tax rates of 32.5 percent -- 125 percent of 26 percent -- and 35 percent -- 125 percent of 28 percent.

The "adjusted baseline" used in the president's budget in place of current law assumes that the 2011 AMT parameters -- exemptions, rate brackets, and phaseout thresholds -- are permanently extended and indexed after 2011 for inflation. As a result of this baseline assumption about changes in the AMT, no revenue loss is shown in the president's budget for an AMT patch. Relative to current law, however, the president's proposed AMT patch would reduce revenues by $1.9 trillion between fiscal years 2013 and 2022.

The assumed changes to the AMT would remove a significant source of uncertainty about taxation and prevent inflation from pushing large numbers of taxpayers onto the AMT in future years. Most benefits of the assumed changes would go to taxpayers with relatively high incomes because they incur the bulk of the additional tax liability levied by the AMT.

Additional Resources

Tax Topics: Individual Alternative Minimum Tax.

Tax Policy Briefing Book: Alternative Minimum Tax.

Extend the Payroll Tax Cut through 2012

Funds to pay Social Security benefits come from two sources, the Federal Insurance Contributions Act (FICA) imposed on workers and the Self Employment Contributions Act (SECA) imposed on people who run their own businesses. Workers and their employers each pay 6.2 percent of wages up to a maximum, $110,100 in 2012. Self-employed workers pay 12.4 percent of wages up to the same maximum, equal to the combined employee-employer rate.

The Tax Relief Unemployment Insurance Reauthorization and Job Creation Act of 2010 reduced both FICA and SECA tax rates by 2 percentage points for 2011 in order to increase workers' take-home pay and thus stimulate the economy through higher consumer spending. In December 2011, Congress extended the rate cut for two additional months through February 2012.

In the 2013 budget, the president proposed further extending the rate cut through all of 2012 at an estimated cost of $94 billion in fiscal years 2012 and 2013. Congress subsequently enacted that extension in the "Middle Class Tax Relief and Job Creation Act of 2012."

Extension of the tax cut through 2012 will reduce taxes for nearly three-quarters of tax units by an average of about $770.¹³ Average tax savings rise with income from an average of about $140 for tax units in the bottom quintile with workers to nearly $1,900 for those in the top quintile.

Distribution Tables

Ten-Month Extension the Payroll Tax Cut (March-December 2012)

Tax Topics: Payroll Taxes

Tax Carried ("Profits") Interests as Ordinary Income

A partner may receive an interest in future profits of the partnership (i.e., a "carried" or "profits" interest) as compensation for performing services for the partnership. If the partnership earns a capital gain, the partner reports his share -- the carried interest -- as capital gain income. Income from capital gains is taxed at rates up to 15 percent (20 percent after 2012), whereas ordinary income is subject to marginal rates up to 35 percent (39.6 percent after 2012). In addition, income from the performance of services is generally subject to self-employment tax.

Under the president's budget proposal, a partner's share of income from an "investment services partnership interest" (ISPI) would be taxed as ordinary income, regardless of the character of the income at the partnership level. Partners would be required to pay self-employment taxes on income from an ISPI. If a partner sells an ISPI, the gain would be taxed as ordinary income, not as a capital gain. Income that a partner earns from capital invested in the partnership and gain on the sale of an ISPI would not be recharacterized, provided that the partnership reasonably allocates income across invested capital and carried interests. A partnership would be considered an investment partnership if substantially all of its assets are investment-type assets (securities, real estate, etc.). The administration estimates that the provision would raise $13.5 billion through 2022.

Proponents argue that income from an ISPI should be treated as ordinary income on the grounds that, for recipient partners, it represents compensation for services, not a return on investment.

Opponents of changing current tax treatment argue that these partners are entitled to capital gain treatment under the general rules for taxing partnerships in which the characteristics of a partnership's income (either ordinary income or capital gains) flow through to partners. The difference, however, is that these partners do not purchase their partnership shares, but have instead received their interests as a form of compensation for services. No income tax is paid by these partners on the value of these carried interests when they are received. A carried interest therefore represents a form of deferred compensation rather than a share in the partnership's capital gains income.

The treatment most consistent with similar transactions would tax the estimated value of the partnership interest when received as ordinary income and subsequent profits as capital gains. This approach would treat the manager in the same manner as others who are compensated with shares or other investment interests. However, the value of a carried interest at the time it is received would be difficult in practice to estimate accurately.

Additional Resources

Tax Policy Briefing Book: Business Taxation: What is carried interest and how should it be taxed?

Tax Policy Briefing Book: Business Taxation: What are the options for reforming the taxation of carried interest?

Two and Twenty: Taxing Partnership Profits in Private Equity Funds, Victor Fleischer, New York University Law Review, 2008.

Taxing Partnership Profits as Compensation Income, Michael L. Schler, Tax Notes, May 28, 2008.

Expand the Child and Dependent Care Tax Credit

The child and dependent care tax credit (CDCTC) provides a credit of between 20 and 35 percent of up to $3,000 ($6,000 for two or more children) in child care expenses for children under age 13 whose parents work or go to school. Families with income below $15,000 qualify for the 35 percent credit. That rate falls by 1 percentage point for each additional $2,000 of income (or part thereof) until it reaches 20 percent for families with income of $43,000 or more. The credit is nonrefundable -- that is, it can only reduce a family's income tax liability to zero; any additional credit is lost.

 

Maximum Childcare Credit for Families with One Child 2011-2012,

 

2013, and President's Proposal

 

 

 

Absent further extension by Congress, the CDCTC will revert to its pre-EGTRRA maximum credit rate of 30 percent for families with income under $10,000. That rate would fall by 1 percentage point for each additional $2,000 of income until it reaches 20 percent for families with income of $28,000 or more. In addition, the maximum expenditures for which taxpayers can claim the credit will decrease from $3,000 to $2,400 (from $6,000 to $4,800 for two or more children). The maximum credit would thus drop from $1,050 ($2,100 for two or more children) to $720 ($1,440).

President Obama proposes to make permanent both the maximum 35 percent credit rate and the $3,000 maximum for creditable expenses ($6,000 for two or more children). He would also permanently increase to $75,000 the income threshold above which the credit rate starts to phase down beginning in 2012. That rate would decrease by 1 percentage point for each $2,000 of income (or part thereof) over that threshold until it hits a minimum of 20 percent for families with income over $103,000. Relative to 2011 law, for families with income between $43,000 and $75,000, the maximum credit would increase from $600 to $1,050 (from $1,200 to $2,100 for families with two or more children). Families with income between $15,000 and $43,000 or between $75,000 and $103,000 would see smaller increases in the maximum credit they could claim.

The credit offsets part of the cost of caring for young children or other qualifying dependents while parents work or attend school. For workers, the credit effectively increases the net gain from work, which could boost their willingness to seek employment. That effect would only apply to the secondary worker in married couples since both parents in a couple must work or be in school in order to qualify for the credit. Because the credit is not refundable, however, it provides little or no benefit to low-income families -- those most likely to react to a credit change. These families receive little or no benefit, regardless of the credit rate. Expanding the credit would cost an estimated $10.2 billion over 10 years.

Additional Resources

Tax Policy Briefing Book: Taxation and the Family: How does the tax system subsidize child care expenses?

Quick Facts: Child and Dependent Care Tax Credit (CDCTC).

Extend the Earned Income Tax Credit for Larger Families

The economic stimulus act ("American Recovery and Reinvestment Act of 2009") increased the earned income tax credit rate for working families with three or more children from 40 percent to 45 percent in 2009 and 2010. The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 subsequently extended that increase for two years and consequently increased the maximum credit for families with three or more children from $5,236 to $5,891 in 2011. The act also increased the phaseout income levels for all married couples filing a joint tax return (regardless of the number of children) to $5,210 above the thresholds for single filers in 2011. The president proposes to make both changes permanent and to index for inflation the $5,210 higher phaseout threshold for married couples filing jointly. This proposal repeats a proposal made in the prior budget.

The higher credit rate for larger families could induce them to work more, although research suggests any impact would be small. Lengthening the phaseout range would change which families face higher marginal tax rates because of the phaseout, but have only small effects on overall work effort. The main effect of the proposal would be to increase after-tax incomes of affected families. The provision would cost an estimated $14 billion over the next decade.

Additional Resources

Tax Policy Briefing Book: Taxation and the Family: What is the Earned Income Tax Credit?

Stimulus Act Report Card: Increase in Earned Income Tax Credit

Simplify the rules for claiming the EITC for workers without qualifying children

The Earned Income Tax Credit (EITC) provides a wage subsidy that varies based on number of children and marital status. Although almost all EITC benefits accrue to workers with children, workers without a qualifying child (who may or may not be parents) can qualify for a small credit. In 2012, the maximum credit for a family with children could be as high as $5,891 while the maximum credit available to a worker without a qualifying child is set at $475.

Individuals living with qualifying children -- even if they are unable to claim that child for their own EITC -- are barred from claiming the EITC for workers without children. This happens, for example, when an uncle lives with his sister whose child qualifies her for the EITC. Under current law, the uncle may not claim the credit because he lives with a child whom someone else in the household may claim. The administration proposes to eliminate this provision and thus simplify the EITC eligibility criteria for workers without children.

Complexity drives much of the criticism of the EITC and results in errors related to claiming the credit. This simplification would likely reduce error rates associated with the EITC, though it would also decrease some targeting of the credit. The provision is expected to cost $5.4 billion over the next 10 years.

Extend the American Opportunity Tax Credit

The economic stimulus act ("American Recovery and Reinvestment Act of 2009") established and the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 extended the "American Opportunity" tax credit (AOTC) as a replacement for the Hope credit through 2012. The president proposes to make the AOTC permanent and index for inflation both the maximum expenditures eligible for the credit and the income thresholds above which the credit phases out, beginning after 2012. This proposal is identical to one made in the 2012 budget.

The AOTC is a partially refundable tax credit equal to 100 percent of the first $2,000 plus 25 percent of the next $2,000 spent on tuition, fees, and course materials during each of the first four years of postsecondary education for students attending school at least half time. The maximum credit is $2,500 a year. In contrast, the Hope credit was available for only the first two years of postsecondary education and was not refundable. As was the case for the Hope credit, taxpayers may not claim the AOTC for any expenses paid using funds from other tax-preferred vehicles such as 529 plans and Coverdell Savings Accounts. Each student in a household may claim the AOTC, the lifetime learning credit, or the deduction for tuition expenses in a given year -- but not more than one of them. All students in the same home need not choose the same tax benefit. If the budget proposal does not pass, the Hope credit would return in 2012, after the expiration of the AOTC.

Forty percent of the AOTC is refundable, which makes it available to households with little or no tax liability. The maximum refundable credit is $1,000 (indexed for inflation), 40 percent of the $2,500 maximum total credit.

The credit phases out evenly for married couples filing joint tax returns with income between $160,000 and $180,000 and for others with income between $80,000 and $90,000. Couples with income above $180,000 and others with income above $90,000 may not claim the credit. The president proposes to index the phaseout thresholds for inflation starting after 2012.

The larger, refundable credit would continue to extend educational assistance to low-income students, making it easier for them to afford college and thus encouraging attendance. Indexing both the credit and the phaseout ranges would maintain the real value of the credit over time. However, because the cost of higher education has risen much faster than the overall inflation rate, the credit would still likely cover a smaller share of education costs in future years. The credit's phaseout boosts marginal tax rates for affected taxpayers and could discourage work effort for some students or parents. Because most students qualify for the credit, colleges might react by raising tuition, thereby shifting some of the benefits from students receiving the credit to colleges and, the case of public institutions, to state taxpayers. Extending the credit would cost an estimated $137.4 billion over the next ten years.

Additional Resources

Stimulus Act Report Card: "American Opportunity" Tax Credit.

Tax Topics: Education Tax Incentives.

"American Opportunity Tax Credit: Questions and Answers"

Require Automatic Enrollment in IRAs and Enhanced Small Employer Startup Credit

The president proposes to establish automatic enrollment in IRAs for employees without access to an employer-sponsored saving plan. Currently, workers who wish to contribute to an IRA must first establish the account, actively make a decision to contribute each year, transfer funds into the IRA, and decide how to invest their contributions. The president proposes to make this process automatic. Under the proposal, most employers who do not currently offer retirement plans -- except those with less than 10 employees or firms in business less than two years -- would have to enroll employees in a direct-deposit IRA account unless the worker opts out. The default contribution rate would equal 3 percent of compensation, and contributions would automatically go into standard, low-cost investments. Furthermore, the default option would be a Roth IRA, funds for which come from after-tax income and are untaxed upon withdrawal, as opposed to a deductible IRA, which is funded from pretax income and from which withdrawals are subject to income tax.

Research has shown that changing the default from an opt-in provision to an opt-out provision markedly increases worker participation in 401(k)-type plans, especially for demographic groups with traditionally low saving rates. The administration suggests that automatic enrollment in IRAs can similarly increase saving rates for workers without workplace retirement plans and help to reverse the nation's prolonged trend of low saving rates.

In conjunction with automatic enrollment, the administration proposes a modest nonrefundable credit of up to $500 for the first year and $250 for the second year for small businesses of no more than 100 employees who offer an automatic IRA arrangement. The credit will help defray the costs of automatic enrollment, and for the first six years of offering automatic enrollment, these businesses would also be eligible for another nonrefundable credit of $25 per enrolled employee, up to $250. Finally, the proposal would double the existing tax credit for small businesses starting new employee retirement plans from $500 to $1,000, available for a maximum of three years.

This proposal would cost about $15 billion through 2022. However, making Roth IRAs the default option reduces the short-term cost of automatic enrollment since the tax benefit of Roth IRAs -- and the consequent revenue loss -- does not come until workers withdraw funds in retirement. That outcome shifts much of the cost of this proposal beyond the 2013-22 budget window, causing the 10-year revenue loss to substantially understate the provision's lifetime cost.

Additional Resources

Tax Policy Briefing Book: Savings and Retirement: How might saving be encouraged for low- and middle-income households? http://www.taxpolicycenter.org/briefing-book/key-elements/savings-retirement/encourage.cfm.

Tax Topics: Pensions and Retirement Savings, http://www.taxpolicycenter.org/taxtopics/Retirement-Saving.cfm.

Benjamin H. Harris and Rachel M. Johnson, "Automatic Enrollment in IRAs: Costs and Benefits," Tax Notes, August 31, 2009, http://www.taxpolicycenter.org/UploadedPDF/1001312_auto_enroll.pdf.

Restore the Estate, Gift, and Generation-Skipping Transfer Tax Parameters to 2009 Levels

In 2001, Congress voted to phase out the estate tax gradually and repeal it entirely in 2010. The 2010 tax act reinstated the tax with an effective $5 million exemption and a 35 percent tax rate. The act also for the first time allowed portability of the exemption between spouses: any of the $5 million exemption not used when one spouse dies may be added to the exemption available for the second spouse (if he or she has not remarried). However, unless Congress acts, the estate provisions in effect prior to 2001 would be reinstated starting in 2013, Under these provisions, estates valued at $1 million or more would again be subject to tax at progressive rates as high as 60 percent, and portability would disappear.¹⁴

The Obama budget proposes permanently setting the estate tax at its 2009 level beginning in 2013: estates worth more than $3.5 million would pay 45 percent of taxable value over that threshold.¹⁵ It would also make portability permanent, allowing couples to share a combined exemption of $7 million. Relative to current law, the proposal would cost $312 billion in forgone revenues through 2021.

The Tax Policy Center estimates that about 3,600 estates will owe estate tax in 2012, representing less than 0.2 percent of deaths in that year. If the tax reverts to its pre-2001 level in 2013 as scheduled, nearly 53,000 estates -- about 2 percent of decedents -- will owe a total of more than $40 billion in tax. Making the 2009 estate tax permanent would reduce the number of estates owing tax to about 7,500 and the total tax to roughly $22 billion. All three of those versions of the tax would affect only the estates of very wealthy people.

The exemption and the tax rate have different effects on larger and smaller estates. A larger exemption prevents more estates from paying any tax but has relatively little effect on the amount of tax paid by the largest estates. In contrast, a lower tax rate reduces the tax owed for all taxable estates but saves the most money for the largest estates. Compare, for example, raising the exemption from $1 million to $3.5 million with cutting the tax rate from 55 percent to 45 percent. The exemption increase would reduce the number of taxable estates by more than 80 percent from about 53,000 to roughly 7,500 in 2013 and would save larger estates $1.38 million in tax (at a 55 percent rate). The rate cut would have a much larger effect for large estates: an estate with a taxable value of $5 million (after the exemption and any deductions) would save $500,000 while an estate worth $500 million would save $50 million in tax.

Additional Resources

Tax Topics: Estate and Gift Taxes.

Tax Policy Briefing Book: Key Elements of the U.S. Tax System: Wealth Transfer Taxes.

Modify Estate and Gift Tax Valuation Discounts and Make Other Reforms

In addition to making them permanent at their 2009 levels, the president proposes a number of changes to estate, gift, and generation-skipping transfer taxes, in part to simplify the tax and in part to reduce opportunities to avoid or minimize tax liability. In combination, the various proposals would increase revenues by $24.5 billion over ten years.

• Require consistency in value for transfer and income tax purposes

• Modify rules on valuation discounts

• Require a minimum term for grantor-retained annuity trusts

The president proposes to require that GRATs have a minimum term of 10 years, that any remainder interest have a value greater than zero, and that the annuity cannot be reduced during the GRAT's term. Those restrictions would minimize the value of the GRAT by increasing the risk that the grantor dies during its term and thus loses potential tax savings. The provision would raise revenues by about $3 billion over 10 years.

• Limit duration of generation-skipping transfer tax exemption

• Coordinate Certain Income and Transfer Tax Rules Applicable to Grantor Trusts

• Extend the Lien on Estate-Tax Deferrals Provided under Section 6166 of the Internal Revenue Code

Additional Resources

Tax Topics: Estate and Gift Taxes

Tax Policy Briefing Book: Key Elements of the U.S. Tax System: Wealth Transfer Taxes

Temporary Tax Relief to create jobs and jumpstart growth

The president proposes a number of tax provisions designed to encourage firms to expand and hire more workers. The three largest of those proposals would extend the temporary 100-percent first-year deduction for the full cost of certain property, provide a temporary 10 percent tax credit for new jobs and wage increases, and increase tax credits for energy-efficient investments.

Extend 100-percent first-year depreciation deduction for certain property

To determine taxable income, businesses subtract expenses from their receipts. While some business expenses are for items that are entirely used up during the year (e.g., materials and labor), other business expenses are for durable goods that last for many years. When durable goods are purchased, businesses do not incur an immediate cost, but instead exchange one asset (cash) for another (capital assets). The expense for investment in capital assets (e.g., tractors, computers and wind turbines) occurs over many years as the value of the investment is used up or depreciated. Under current law, businesses calculate taxable income by deducting capital costs over time according to fixed depreciation schedules.

Over the past decade, Congress has repeatedly allowed faster depreciation of certain capital assets to stimulate investment by providing a "bonus" depreciation allowance for qualifying assets in the year the asset was purchased. In 2002, Congress let businesses claim a "bonus" depreciation allowance equal to 30 percent of the cost of qualifying assets purchased between September 10, 2001, and September 11, 2002. The following year, Congress raised the deduction to 50 percent of these investments purchased after May 5, 2003, and before January 1, 2005. The 2008 economic stimulus package renewed the 50 percent deduction again, this time for investments made during 2008. The American Recovery and Reinvestment Act of 2009 renewed the 50 percent deduction for investments made during 2009.

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, enacted in December 2010, allowed business taxpayers to claim 100 percent bonus depreciation for qualifying investments placed in service between September 8, 2010 and December 31, 2011 and extended 50 percent bonus depreciation through the end of 2012. The Administration proposes to extend the temporary 100 percent bonus depreciation enacted for 2011 through the end of 2012, enhancing what would have been 50 percent bonus depreciation.

Not all property qualifies for bonus depreciation. Qualified investments include tangible property with a recovery period of 20 years or less, water utility property, certain computer software, and qualified leasehold improvement property. Furthermore, only new property qualifies for bonus depreciation.

Accelerating depreciation deductions does not increase the total amount a company can write off for a given investment. Instead, it allows businesses to deduct more of the cost now and less in the future. That reduces their current tax liabilities at the cost of higher taxes later. Since deductions today are worth more to taxable businesses than deductions in the future, the provision lowers the effective tax rate on new investment, thus making investment more attractive. Allowing a full immediate write-off reduces the effective tax rate on new investments to zero because the pretax return on the investment will be exactly equal to the after-tax return. In effect the government becomes a partner in the investment. At a 35 percent corporate income tax rate, the government effectively incurs 35 percent of the investment costs (through the tax deduction), but then later recaptures 35 percent of the returns in higher tax revenue. Lower taxes also increase business cash flow in the short term, so in addition to the incentive effect it helps cash-constrained companies raise funds.

Economic research suggests that bonus depreciation enacted in 2002 and 2003 had relatively modest effects. There are at least three reasons why. First, businesses may have expected that Congress would extend the provisions, thus blunting their incentive to speed up investment. (Such expectations would have proven correct.) Second, it takes time for businesses to make major investments, making it hard to fit them into specified time periods. Third, many businesses may have had too little income to offset with these additional tax benefits, a problem that is especially acute during economic downturns. As the economy recovers and business profitability increases, however, the incentive effect of faster write-offs also increases. But at today's low interest rates, the ability to claim deductions sooner may have less value than they will have in subsequent years when, according to both Administration and CBO projections, interest rates will be higher.

The revenue loss of the provision is front-loaded, occurring entirely within fiscal years 2012 and 2013. Bonus depreciation decreases tax payments in the year when firms claim it, but increases payments in future years (relative to current law) when firms could no longer deduct the cost of their 2012 investments. The administration estimates that the provision would lose revenue in fiscal years 2012 and 2013 and then raise revenue in every subsequent year through 2022. Revenues would fall by an estimated $35 billion in fiscal year 2012 but then increase by $31 billion during the 2013-2022 budget window, for a net revenue cost of $4 billion over the 11-year period. The present value of the cost is larger than the sum of the revenue changes if a positive discount rate is applied to future revenue flows. For example, at a 3 percent discount rate, the present value of the revenue loss through 2012 is about $8.7 billion.

Provide a Temporary 10 Percent Tax Credit for New Jobs and Wage Increases

The Administration proposes a temporary jobs credit for companies that pay more wages in 2012 than in 2011, whether because of new hires or increased wages per employee. The credit would equal 10 percent of the increase in the employer's eligible wages between 2011 and 2012. The proposal would cost $14.2 billion in fiscal year 2012 and another $18.4 billion between 2013 and 2022, for a total cost of $32.7 billion between 2012 and 2022. Most of that cost ($26.8 billion) would occur in fiscal years 2012 and 2013.

The credit would apply to no more than $5 million of the increase in a firm's qualifying wages and would therefore limit the credit to $500,000 per firm and thus focus benefits on smaller firms. In addition, the credit would apply only to wages subject to Old Age Survivors and Disability Insurance (OASDI) tax, which are capped at per employee of $110,100 in 2012. As a result, the credit would not apply to most earnings of the highest earners. For employers with no OASDI wages in 2011, the base wage for determining their increase in wages would be 80 percent of their OASDI wage base in 2012. The credit would be treated as a general business credit. A similar credit would be available for qualified tax-exempt employers.

The proposal aims to accelerate the growth in employment as the economy continues to recover from the deepest economic slump since the great depression and to help small businesses. The main way to increase jobs is to raise demand for goods and services, thereby spurring employers to hire new workers or expand hours of current employees to meet the demand. But in addition to raising demand, the credit would also reduce the cost of labor in 2012, encouraging some firms either to hire more workers permanently or to accelerate hiring into 2012.

Injecting $27 billion into the economy through this additional tax cut for businesses would provide a modest increase in aggregate demand, but its effectiveness in raising demand depends on how quickly beneficiaries spend the tax cut. That, in turn, depends on who benefits from the tax cut. To the extent the credit would go to business owners who would increase employment without the credit, it would simply raise profits. Only new hires or wage increases that would not otherwise have occurred would benefit workers. Because workers generally have lower incomes than business owners, they are likely to spend -- rather than save -- a higher share of any additional income. The credit would therefore increase demand more if it spurs new employment growth or wage increases rather than rewarding growth in employment and wages that would otherwise occurred. Higher business profits could, however, raise investments by firms who lack access to affordable credit, but these firms are unlikely to invest more unless there is demand for their products.

Reducing the cost of hiring workers could also raise employment if the lower net wage cost enables firms to reduce their prices and sell more or if it encourages them to substitute labor for capital in production. The effect of the subsidy on labor cost would be fairly modest, however. Recruiting and training costs for new workers are generally high relative to their productivity in the first year on the job, so a one-year subsidy for new workers would be a much smaller share of first-year labor costs than its share of the worker's compensation. Employers typically recover these initial costs if they retain employees longer than one year, but the wage subsidy in the proposal would cease after 2012 and not lower future labor costs. And if firms react to the subsidy by raising wages of existing employees instead of hiring new workers, there may initially be little net new job creation. (Nonetheless, tying the subsidy to total wages instead of employment does prevent the abuse that might occur if firms react to a "new jobs" subsidy by substituting part-time for full time employees.)

The purpose of making the credit incremental instead of providing a flat rate subsidy, such as a temporary payroll tax credit for all firms, is to raise the share of credits that provide an incentive for increases in employment and wages relative to credits that go to "baseline" wages that would have been paid without an incentive. By reducing subsidies to baseline wages, an incremental credit in theory raises the "bang for the buck" -- that is, the amount of additional payroll per dollar of government budgetary cost. But it is impossible to determine what firms would have been done without the credit. An incremental credit fails to provide an incentive for firms with falling demand to reduce their employment less quickly and provides benefits for firms experiencing rising demand that would hire more workers even with no tax incentive. Moreover, an incremental credit would have arbitrary and capricious distributional effects, rewarding firms and workers in expanding industries and regions of the country while failing to help those industries and firms still experiencing economic stagnation.

Limiting the credit to $500,000 per firm effectively limits most of the benefits and all of the incremental incentive to small firms. Other firms and their employees would benefit also, however, to the extent the credit raises aggregate demand and employment through increased spending by those newly employed and business owners with increased profits. But the limit would reduce the cost-effectiveness of the credit, because all firms otherwise increasing payroll by more than $5 million would receive the full maximum credit without any incentive to hire more workers.

Making the credit available only for 2012 increases in jobs could encourage some firms to hire workers late in 2012 who they otherwise would have hired in 2013. The acceleration of jobs would not directly increase employment in 2013 and beyond, but could indirectly raise jobs in 2013 if the new hires help accelerate the economic recovery by spending some of their increased wages.

The last experience the United States had with a credit for incremental employment was with the "new jobs credit" enacted at the beginning of the Carter Administration in 1977. Evaluations of that credit and how it came about found that most firms were either unaware of the credit or did not respond to it. Research based on a Department of Labor survey found that only 6 percent of firms who knew about the credit said that it prompted them to hire more workers. Firms that were aware of the credit, however, increased employment about 3 percent more than other firms. This may reflect a positive incentive effect or that firms who were planning to hire additional workers were more likely to find out about the credit.

Some economists view the 1977 experience favorably and believe an incremental refundable jobs credit that corrects some of the flaws of the 1977 law could be very a cost-effective way of creating new jobs. These analysts, however, criticize the cap on each firm's increased payroll in the 1977 legislation, which is also a feature of the current proposal.

In summary, the effect of this proposal on employment is very uncertain. In theory, an incremental jobs credit could be a cost-effective way of raising employment in the short run and some research suggests that the 1977 credit did increase jobs, although the evidence on that is far from conclusive. The effectiveness of any jobs subsidy depends greatly on both the details of the proposal, still to be finalized, and on how employers perceive its potential benefits when making hiring decisions.

Increase Tax Credits for Energy-Efficient Investments

Current law contains numerous incentives to promote investments in conservation, renewable energy and energy-saving technologies by individuals and households. Many of these incentives are temporary. The president would extend through calendar year 2012 a number of provisions scheduled to expire at the end of 2011.

The president also proposes two expansions of existing tax incentives. One proposal would raise the budgetary ceiling on tax credits for investments in qualified advanced energy projects by $5 billion over a two-year period after the date of enactment of the proposal. In general, eligible projects include those that expand facilities to generate energy from renewable resources, produce or facilitate use of electric or hybrid vehicles, support transmission and storage of renewable energy, capture and sequester carbon dioxide emissions, refine or blend renewable fuels, produce energy conservation technologies, or in other ways reduce greenhouse gas emissions. The current cap on the credits is $2.3 billion. Because the credit equals 30 percent of amounts invested, the additional $5 billion in credits would support almost $17 billion in additional qualifying investments. The Obama administration notes that many technically acceptable projects have not been funded because of the current limitation and that lifting the ceiling would allow quick deployment of new investments. The higher ceiling on tax credits would reduce revenues by $3.5 billion between fiscal years 2013 and 2022 and another $0.2 billion in fiscal year 2012. A similar proposal was included in the fiscal 2012 budget.

The president also repeats a proposal from the 2012 budget to replace the existing tax deduction for energy-efficient commercial building property expenditures with a tax credit that would offset 100 percent of creditable expenditures for property placed in service in calendar year 2013. The amount of creditable expenditures for any property would be limited based on the square footage of the property and the extent to which the investment reduces annual energy and power costs. The provision would cost about $1.7 billion through fiscal year 2022.

By reducing consumption of fossil fuels, the projects these proposals would subsidize might reduce greenhouse gas emissions that contribute to global warming, reduce U.S. dependence on insecure world oil markets, and accelerate the development of new technologies that might ultimately be viable without government subsidies. A more direct and efficient way to achieve these goals is to raise the price of greenhouse gas emissions, either by imposing an excise tax on CO2 emissions or establishing emissions limits with tradable permits ("cap and trade"), but such a direct approach is not currently politically feasible. As an alternative, subsidies to conservation and renewable energy technologies could generate net economic benefits if the investments they subsidize would be economically viable at prices that reflect the full social costs of consuming fossil fuels. The disadvantage of using subsidies is that government is not necessarily good at picking the winners among competing technologies. In addition, because many of the current tax incentives are scheduled to expire with a short time period, they may not be effective in stimulating projects with a long time horizon.

Incentives for Expanding Manufacturing and Insourcing Jobs in America

Provide New Manufacturing Communities Tax Credit

The Administration proposes to provide about $2 billion in tax credits per year between 2012 and 2014 to support investments in communities that have suffered a major job loss event, such as the happens when a military base closes or a major private employer closes or substantially reduces a facility or operating unit. Applicants for the credit would be required to consult with relevant state of local Economic Development Agencies in selecting those investments that receive a credit. The Administration proposes to work with Congress to craft the appropriate structure and selection criteria.

The rationale for this credit is that communities can be devastated by loss of a major employer and the credits would encourage investments that would help those communities recover. Because the credit is allocated, it works very much like a direct spending program, except that the money comes from the IRS in the form of a tax rebate instead from the agency determining who gets the grants.

Make the Research and Experimentation Tax Credit Permanent

Since its enactment as a temporary provision in 1981, the research and experimentation (R&E) tax credit has been extended, with modifications, 14 times. It expired on December 31, 2011. The president would reinstate the credit, make it permanent, and increase the rate of a simplified alternative credit option from 14 percent to 17 percent. Making the credit permanent (with a retroactive effective tax on January 1, 2012) would reduce federal receipts by $4.0 billion in fiscal year 2012 and another $108.5 billion over the subsequent ten years. The president has offered the same proposal in previous budgets.

The R&E credit is an incremental credit. Businesses may claim a nonrefundable credit equal to 20 percent of qualified expenditures in excess of a base amount. The base is generally determined by multiplying a company's average annual gross receipts in the previous four years by its ratio of research expenses to gross receipts during the 1984 to 1988 period. (Companies that did not exist during the base period must use a fixed ratio of 3 percent.) The base cannot be less than 50 percent of qualified research expenses for the taxable year. Firms may elect to use an alternative simplified method that sets the credit at 14 percent of the increase of current-year qualified research expenses over 50 percent of the average of the same expenses for the previous three years. If the business does not have qualified expenses in any one of the three preceding years, then the alternative credit is determined by taking 6 percent of the current year's qualified expenses. The president would increase the rate of the alternative credit from 14 to 17 percent.

The rationale for the credit is that investment in research and development often generates social returns (general knowledge or other social benefits) that exceed the private returns to investment. Without government intervention, firms would invest less in research than is socially desirable, making the economy less productive. Supporters argue that the credit provides an important stimulus to research spending. A 2008 Congressional Research Service report (cited below) found, however, that the credit delivered only a modest stimulus to domestic business research and development between 1997 and 2005. Making the credit permanent might increase its effectiveness because firms may currently forgo lengthy research projects for fear that Congress might allow the credit to lapse although, given past history, that fear could be overstated. Making the credit permanent would give a more realistic picture of its future budgetary costs; given the repeated extension of the credit, the sunset provision leads to an understatement of cost over the 10-year budget window. Critics of the credit acknowledge that some research generates social benefits not captured by the firms that perform it, but point out that not all qualifying research and development generates such excess benefits. The credit may also induce some firms to choose projects that qualify for the credit over those that generate higher returns.

Additional Resources

Congressional Research Service, Research and Experimentation Tax Credit: Current Status and Selected Issues for Congress (CRS Report RL31181, updated October 6, 2008), http://www.ncseonline.org/NLE/CRSreports/08Aug/RL31181.pdf.

Government Accountability Office, The Research Tax Credit's Design and Administration Can Be Improved (GAO-10-136) November 6, 2009, http://www.gao.gov/new.items/d10136.pdf.

Joint Committee on Taxation, Tax Incentives for Research, Experimentation, and Innovation (JCX-45-11), September 16, 2011.

United States Department of the Treasury, Investing in U.S. Competitiveness: The Benefits of Enhancing the Research and Experimentation (R&E) Tax Credit, March 25, 2011.

Tax Relief for Small Business

Eliminate Taxation of Capital Gains on Qualified Small Business Stock

The Omnibus Budget Reconciliation Act of 1993 allowed noncorporate taxpayers to exclude a portion of the capital gain on qualified small business stock from tax if the stock is held for at least five years. In general, 50 percent of the gain is excluded (60 percent for certain businesses in empowerment zones); the remaining gain is taxed at a maximum rate of 28 percent. The 2009 stimulus bill (the American Recovery and Reinvestment Act) raised the exclusion to 75 percent for stock acquired after February 17, 2009, and before January 1, 2011. The Small Business Jobs Act again raised the exclusion, to 100 percent, for stock acquired after September 27, 2010, and before January 1, 2011. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 extended the 100 percent exclusion to stock acquired before January 1, 2012.

The maximum gain eligible for the exclusion is limited to the greater of $10 million ($5 million for married taxpayers filing separately) less any gain reported on prior tax returns, or 10 times the taxpayer's cost basis (purchase price plus fees).

For stock acquired before September 28, 2010 or after December 31, 2011, a portion of the excluded gain is an AMT preference item (that is, it is added to the AMT measure of income and thus subject to the alternative tax). The AMT preference is 28 percent of the excluded gain on stock acquired after December 31, 2011, and 42 percent on stock acquired before 2001.

To qualify as a small business, the corporation may not have gross assets of $50 million or more at issuance and may not be an S corporation. The business must also meet certain active trade or business requirements. As a result, small businesses in the service, hospitality, farming, finance, insurance, and mineral extraction sectors generally do not qualify for special treatment.

Under current law, the exclusion for stock acquired after 2011 is 50 percent (60 percent for certain businesses in empowerment zones), and the maximum effective capital gains tax rate on qualifying small business stock is 14 percent (11.2 percent in empowerment zones). In addition, 28 percent of the excluded gain will be an AMT preference item.

The president's budget proposes to permanently exempt capital gains on qualifying small business stock acquired after December 31, 2012 -- thus reducing the effective tax rate to zero -- and to eliminate the AMT preference for the excluded portion of the gain, regardless of when the stock was acquired.

The proposal would encourage more investment in some small businesses that qualify, but could also divert capital from more productive investments in firms that do not qualify for the benefit. By eliminating the second layer of tax, it would also encourage more qualifying firms to incorporate as C-corporations. Because of holding requirements, the proposal would cost nothing through 2016 but would then reduce revenues by $8 billion through 2022. The costs would rise in future years as more investments would qualify for the exemption from tax.

Additional Resources

Tax Policy Briefing Book: Capital Gains and Dividends: How are capital gains taxed?

The Complexity of Capital Gain Taxation, TaxVox, February 24, 2009.

Double the Amount of Expensed Start-Up Expenditures.

Most costs incurred in starting a new business prior to the time it begins operating that would be deductible if the business was in operation are considered "start-up expenditures". Generally, start-up expenditures are capitalized and not deductible except as a loss when the business is sold. However, a taxpayer may elect to deduct up to $5,000 of start-up expenditures in the taxable year the business begins operations and the remainder over a 180-month period that begins in the same month as operations. The initial $5,000 deduction is phased out dollar-for-dollar by the amount start-up expenditures exceed $50,000. The Creating Small Business Jobs Act of 2010 increased the initial deduction limit to $10,000 and the phase-out threshold to $60,000 for new businesses beginning operations in 2010.

The president's budget proposes a permanent doubling of the initial deduction limit to $10,000 and increase in the phase-out threshold to $60,000 for taxable years ending on or after the date of enactment. The administration estimates that the provision would reduce revenues by $3.1 billion through 2022.

The Administration believes that this proposal would provide a stimulus to business formation and job creation.

Expand and Simplify the Tax Credit Provided to Qualified Small Employers for Non-Elective Contributions to Employee Health Insurance

A new tax credit for contributions by small employers to employees' health insurance premiums was included in the Patient Protection and Affordable Care Act (PPACA). The credit is refundable for tax-exempt small employers. In 2010-2013, the credit rate is 35 percent (25 percent for tax-exempts) and available for any health insurance purchased from an insurance company licensed under state law. Beginning in 2014 the credit rate is 50 percent (35 percent for tax-exempts) and available only for health insurance purchased through an Affordable Insurance Exchange, and only for the year the small employer first offers health insurance to its employees and the two following years. To qualify for the credit, the small employer's contribution must be uniform for all employees and be at least 50 percent of the premium, and the contribution amount is limited to the contribution rate times the average premium in the state. The credit is only available to employers with 25 or fewer full-time equivalent (FTE) employees during the taxable year, and is phased out for employers with between 10 and 25 FTE employees. In addition, the average FTE wage of employees must be no more than $50,000 and is phased out for average FTE wages between $25,000 and $50,000 (all wage amounts are indexed for inflation beginning in 2014). The phaseouts based on number of FTE employees and average FTE wage are additive.

The president's budget proposes to expand eligibility for the credit to employers with 50 or fewer FTE employees, to increase the phaseout for employers with between 20 and 50 FTE employees, and to coordinate the phaseouts for the number of FTE employees and the average FTE wage. In addition, the proposal would eliminate the requirement for uniform contributions and the limitation based on the average premium in the state. The administration estimates that through 2022 the provision would reduce revenues by $13.2 billion and increase outlays by $1.0 billion, for a total cost of $14.2 billion.

The administration believes that the proposed changes would increase utilization of the credit and participation in Exchanges, broadening risk pools, and simplify the credit.

Provide New Tax Incentives for Regional Growth

Extend and modify the New Markets Tax Credit

The New Markets Tax Credit (NMTC) was designed to stimulate the flow of capital into low-income and economically distressed areas by giving investors a tax incentive to invest in qualified Community Development Entities (CDEs). The CDEs, in turn, provide capital directly to low-income areas by investing in projects or organizations located or operating in qualified census tracts. Investors receive a tax credit equal to 5 percent of the investment amount in each of the first three years following their initial investment, and a credit equal to 6 percent of the investment amount in each of the following four years. In total, investors receive a credit equal to 39 percent of the initial investment amount. Investors are required to maintain their investment in the CDE for the entire seven-year period. If the investment isn't maintained, investors can no longer claim the credit, and income tax liabilities on the project will increase to recapture the credits previously received plus interest resulting from the underpayment of tax liability.

CDEs are certified by a branch of the Treasury, the Community Development Financial Institutions Fund (CDFI Fund), and participate in a competitive process for the right to receive tax-preferred financing. A qualified CDE is a corporation, partnership, or other entity that is engaged in the development of a low-income area, defined as a census tract with a poverty rate in excess of 20 percent, or with a median family income below the greater of the median income for metropolitan areas or statewide median income (only the latter criterion is used for non-metro areas). Qualifying CDEs must invest at least 85 percent of their tax-preferred financing in the development of a low-income community. CDEs may be community development banks, venture funds, or for-profit subsidiaries of community development corporations, among others. Through August 2011, the CDFI Fund had authorized $29.5 billion in NMTC allocation authority.

The American Recovery and Reinvestment Act (ARRA) increased the annual limit on allowable tax-preferred investment from $3.5 billion to $5 billion in 2008 and 2009 and allowed investors to claim the tax credits against the AMT in 2009.¹⁶ The NMTC expired on December 31, 2011.

The president proposes extending the NMTC for two more years through 2013. The extension would allow for the higher allocation amounts implemented under ARRA -- $5 billion per year -- and would allow the NMTC to be creditable against the AMT. The administration estimates that the provision would cost $3.4 billion through 2022.

Additional Resources

Government Accountability Office, New Markets Tax Credit: The Credit Helps Fund a Variety of Projects in Low-Income Communities, but Could Be Simplified, http://www.gao.gov/new.items/d10334.pdf.

Reform and Expand the Low-Income Housing Tax Credit

The Low-Income Housing Tax Credit (LIHTC) is the primary federal program to encourage the production of affordable rental housing for low-income households. The credit was originally enacted in the Tax Reform Act of 1986 to replace accelerated depreciation for low-income housing and made permanent in 1993. The administration projects that it will cost $39.3 billion between fiscal years 2013 and 2017.

The credit subsidizes the acquisition, construction, and rehabilitation of rental property by private developers. Developers may claim credits over 10 years equal to 70 percent of the qualified costs of a development project. The credit rate is reduced to 30 percent for projects receiving other federal subsidies or acquiring existing housing. To be eligible for credits, a project must satisfy various tests based on income of the residents and limitations on rent. State housing authorities administer the program and allocate the credits among eligible projects, subject to caps on the amounts of credit they may allocate.

The LIHTC serves a public policy goal of helping to increase the availability of affordable housing to low-income people, but some analysts have criticized it as being both complex and inefficient. Nonetheless, the credit has been popular over the years and has had bipartisan support.

The budget proposes a number of reforms and expansions the LIHTC, including: 1) encouraging mixed occupancy by allowing LIHTC-supported projects to elect a criterion employing a restriction on average income, 2) making the LIHTC beneficial to Real Estate Investment Trusts (REITs), 3) providing a 30-percent basis "boost" to properties that receive and allocation of tax-exempt bond volume cap and consume that allocation, and 4) requiring LIHTC-support housing to provide appropriate protection to victims of domestic violence. As a group, the proposals would cost $1 million in fiscal year 2012 and an additional $903 million over the subsequent decade.

The proposals have various rationalizations. The goal of the first proposal is to expand the income criteria to encourage more mixed-income housing, which is believed to help revitalize low-income communities. The second proposal seeks to expand the demand for the credit by enabling REIT shareholders to benefit from them. The third proposal seeks to increase incentives to invest in preservation projects, which now receive only a 30 percent credit. The fourth proposal seeks to ensure that buildings receiving federal subsidy through the LIHTC provide reasonable protections for victims of domestic abuse.

Designate Growth Zones

The Internal Revenue Code contains various targeted incentives to encourage the development of particular geographic regions, including empowerment zones and the Gulf Opportunity (GO) Zone. There are currently 40 empowerment zones -- 30 in urban areas and 10 in rural areas -- that have been designated through a competitive application process in 1994, 1998, and 2002. State and local governments nominated distressed geographic areas, which were selected on the strength of their strategic plans for economic and social revitalization. The Secretary of Housing and Urban Development designated the urban areas while the Secretary of Agriculture designated the rural areas. In addition, the District of Columbia Enterprise Zone (DC Zone) was established in 1998, and the GO Zone was established in 2005 in the aftermath of Hurricane Katrina. Empowerment zone designations were retroactively renewed from December 31, 2009, to December 31, 2011, in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. They have not yet been extended beyond December 31, 2011.

Businesses that operate in these zones are eligible for various incentives including tax credits for qualifying wages, additional expensing for qualified zone property, tax-exempt financing for some facilities, deferral of capital gains on sales and reinvestment in zone assets, and exclusion of 60 percent (rather than 50 percent) of the gain on the sale of qualified small business stock held more than five years. Eligibility for these credits requires that employees primarily live and provide services within the zone and that most of the business's gross income comes from the active conduct of business within the zone. Residents of empowerment zones age 18-39 qualify as a targeted group for the work opportunity tax credit (WOTC). The DC and GO Zones provide additional targeted incentives.

The designation of empowerment zones expired at the end of 2011; some empowerment zones have been in effect for 17 years, and the Administration's proposal would reassess where resources should be targeted to provide the most benefit going forward. The budget proposes a national competition for growth zone status from which the administration would designate 20 growth zones (14 in urban areas and 6 in rural areas). The designation and tax incentives would be in effect for five years from 2014 through 2018. The Secretary of Commerce would select the zones in consultation with the secretaries of Housing and Urban Development and Agriculture. These designations will be based on the strength of the applicant's "competitiveness plan" and its need to attract investment and jobs.

Two tax incentives would apply to growth zones. Businesses that employ zone residents could claim employment credits that would be similar to the enterprise zone credit. The credit would equal 20 percent of the first $15,000 of wages for zone residents hired to work within the zone and 10 percent for those working outside of the zone. Second, qualified property placed in service within the zone would be eligible for additional first-year depreciation of 100 percent of the adjusted basis of the property. To evaluate the effectiveness of the growth zone program, the Secretary of the Treasury would collect data from taxpayers on the use of such tax incentives in each zone, and the Secretary of Commerce may require the nominating local government to provide other data on the economic conditions in the zones before and after designation. The growth zone program is expected to cost $3.6 billion from 2013 through 2017 but then raise revenues in subsequent years due to the loss of depreciation on assets previously expensed, reducing the net cost to $3.2 billion over the 2013-22 period.

If the federal government is going to provide incentives to develop specific geographic areas, it should periodically reevaluate designated areas using up-to-date information. However, there is little evidence that the earlier creation of Empowerment Zones has led to economic revitalization. Data limitations, including the inability to accurately measure where funds were utilized, make evaluation difficult. A GAO report found that while improvements in poverty, unemployment, and economic growth had occurred in these zones, econometric analysis could not tie these changes to the additional incentives available through the program. Indeed, the requirements for better data collection and tracking is due to limitations of earlier studies and an increased emphasis on the need to evaluate these programs.

Additional Resources

GAO Briefing for Congress, March 12, 2010, "Information on Empowerment Zone, Enterprise Community, and Renewal Community Programs."

Restructure Assistance to New York City: Provide Tax Incentives for Transportation Infrastructure

The Job Creation and Worker Assistance Act of 2002 provided tax incentives for the area in New York City damaged or affected by the terrorist attacks on September 11, 2001. This legislation created the "New York Liberty Zone" and provided various tax incentives to help lower Manhattan recover, including the Work Opportunity Tax Credit that provided a 40-percent subsidy in 2002 and 2003 on the first $6000 of annual wages for Liberty Zone employees, The legislation also provided various long-term investment tax incentives: 1) a special depreciation allowance for qualified property; 2) a five-year recovery period for depreciation of qualified leasehold improvement property; 3) $8 billion of tax-exempt private activity bond financing for certain property; 4) $9 billion of additional tax-exempt, advanced refunding bonds; 5) increased section 179 expensing; and 6) an extension of the replacement period to avoid taxation of gains on involuntary conversions that were due to the terrorist attacks.

State and local officials have recommended modifying the current tax incentives for investment to enhance the recovery of lower Manhattan. The Administration's Budget proposes restructuring the tax incentives to improve transportation infrastructure, which should have a greater impact on the area's development. The proposal would provide tax credits to New York State and New York City for expenditures to construct or improve transportation in or connecting to the Liberty Zone. The designation and authorization of projects would be split evenly between the city and the state. The tax credit would be in effect from 2013-22 with an annual limit of $200 million, which if not used fully in one year could be carried into subsequent years and beyond the 10-year budget horizon. The administration estimates the 10-year cost of the program would be $2 billion.

Reform International Taxation Rules

The president proposes to reform international tax laws to limit the benefits of income shifting to low-tax foreign jurisdictions. The proposals in the budget are similar to those proposed in the previous two budgets. They aim to limit international tax avoidance and reduce incentives for U.S. corporations to invest overseas instead of in the United States. In combination, the proposals would raise $148 billion between 2013 and 2022.

Currently, the United States taxes both the domestic and foreign earnings of U.S. corporations. When a firm pays U.S. taxes on its foreign profits depends on how its parent company organizes its foreign operations. If an operation is organized as a subsidiary (that is, it is separately incorporated in the foreign country), then its profits are generallynot taxed until they are paid to the U.S. parent. The exemption of foreign profits until they are repatriated to the parent company is called deferral. If an operation is organized as a branch (that is, it is not separately incorporated in the foreign country), then its profits are taxed when they are earned.

Not all classes of foreign-source income earned by foreign subsidiaries enjoy deferral. Under "Subpart F" of the current tax law, certain "passive" income such as income earned from investments in foreign assets, foreign base company sales and services income, and income from the insurance of U.S. risk is taxed upon accrual. These exceptions to the general rule of deferral intend to protect the U.S. base by limiting firms' ability to shift income not arising from active business activities to low-tax foreign jurisdictions. In addition, the parent company pays U.S. tax immediately on dividends, interest, or royalties paid by one subsidiary to another. That last rule does not apply, however, to payments within a corporation -- for example, from a local branch to the home office.

To prevent income earned abroad from being taxed twice, the United States allows firms to claim tax credits for income taxes paid to foreign governments. Firms can use these tax credits to offset U.S. tax liability on foreign-source income. A limitation on the credit for foreign taxes prevents U.S. firms from using these credits to reduce U.S. tax liabilities on income earned at home. The limit is the amount of tax that would be due if the foreign income were earned in the United States.

To understand how the credit works, consider a U.S. company that earns $100 in a subsidiary located in a country with a tax rate of 25 percent, so the subsidiary pays $25 tax to the host country. If the subsidiary immediately remits the $100 of earnings to the parent company, the parent company owes $35 of U.S. tax on the $100 (since the U.S. corporate tax rate is 35 percent). However, the company may claim a $25 credit for the tax paid to the foreign country, leaving a net U.S. tax of only $10 (the $35 tax minus the $25 credit).

If the foreign tax rate were 45 percent, and as before the profits are sent home to the parent, the firm would owe $45 in foreign tax, $10 more than the $35 U.S. tax liability. A firm in this situation is said to have "excess credits" of $10 (the $45 foreign tax minus the $35 U.S. tax) because its foreign tax payment exceeds the U.S. credit it may claim in the current year. In some situations, the foreign tax credit system allows firms to use excess credits from one source of foreign income to offset U.S. tax payments on income from another source in a procedure called "cross-crediting."

To understand how cross-crediting works, consider a company with both of the subsidiaries described above. Cross-crediting allows the parent corporation to use the $10 of excess credits of the second subsidiary (in the high-tax country) to offset the $10 net U.S. tax liability on the first subsidiary (in the low-tax country). In this case, simultaneously repatriating income from subsidiaries in both high-and low-tax countries results in no net U.S. tax liability on the $200 of foreign-source income.

Differences in taxation between the United States and other countries give multinational companies an incentive to alter their transfer prices -- that is, the prices they charge for goods purchased from and sold to their affiliates -- from what a nonaffiliated customer would be charged. For example, by underpricing sales to their affiliates in low-tax countries and overpricing purchases from them, companies can shift reported profits to their affiliates in those countries, thus reducing tax on the entire corporate group. To deal with this practice, most governments require firms to use an "arm's length" standard for tax reporting purposes, setting transfer prices equal to the prices that would prevail if the transaction were between independent entities. Yet ample room remains for firms to manipulate transfer prices because arm's-length prices are often difficult to establish for many intermediate goods and services, especially for intangibles, such as patents, that are unique to the firm.

There are other ways for firms to shift income from high-to low-tax countries. For example, by borrowing money in high-tax countries to finance their overall operations, they can claim larger interest deductions in those countries and so report more profits in low-tax countries. Research using Treasury tax files suggests that two of the most important vehicles for income shifting are placing debt in high-tax locations and transferring very valuable intangible assets to low-tax subsidiaries without adequate compensation in the form of royalties. Treasury economist Harry Grubert reports that location of intangible income and the allocation of debt among high- and low-tax countries seem to account for all of the observed differences in profitability among high-and low-statutory tax countries.

The president proposes a package of revenue-raising reforms of the international tax system that would affect both the deferral and foreign tax credit features of current law as well as income shifting. The bulk of the revenue raised from these provisions would come from changes related to the deduction of interest expenses against deferred foreign income, the calculation of the foreign tax credit, and the treatment of returns associated with the transfer of intangibles abroad to affiliated foreign companies. These changes would all reduce the benefits of overseas investments, especially investments in low-tax countries. All the provisions would take effect in 2013.

Changes related to the deduction of interest expenses against deferred foreign income

Under current law, companies with overseas operations may immediately deduct expenses supporting foreign investment while deferring payment of taxes on profits from those investments until they repatriate the profits. Under the president's proposal, companies could not claim deductions on their U.S. tax returns for interest expenses that are properly allocable to foreign-source income until they pay U.S. taxes on their foreign earnings. The provision would effectively limit the benefit of deferral by raising the cost of delaying U.S. tax payments on foreign profits. The rules governing the provision are complicated and have uneven effects across different industries and companies. Multinational companies that are heavily leveraged would suffer most from the provision.

Changes related to foreign tax credits

The president proposes to limit cross-crediting by requiring firms to consider the foreign tax they pay on all of their foreign earnings and profits in determining their foreign tax credits. Under current law, the foreign tax credit is based on earnings and profits on which U.S. tax has been paid. Companies receive foreign tax credits for foreign taxes paid on deferred income when they repatriate that income. This enables them to coordinate repatriations from low-and high-taxed income sources to maximize their foreign tax credits. The provision would limit firms' ability to blend their repatriations to minimize or avoid U.S. taxes on foreign source income. By so doing, this proposal would reduce cross-crediting and further limit the benefits firms receive from deferral.

Changes related to income shifting

The president proposes two measures to prevent the inappropriate shifting of income outside the United States through the transfer of intangible property.

One proposal would scrutinize the income arising from transfers of intangible property. If a U.S. company transfers an intangible asset (such as a patent) to a related foreign company in a country with a low effective tax rate and circumstances indicate that there is excessive income shifting into the low-tax country, then under the proposal, the return that is deemed to be "excessive" would be taxed currently and not allowed deferral. This proposal reflects a belief that the current transfer pricing regulations are not working adequately for intangible property transfers, providing a backstop method of limiting the benefits from income shifting. A second proposal would strengthen the transfer pricing regulations by clarifying the definition of intangible property in an effort to reduce controversy that has arisen in IRS examinations. In addition, the proposal would clarify that when valuing intangible property, the IRS may take into consideration the prices or profits that the controlled taxpayer could have realized by choosing a realistic alternative to the controlled transaction taken. This seems to be a movement away from the "arm's length" standard for transfer pricing. Finally, this second provision would allow the IRS commissioner to value multiple intangible properties on an aggregate basis if doing so would achieve a more reliable result.

Two other measures to limit income shifting would limit earnings stripping by expatriated entities and disallow the deduction for non-taxed reinsurance premiums paid by affiliates. The former proposal would limit the ability to reduce tax on income from U.S. operations through the deductions of interest from debt to related foreign parties. The latter proposal would prevent insurance companies from avoiding the subpart F rules limiting deferral of income of a foreign affiliate through reinsurance transactions with a related foreign party not subject to U.S. income tax.

Overall Effects

Taken as a group, the international tax reform proposals would limit the benefits of deferral, limit the ability of companies to shift reported income to low-tax foreign affiliates, and limit their ability to avoid the effects of foreign tax credit limitations. Limiting income shifting protects the corporate tax base by helping ensure that income earned in the United States is not erroneously classified as foreign-source income. In addition, by limiting the tax benefits of investing overseas instead of in the United States, the proposals intend to prevent U.S. multinational companies from shifting employment from home production to overseas operations. But some research finds that foreign investment may increase domestic employment in U.S. multinationals if the investments facilitate more exports to foreign affiliates. And employment in the United States is influenced more by overall fiscal and monetary policies that determine the quantity of American-made goods, services, and assets that American and foreign consumers and investors are willing to purchase than by policies that move jobs from one activity to another.

Policies to limit tax benefits that favor investments by U.S. companies in low-tax countries could boost economic efficiency by providing better incentives for companies to invest where the pretax returns are greatest. But these increased taxes on foreign-source income apply only to U.S.-based multinational companies and not to foreign-based companies that, in most countries are exempt from tax on their active foreign-source income. As a result, opponents of these provisions argue that they would place U.S.-based companies at a competitive disadvantage to multinationals based in other countries and would encourage new corporations to establish their tax residence outside the United States.

Additional Resources

Tax Policy Briefing Book: International Taxation: How does the current system of international taxation work?

Eric Toder, "Will Paring Deferral Create Jobs?" TaxVox, May 5, 2009.

Harry Grubert, "Intangible Income, Intercompany Transactions, Income Shifting and the Choice of Location," National Tax Journal, Volume LVI, No.2, Part 2.

Joint Committee on Taxation, "Description of Revenue Provisions Contained in the President's Fiscal Year 2010 Budget Proposal; Part Three: Provisions Related to the Taxation of Cross-Border Income and Investment (JCS-4-09)," September 2009.

Impose a Financial Crisis Responsibility Fee

In response to widespread disruption and uncertainty in financial markets, President Bush signed the Emergency Economic Stabilization Act into law on October 3, 2008. The centerpiece of that legislation was the Troubled Asset Relief Program (TARP), which authorized the U.S. Treasury to purchase and hold up to $700 billion in assets in order to stabilize the financial system. Section 134 of that Act requires that any shortfall from the TARP program be recouped from the financial industry. As of November 2011, the Congressional Budget Office estimates the net cost of the TARP program at $34 billion.

The president proposes to assess a 0.17 percent fee on certain liabilities of all large financial firms operating in the United States. The fee would apply to all banks, thrifts, bank or thrift holding companies, securities broker-dealers, or any firm owning such an entity on or after January 14, 2010, with consolidated assets of more than $50 billion. Domestic firms would be assessed based on their total worldwide assets; foreign firms would be assessed based on the consolidated assets of their U.S. subsidiaries. The base of the fee would exclude high-quality (Tier 1) capital, along with certain liabilities required for regulatory purposes, such as FDIC-insured deposits and insurance policy reserves, and certain loans to small businesses. The fee would be deductible against the corporate income tax.

In many respects, the proposed fee acts as a "too-big-too-fail tax," similar in spirit to deposit insurance. Whereas banks pay the FDIC a fee to guarantee depositors' accounts against bank failure, the financial crisis responsibility fee can be seen as a form of insurance payment for the government's anticipated (although not promised) support during times of widespread financial distress. While the fee would raise revenue and might discourage excessive risk-taking at the margin, its overall impact on financial sector risk is likely to be modest and by itself insufficient to prevent future credit bubbles, such as the subprime mortgage loans at the heart of the recent crisis.

The proposal would take effect January 1, 2014 and the Obama administration estimates that the proposal would raise $61 billion through 2022. Banks could pass at least part of the fee along to customers in the form of higher fees and/or interest rates; that would be more likely to occur for services dominated by large institutions (such as investment banking services).

Additional Resources

White House, "Financial Crisis Responsibility Fee Fact Sheet," January 14, 2010.

Reform Treatment of Insurance Companies and Products

The budget contains three proposals that would change the tax treatment of insurance companies and their products. In combination, the proposals would raise about $16 billion through 2022.

Modify rules that apply to sales of life insurance contracts

Investors sometimes purchase existing life insurance contracts, thus providing the sellers of those contracts with immediate payment in return for the buyers getting insurance payments when insured individuals die. Death benefits received by a decedent's family are not taxed, even if the insurance amount exceeds the premiums paid. In general, however, an investor with no financial interest in the insured must pay tax on the amount of insurance collected less the amount paid for the policy and premiums paid by the investor. But various exceptions may give investors an incentive to structure the purchase of insurance contracts to avoid subsequent tax liability. This proposal would modify transfer rules to make those exceptions inapplicable for investors, thus ensuring that investors pay tax on their gains and increase revenues by $811 million over 10 years. It would also impose reporting rules on the transfer of policies with a death benefit of $500,000 or more. The new rules would apply to transfers of policies and payments of death benefits for taxable years beginning after December 31, 2012.

Modify proration rules for life insurance company general and separate accounts

In general, corporations may deduct between 70 percent and 100 percent of dividends received from other corporations in order to avoid taxing that income twice at the corporate level. Under current law, an allocation rule for life insurance companies disallows the deduction with respect to the portion of the dividend that is allocated to policyholders and not the company. This proposal aims to limit the share of the dividend to which the deduction applies to no more than the company's economic interest in the dividend, all while making the allocation system less complex and more consistent with the treatment of other corporations. This proposal would be effective for taxable years beginning after December 31, 2012, and would raise about $7.7 billion through 2022.

Expand pro rata interest expense disallowance for corporate-owned life insurance

An insurance company will accrue interest on life insurance policies, which generally increases the policies' cash surrender value. This interest is not taxable under current law. If a company could borrow to purchase such a policy and deduct the interest, it would be matching currently deductible interest against tax-free income. Accordingly, interest on borrowing to purchase or carry life insurance is generally not deductible. Further, since it would often be difficult to trace borrowing used to fund the purchase of insurance, a pro rata portion of the corporation's interest expense is disallowed to the extent it has "unborrowed" cash value under life insurance policies (Section 264(f)). However, this rule does not apply if the policy covers the life of an individual who is an employee, officer, or director of the corporation. This proposal would repeal that exception for policies issued after December 31, 2012, increasing revenues by $7.3 billion over 10 years. The exception for policies covering the life of a 20 percent owner of the business would remain

Eliminate Fossil Fuel Tax Preferences

Targeted Tax Preferences for Oil and Gas Wells and Coal Mines

The federal income tax includes a number of tax preferences that encourage investment in exploration, development, and extraction of fuels from domestic oil and gas wells and coal mines. The costs of these tax preferences through 2016 are displayed in the Analytical Perspectives section of the federal budget. The two largest tax preferences are as follows:

• Excess of percentage over cost depletion, fuels. Under normal income tax rules, producers of oil, gas, and coal would be able to recover the costs of their investments in wells and mines every year in proportion to the share of the resource extracted (cost depletion). But current law instead allows independent producers to deduct a percentage of gross income from production (percentage depletion), subject to certain limits. The excess of percentage of cost depletion will cost $6.9 billion between 2013 and 2017.

• Expensing of exploration and development costs. Under normal income tax rules, exploration and development costs for oil and gas wells and coal mines would be capitalized and recovered as resources are extracted from the property. But current law allows independent producers to deduct immediately intangible drilling costs (IDCs) for investments in domestic oil and gas wells. (Integrated producers may deduct 70 percent of IDCs and amortize the remaining 30 percent over five years.) Businesses may also deduct exploration and development costs of surface stripping and the construction of shafts and tunnels for other fuel minerals. Expensing of exploration and development costs will cost $3.0 billion between 2012 and 2017.

The Obama administration proposes to eliminate special tax benefits for domestic fossil fuel production. The proposals and their revenue gains between 2013 and 2022 include these seven:

• Repeal percentage depletion for oil and natural gas wells and hard mineral fossil fuels ($11.5 billion)

• Repeal expensing of intangible drilling costs for oil and gas and expensing of exploration and development costs for coal ($14.3 billion)

• Increase amortization period for geological and geophysical amortization period for independent producers to seven years ($1.4 billion)

• Repeal capital gains treatment for coal royalties ($0.4 billion)

• Repeal the exemption to the passive loss limitation for working interests in oil and natural gas properties ($0.1 billion)

• Repeal the deduction for tertiary injectants ($0.1 billion)

• Repeal the enhanced oil recovery credit and the credit for oil and gas produced from marginal wells (no revenue effect, based on projections of world oil prices)

In addition to these targeted tax expenditures, current law provides a much broader subsidy for domestic U.S. production activities: a special 9 percent deduction from taxable income. This deduction reduces the effective top tax rate on corporate income from domestic production from 35 percent to 31.9 percent and will cost $81.1 billion for all qualified domestic production between 2013 and 2017. Production from domestic oil and gas wells and domestic coal mines benefits from this deduction, but less than other qualified domestic production because it qualifies for only a 6 percent deduction, making the effective rate on corporate income from domestic fossil fuel production equal to 32.9 percent.

The president proposes to repeal the current 6 percent domestic manufacturing deduction for oil, gas, and coal production, but would at the same time increase the deduction rate from 9 percent to approximately 18 percent for other domestic production activities, reducing the corporate rate on qualifying manufacturing to about 28.7 percent. This proposal would remove a subsidy that treats oil and gas production more favorably than service industries, which do not receive the domestic manufacturing deduction. But it would place energy industries at a larger disadvantage than currently relative to domestic manufacturing activities that receive the full deduction. The combined effect of repealing the domestic manufacturing deduction for oil, gas, and coal and expanding the deduction to other activities is approximately revenue neutral.

In general, a neutral tax system promotes an efficient allocation of investment by encouraging choices by business and households that maximize the economic productivity of assets instead of their tax benefits. Tax subsidies for selected assets and industries distort markets and cause too much output of favored goods and too much investment in favored assets or technologies. Eliminating tax subsidies for fossil fuel production would improve economic efficiency by encouraging capital to flow to assets with higher pretax returns. Eliminating these preferences would also raise prices and reduce world output of fossil fuels, thereby reducing carbon emissions and contributing to climate policy goals. But because these resources are traded on world markets, the principal effect of reducing subsidies for U.S. domestic production would be to increase U.S. imports (of oil) and reduce exports (of coal). In other words, eliminating the subsidies will mainly affect the location of production, not world prices and global energy use.

The effects on economic efficiency of eliminating the domestic production deduction for oil, gas, and coal production are less clear than the effects of eliminating targeted tax subsidies for fossil fuels. The current law deduction gives a tax advantage to domestic manufacturing relative to services. Removing the domestic production deduction for oil and gas eliminates the tax preference for that sector, and makes it treatment more neutral compared with services, but increases the bias favoring other manufacturing over fossil fuel production. This bias is further increased by the proposal to increase the domestic manufacturing deduction for the remaining qualifying activities.

Revise Tax Treatment of Inventories

Repeal Last-In, First-Out (LIFO) Method of Accounting for Inventories

Many businesses hold inventories of goods, both inputs and products for sale. Because the purchase of inventory represents an exchange of cash for an equal value of assets, firms cannot deduct inventory when purchased. Instead, firms deduct the cost of inventory against the sale of goods in computing net profit. Because otherwise-identical goods moving out of inventory can have different costs, depending on when they were acquired, firms rely on specific conventions to account for the costs of goods sold.

Most companies use the first-in-first-out (FIFO) method, which assumes that the goods first purchased are the ones first sold. The cost of the goods on hand at the end of the year -- the firm's inventory -- reflects the most recent purchases. Alternatively, companies can elect to use the last-in-first-out (LIFO) method if they also use LIFO for financial statement purposes. This method assumes that the goods last purchased are the ones first sold. This means that goods first purchased make up the firm's inventory at the close of the year. If prices are rising, LIFO allocates higher costs to goods sold than FIFO, which reduces current taxable income and assigns a lower value to the year-end inventory.

The president's budget proposes repeal of the election to use LIFO for income tax purposes. Taxpayers that currently use the LIFO method would be required to write up -- that is, revalue -- their beginning LIFO inventory to its FIFO value in the first taxable year beginning after December 31, 2013. To prevent a large spike in tax liability, this one-time increase in gross income from the write-up of existing inventory would be taken into account ratably over the 10 years beginning after December 31, 2013. The change would increase revenues by $73.8 billion over the next 10 years.

Under LIFO, as long as sales during a year do not exceed purchases, all sales are matched against purchases in the same year, and the opening inventory is never considered to have been sold. Therefore, a company that has used LIFO for many years will have a stock of inventory on its tax returns with a much lower value than its current acquisition price. Repealing LIFO and making companies pay tax on the accrued difference between the LIFO and FIFO valuations of their inventory would impose a substantial one-time tax (paid over 10 years under the proposal) and a smaller permanent annual tax as long as prices are increasing. Affected companies have benefitted from lower taxes in previous years, however, so the one-time tax could be viewed as repayment of those tax savings.

Proponents of repeal argue that LIFO has no value as a management tool and serves only to cut tax liability for a relatively small number of firms. Proponents of repeal also point out that LIFO is currently prohibited under the International Financial Reporting Standards. Opponents of repeal argue that LIFO makes the effective tax rate on inventory comparable to that on machinery and buildings and that repeal would overtax inventory. Further, they argue that in the presence of inflation, FIFO taxes firms on profits that represent changes in the price level instead of real economic profits and that LIFO may represent a better approximation of real economic income.

Repeal Lower-Of-Cost-Or-Market (LCM) Inventory Accounting Method

Companies that do not use LIFO may write down the value of their inventories by applying the lower-of-cost-or-market (LCM) method rather than the cost method, or write down the value of "subnormal" goods (ones that cannot be sold at the normal price or cannot be used as intended).

The president's budget proposes to prohibit the use of the LCM or subnormal methods for taxable years beginning after December 31, 2013. The one-time increase in income due to revaluing existing inventories that were valued using these methods would be taken into account ratably over four years and increase federal revenue by about $13.1 billion through 2022.

The LCM and subnormal goods methods allow taxpayers to reduce taxable income for anticipated losses on inventories before the losses occur when the inventory is sold. However, there is no corresponding requirement that anticipated gains on inventories be included in taxable income before the gains occur. This asymmetric treatment accelerates inventory losses and defers inventory gains, misstating the timing of income and reducing tax revenues.

Additional Resources

Edward D. Kleinbard, George A. Plesko, and Corey M. Goodman, Is It Time to Liquidate LIFO? Tax Notes, October 16, 2006.

Alan D. Viard, Why LIFO Repeal Is Not the Way to Go, Tax Notes, November 6, 2006.

Reinstate Superfund Taxes

The Superfund trust fund is used to clean up contaminated sites. Parties found liable for contaminating sites generally bear the cost of Superfund cleanups, but the trust fund covers the costs when liable parties no longer exist or either cannot or will not undertake a cleanup.

The Superfund program has in past received funding from two sources: general funds from the Treasury and balances in the Superfund trust fund. In earlier years, revenues for the trust fund came from three dedicated excise taxes and an environmental corporate income tax. Those taxes expired in December 1995, however, and the amount of unobligated money in the fund gradually declined to zero by the end of fiscal year 2003. The Superfund trust fund has been funded almost entirely through general revenues ever since.

Before they expired, the Superfund taxes included an excise tax of 9.7 cents per barrel on crude oil or refined oil products; excise taxes of $0.22 to $4.87 per ton on certain hazardous chemicals; an excise tax on imported substances that use one or more of the hazardous chemicals subject to excise tax in their production or manufacture; and an environmental income tax of 0.12 percent on the amount of a corporation's modified alternative minimum taxable income that exceeds $2 million. The president would reinstate these taxes beginning January 1, 2013, and expiring after December 31, 2022. During that period, the levies would raise about $21.0 billion.

Proponents of reinstating the Superfund excise taxes argue that imposing these taxes is consistent with a "polluters pay" principle: industries and companies that used hazardous substances and purchasers of products that generate hazardous wastes should bear the cleanup costs. Proponents also argue that the Superfund taxes may discourage the use of toxins and, ultimately, hazardous waste. But the pollution in question is legacy contamination, so the incidence is unlikely to reach culpable parties. In addition, the taxes may distort economic behavior without giving businesses an incentive to handle hazardous wastes more carefully or avoid producing them. Taxes placed directly on current waste ("waste end" taxes) would be more efficient. The corporate income tax component of the Superfund taxes would contribute additional revenues for cleanup activities, but it is extremely complex, requiring firms to compute a corporate AMT liability even if they do not owe any tax. And, in contrast to the excise taxes, the amount of corporate environmental income tax has no connection to the source of current or prior pollution.

Additional Resources

Congressional Research Service Report on Superfund Taxes (CRS Report RL31410).

Extend Certain Expiring Provisions through 2013

The revenue code includes dozens of "temporary" tax incentives, many of which have been extended one year at a time for over a decade. The most significant in terms of revenue provides temporary relief from the alternative minimum tax (a provision discussed elsewhere in this review). Most others are highly targeted subsidies that benefit business. The most significant of these in terms of revenue is the research and experimentation credit (also known as the research and development credit and discussed elsewhere in this review). Others encourage a broad range of activities such as purchases of energy efficient products.

The "adjusted baseline" used in the president's budget in place of current law assumes permanent extension of AMT relief. The 2011 AMT parameters -- exemptions, rate brackets, and exemption phaseout thresholds -- are made permanent and indexed for inflation after 2011 at a 10-year cost of $1,898 billion. The president's budget also includes a separate proposal to enhance the research credit and make it permanent, at a cost of $109 billion over 10 years.

In addition to these proposals to make some expiring provisions permanent, the president's budget would extend a number of other expired or expiring provisions through 2012, with a 10year cost of $26 billion. These provisions include various energy-related incentives, the optional deduction for state and local general sales taxes, the Subpart F "active financing" and "lookthrough" exceptions, and expensing or accelerated cost recovery for various forms of investment.

Observers disagree over whether annually extending these tax benefits is good policy or whether it would be better to treat them as permanent provisions of the tax code. Proponents argue that temporary tax cuts allow for regular congressional review, while critics say that in practice no real review occurs. Meanwhile, although many beneficiaries act as if the provisions are permanent, congressional delay in reenacting them in a timely manner can lead to uncertainty and weaken some of the intended incentives. In addition, if these provisions are never allowed to lapse, as past history would suggest, the practice of proposing short-term extensions with an expectation they will be renewed again substantially understates their true long-run budgetary cost.

Additional Resources

Tax Policy Briefing Book: Taxes and the Budget: What are extenders?

Tax Extenders and Fiscal Responsibility, TaxVox, May 29, 2008.

Whatever Happened to All those Expiring Provisions?, TaxVox, December 29, 2011.

List of Expiring Federal Tax Provisions 2011-2022 (JCX-1-12), Joint Committee on Taxation, January 6, 2012.

Expand the Federal Unemployment Tax Act Base and Make the Unemployment Insurance Surtax Permanent

Unemployment insurance (UI) is financed by a combination of federal and state taxes that are levied on employers and based on the wages of each employee. The Federal Unemployment Tax Act (FUTA) currently imposes a federal payroll tax on employers of 6.0 percent of the first $7,000 of annual wages paid to each employee. The tax funds a portion of the federal/state unemployment benefits system. Before its expiration on July 1, 2011, the Federal payroll tax had included a surtax of 0.2 percentage points, which started in 1976 and had been extended until then. The Administration proposes reinstating the surtax and making it permanent, which would raise $13.9 billion from 2013-2022.

State-level governments may set their taxable wage base separate from the federal base. Currently, only three (Arizona, California, and Puerto Rico) match the federal base, which was established in the 1980s and has not been indexed to wage growth. The remaining states and the District of Columbia have set their taxable wage bases at higher levels and often automatically adjust their bases for inflation. Employers in states that meet certain federal requirements are allowed a tax credit for state unemployment taxes up to 5.4 percent of the federal wage base -- that is, the minimum net federal tax rate is 0.6 percent, without the extension of the Federal payroll surtax. The administration proposes extending the surtax

Due to the length of the current downturn and the relatively low levels of state reserves at the beginning of the recession, states have accrued a large level of debt to the federal UI trust fund. When states have exhausted their funds and borrow from the federal government to pay benefits, they are required to repay both the principal and interest. Thus, net federal tax rates on employers increase in indebted states (since they are not eligible for the full credit) to repay the loans. Affected states also must increase state payroll tax rates or the covered wage base to rebuild their funds. In addition, states may address their short-term debt burden by limiting eligibility or benefits paid to unemployed workers.

Employers in some indebted states have faced higher taxes to repay these debts, which arguably discourages job creation. To mitigate this obstacle to economic growth, the President's budget proposes to provide short-term relief to employers by suspending interest payments on state UI debt and suspending the FUTA credit reduction for employers in borrowing states in 2012 and 2013. Additionally, the Administration would raise the annual FUTA wage base to $15,000 per worker in 2015, index the wage base to subsequent wage growth, and reduce the net federal UI tax from 0.8 percent (which includes its proposed surtax) to 0.37 percent. States with wage bases below $15,000 would have to conform to the new FUTA base. States would retain the ability to set their own tax rates, as under current law. The Administration estimates that this proposal would cost $6.6 billion in 2013 and 2014, but the higher tax base would increase revenues starting in 2015. From 2013-2022, the proposal would raise $47.8 billion.

Given the slow economic recovery and the current state of the unemployment insurance funds, the timing of the proposals makes sense: postponing an increase in unemployment taxes can encourage new hiring and increasing the wage base will help many states accumulate fund balances, shoring up their reserves for the next recession. In addition, indexing the wage base for the wage growth will prevent future erosion of unemployment funds by inflation.

Additional Resources

U.S. Department of Labor, "UI Data Summary FY 2011 Budget Mid-session Review."

Center for Budget and Policy Priorities, "Rebuilding the Unemployment Insurance System."

Other Revenue Proposals

Provide tax credit for energy-efficient commercial building property expenditures in place of existing tax deduction. The president proposes to replace the existing deduction for energy-efficient commercial buildings with a credit for the cost of modifications placed in service during 2013 that reduce energy usage by at least 20 percent. The proposal would reduce receipts by $1.7 billion over the next decade.

Reform and extend Build America Bonds. Build America bonds were created by the 2009 stimulus act to provide an alternative to tax-exempt bonds as a means of financing state and local government projects. Rather than exempting bond interest from federal taxation, the federal government makes direct payments to issuing governments to subsidize interest payments on taxable bonds. The president proposes to make the program permanent with a 30-percent subsidy for bonds issued through 2013 and a 28-percent subsidy thereafter (which would be roughly equivalent to the subsidy for tax-exempt bonds). The president would also expand the range of activities for which governments could use the bonds. The proposal would increase receipts by roughly $66 billion over the next decade, since taxable bonds would replace tax-exempt ones. However, the new payments would increase outlays by about $67 billion. On net, the proposal would increase the deficit by $1.1 billion over the next decade.

Provide tax incentives for locating jobs and business activities in the United States and remove tax deductions for shipping jobs overseas. The Administration proposes to create a new tax credit equal to 20 percent of business expenses paid or incurred in connection with insourcing a U.S. trade or business and to deny deductions for the costs of moving U.S. jobs offshore. The motivation is to provide tax incentives to encourage U.S. companies to locate jobs at home instead of overseas. But the proposal as described in Treasury's Green Book does not define what activities qualify as either expenses of insourcing or costs of moving jobs offshore. Moreover, when a U.S. corporation invests in activities in the United States, it is impossible to tell whether or not that investment is coming at the expense of an addition to its stock of overseas investments. Nor it is possible to tell whether an additional offshore investment is displacing domestic jobs. The Administration estimates this proposal would lose about $9 million per year through 2022.

Target the domestic production activities deduction to domestic manufacturing activities and double the deduction for advanced manufacturing activities. Under current law, companies are allowed to take a 9 percent deduction from taxable profits arising from domestic production activities. The deduction reduces the maximum federal corporate tax rate on profits from qualifying activities from 35 percent to 31.9 percent. The deduction rate is 6 percent for income from oil and gas production, refining, transportation, and distribution, making the top corporate rate on these activities 32.9 percent. The Administration proposes to eliminate completely the domestic production deduction for the production of oil and gas, hard mineral fossil fuels, and some other "nonmanufacturing" activities and to use the revenue gained to increase the deduction rate for manufacturing involving certain "advanced technology" property to 18 percent. Previous Administration budgets had also proposed to remove the domestic production deduction for oil, gas, and hard mineral fossil fuels, but had grouped the proposal along with other proposals to reduce fossil fuel tax preferences. (See write-up on fossil fuel tax preferences.) The proposals would have a negligible effect on revenues over the next decade.

Extend exclusion from income for cancellation of certain home mortgage debt. Forgiven debt generally is considered to be taxable income. One exception is qualified principal residence indebtedness (QPRI), debt incurred in buying a home. That exception for QPRI was created in 2007 and set to expire after 2009. Subsequent legislation extended the exception through 2012. The president proposes to further extend the exception through 2015 for debt discharge agreements made prior to 2016. The proposal would reduce receipts by $2.7 billion over the next decade.

Provide tax credits for the production of advanced technology vehicles and for medium-and heavy-duty alternative-fuel commercial vehicles and extend and modify certain energy incentives. The president proposes to provide tax credits for plug-in electric drive vehicles and for medium-and heavy-weight fuel cell vehicles produced during specified periods, all of which would end by 2020. He would also extend existing tax credits for wind facilities and associated properties placed in service during 2013. In combination, the three proposals would reduce receipts by $7.6 billion over the next decade.

Eliminate special depreciation rules for purchases of general aviation passenger aircraft. The president proposes to increase the recovery period for depreciating general aviation passenger aircraft from five years to seven years (12 years for alternative depreciation). The changes would bring the tax preference for corporate jets and similar airplanes in line with that for commercial and freight airlines. The proposal would increase receipts by $2.2 billion over the next decade.

Deny deduction for punitive damages. Taxpayers are currently allowed to deduct certain punitive damages from taxable income. The president proposes to disallow all such deductions and to count as taxable income any punitive damages paid by insurance. This provision would increase revenue by $0.3 billion over the next decade.

Increase Oil Spill Liability Trust Fund financing rate by one cent. The Oil Spill Liability Trust Fund is financed by an excise tax on certain crude oil and petroleum products. That tax is currently 8 cents per barrel, rising to 9 cents in 2017. The president proposes to increase the tax to 9 cents per barrel in 2012 and to 10 cents in 2017. The proposal would increase receipts by $0.7 billion over the next decade.

Reform inland waterways funding. The Inland Waterways Trust Fund finances locks, dams, and related infrastructure for use by inland barges. The fund is currently financed by a 20-cents-per-gallon excise tax on liquid fuels used in inland waterways commerce. The president proposes to reform laws governing the fund and to establish a new fee on commercial navigation users. The proposal would increase revenue by $1.1 billion over the 2013-22 period.

Increase certainty surrounding worker classifications. Businesses must distinguish between workers who are employees and those who are independent contractors. The president proposes to allow the Internal Revenue Service to provide greater guidance about appropriate worker classification and to require prospective reclassification of those who are misclassified. This proposal would increase revenue by $8.4 billion over the next decade.

Increase program integrity efforts. The president proposes to provide additional resources to the Internal Revenue Service for enforcement and compliance activities. Prior budgets have generally not recorded savings from such efforts, nor have they assumed a decrease in receipts when enforcement budgets have failed to keep up with increased workloads and labor costs.

However, the current budget projects $43.6 billion in revenue increases from increased IRS enforcement over the next decade. Other, smaller program integrity efforts are credited with raising an additional $0.7 billion.

Indexing the Budget Tax Proposals

Much of the federal income tax is indexed for inflation to prevent nominal income growth from pushing taxpayers into higher tax brackets and the consequent higher effective tax rates, a phenomenon known as "bracket creep." Most but not all of the tax proposals in the 2013 budget include indexing provisions and as a result, they will maintain their value over time in real terms.

Some proposals would maintain their real values because they interact with tax parameters that are indexed. However, three individual income tax proposals would lack indexing -- the increased refundability of the child tax credit, the expansion of the child and dependent care tax credit, and the estate and gift tax. The earnings level at which refundability of the child credit would start to phase in for low-income families would be fixed permanently at $3,000. Over time, that value would decline in real terms, effectively extending the refundability of the credit to lower income households and increasing the value of the credit for many families. The reverse would hold for the childcare credit: the threshold at which the credit rate would begin to phase down from 35 percent to 20 percent would remain fixed at $75,000 and the maximum amount of spending eligible for the credit would stay at $3,000 ($6,000 for more than one child). As a result, the value of the credit would decline in real terms over time.

Without indexing, the estate and gift tax would affect more estates over time as the value of the $3.5 million exemption falls in real terms. In addition, taxable estates would pay higher effective tax rates as a larger fraction of those estates would become subject to tax.

¹ Refundable tax credits count as outlays in the federal budget. The administration's budget baseline increases those outlays by $252 billion over the coming decade.

² Congress has repeatedly "patched" the AMT by increasing its exemption for one-year periods. Our current law baseline assumes no such patches in future years.

³ The threshold for heads of household would be $225,000 and that for married couples filing separately would be $125,000, both measured in 2009 dollars and indexed for subsequent inflation.

⁴ Tax brackets for heads of household would be set midway between those for single and joint filers; those for married couples filing separately would be half those for joint filers.

⁵ PEP would start at $125,000 (indexed forward from 2009) for couples filing separately.

⁶ The values for married couples filing separately would be half those for joint filers.

⁷ Without congressional action, lower rates (18 percent and 8 percent, respectively) would apply to assets held for more than five years. The budget proposal would repeal the lower rates on long-held assets.

⁸ The president would limit the value of the following exclusions: tax-exempt state and local bond interest, employer-sponsored health insurance paid for by employers or with before-tax employee dollars, health insurance costs of self-employed individuals, employee contributions to defined contribution retirement plans and individual retirement arrangements, the deduction for income attributable to domestic production activities, certain trade and business deductions of employees, moving expenses, contributions to health savings accounts and Archer MSAs, interest on education loans, and certain higher education expense

⁹ The estimated revenue gain assumes that the 2001-03 tax cuts are extended for couples with income below $250,000 ($200,000 for singles, both 2009 values indexed for inflation) but allowed to expire for higher-income taxpayers.

¹⁰ See Report of the President's Advisory Panel on Federal Tax Reform, November 2005.

¹¹ Taxpayers for whom the credit exceeds their tax before credits would get the full benefit only if the credit were fully refundable.

¹² The "adjusted baseline" used in the president's budget in place of current law assumes permanent extension beyond 2012 of all the 2001 and 2003 tax cuts, including those affecting high-income tax units.

¹³ Average tax savings for the full year will be about $920, ranging from $165 for tax units in the bottom quintile with workers to nearly $2,250 for those in the top quintile.

¹⁴ The gift and generation-skipping transfer (GST) taxes followed similar paths -- $5 million lifetime exemptions and 35 percent tax rate through 2012, reverting to a $1 million exemption and 60 percent top tax rate in 2013.

¹⁵ The GST would have the same $3.5 million exemption as the estate tax; the lifetime gift tax exemption would be $1 million. Both taxes would match the estate tax's 35 percent tax rate.

¹⁶ The $1.5 billion in additional allowable investment in 2008 was directed toward rejected applicants or those recipients who did not receive their full requested allocation.

 

END OF FOOTNOTES

 

 

Table T12-0042

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 59.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0042.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0042

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 60.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0042.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0042

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 61.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0042.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0042

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 62.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0042.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0042

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 63.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0042.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0042

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 64.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0042.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0042

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 65.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0042.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0043

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile, 2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 66.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0043.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0043

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 67.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0043.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0043

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 68.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0043.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0043

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 69.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0043.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0043

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 70.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0043.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0043

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 71.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0043.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0043

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 72.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0043.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0043

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 73.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0043.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0044

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 74.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0044.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0044

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 75.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0044.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0044

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 76.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0044.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0044

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 77.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0044.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0044

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 78.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0044.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0044

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 79.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0044.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0044

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 80.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0044.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0045

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile, 2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 81.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0045.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0045

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 82.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0045.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0045

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 83.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0045.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0045

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 84.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0045.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0045

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 85.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0045.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0045

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 86.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0045.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0045

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 87.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0045.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0045

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 88.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0045.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0046

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2015¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 89.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0046.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0046

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2015¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 90.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0046.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0046

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2015¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 91.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0046.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0046

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2015¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 92.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0046.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0046

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2015¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 93.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0046.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0046

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2015¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 94.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0046.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0046

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2015¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 95.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0046.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0047

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile, 2015¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 96.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0047.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0047

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile, 2015¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 97.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0047.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0047

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2015¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 98.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0047.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0047

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2015¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 99.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0047.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0047

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2015¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 100.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0047.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0047

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2015¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 101.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0047.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0047

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2015¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 102.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0047.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0047

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2015¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 103.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0047.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0048

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2015¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 104.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0048.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0048

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2015¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 105.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0048.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0048

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2015¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 106.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0048.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0048

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2015¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 107.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0048.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0048

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2015¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 108.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0048.pdf

 

 

 

 

______________________________________________________________________

 

 

Table T12-0048

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2015¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 109.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0048.pdf

 

 

 

 

Table T12-0048

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level,

 

2015¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 110.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0048.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0049

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile,

 

2015¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 111.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0049.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0049

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions Baseline:

 

Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile,

 

2015¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 112.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0049.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0049

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2015¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 113.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0049.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0049

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2015¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 114.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0049.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0049

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2015¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 115.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0049.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0049

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2015¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 116.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0049.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0049

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2015¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 117.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0049.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0049

 

Administration's FY2013 Budget Proposals

 

Major Individual Income and Corporate Tax Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2015¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 118.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0049.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0050

 

Effective Marginal Individual Income Tax Rates (EMTR)

 

Administration's FY2013 Budget Proposals

 

Individual Income Tax Provisions

 

Distribution by Cash Income Level, 2013¹

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 119.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0050.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0051

 

Effective Marginal Individual Income Tax Rates (EMTR)

 

Administration's FY2013 Budget Proposals

 

Individual Income Tax Provisions

 

Distribution by Cash Income Percentile, 2013¹

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 120.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0051.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0052

 

Effective Marginal Individual Income Tax Rates (EMTR)

 

Administration's FY2013 Budget Proposals

 

Individual Income Tax Provisions

 

Distribution by Cash Income Level, 2015¹

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 121.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0052.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0053

 

Effective Marginal Individual Income Tax Rates (EMTR)

 

Administration's FY2013 Budget Proposals

 

Individual Income Tax Provisions

 

Distribution by Cash Income Percentile, 2015¹

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 122.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0053.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0054

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 123.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0054.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0054

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 124.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0054.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0054

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 125.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0054.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0054

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 126.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0054.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0054

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 127.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0054.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0054

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 128.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0054.pdf

 

 

 

_____________________________________________________________________

 

 

Table T12-0054

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 129.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0054.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0055

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile,

 

2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 130.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0055.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0055

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile,

 

2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 131.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0055.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0055

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 132.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0055.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0055

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 133.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0055.pdf

 

 

 

_____________________________________________________________________

 

 

Table T12-0055

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 134.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0055.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0055

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 135.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0055.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0055

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 136.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0055.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0055

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 137.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0055.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0056

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 138.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0056.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0056

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 139.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0056.pdf

 

 

 

_____________________________________________________________________

 

 

Table T12-0056

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 140.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0056.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0056

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 141.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0056.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0056

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 142.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0056.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0056

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 143.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0056.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0056

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 144.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0056.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0057

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile,

 

2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 145.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0057.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0057

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile,

 

2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 146.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0057.pdf

 

 

 

_____________________________________________________________________

 

 

Table T12-0057

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 147.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0057.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0057

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 148.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0057.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0057

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 149.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0057.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0057

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 150.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0057.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0057

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 151.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0057.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0057

 

Administration's FY2013 Budget Proposals

 

Tax Provisions Affecting Primarily High-Income Taxpayers

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 152.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0057.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0058

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 153.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0058.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0058

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 154.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0058.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0058

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 155.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0058.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0058

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 156.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0058.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0058

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 157.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0058.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0058

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 158.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0058.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0058

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level,

 

2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 159.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0058.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0059

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile,

 

2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 160.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0059.pdf

 

 

 

_____________________________________________________________________

 

 

Table T12-0059

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 161.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0059.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0059

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 162.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0059.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0059

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 163.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0059.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0059

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 164.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0059.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0059

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 165.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0059.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0059

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 166.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0059.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0059

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 167.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0059.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0060

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 168.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0060.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0060

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 169.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0060.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0060

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 170.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0060.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0060

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 171.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0060.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0060

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 172.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0060.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0060

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 173.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0060.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0060

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 174.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0060.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0061

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile, 2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 175.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0061.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0061

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 176.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0061.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0061

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 177.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0061.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0061

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 178.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0061.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0061

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 179.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0061.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0061

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 180.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0061.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0061

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 181.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0061.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0061

 

Administration's FY2013 Budget Proposals

 

Capital Gains and Dividend Provisions

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 182.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0061.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0062

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 183.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0062.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0062

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 184.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0062.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0062

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 185.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0062.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0062

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 186.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0062.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0062

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 187.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0062.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0062

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 188.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0062.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0062

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 189.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0062.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0063

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile, 2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 190.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0063.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0063

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 191.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0063.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0063

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 192.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0063.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0063

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 193.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0063.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0063

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 194.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0063.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0063

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 195.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0063.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0063

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 196.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0063.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0063

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 197.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0063.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0064

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 198.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0064.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0064

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 199.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0064.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0064

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 200.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0064.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0064

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 201.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0064.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0064

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 202.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0064.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0064

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 203.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0064.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0064

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 204.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0064.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0065

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile, 2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 205.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0065.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0065

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 206.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0065.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0065

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 207.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0065.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0065

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 208.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0065.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0065

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 209.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0065.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0065

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 210.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0065.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0065

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 211.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0065.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0065

 

Administration's FY2013 Budget Proposals

 

Limit Itemized Deductions to 28 Percent

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 212.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0065.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0066

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 213.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0066.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0066

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 214.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0066.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0066

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 215.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0066.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0066

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 216.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0066.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0066

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 217.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0066.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0066

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 218.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0066.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0066

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 219.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0066.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0067

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile, 2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 220.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0067.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0067

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 221.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0067.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0067

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 222.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0067.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0067

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 223.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0067.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0067

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 224.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0067.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0067

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 225.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0067.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0067

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 226.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0067.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0067

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 227.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0067.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0068

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 228.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0068.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0068

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 229.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0068.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0068

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 230.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0068.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0068

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 231.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0068.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0068

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 232.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0068.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0068

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 233.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0068.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0068

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 234.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0068.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0069

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile, 2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 235.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0069.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0069

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 236.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0069.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0069

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 237.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0069.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0069

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 238.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0069.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0069

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 239.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0069.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0069

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 240.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0069.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0069

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 241.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0069.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0069

 

Administration's FY2013 Budget Proposals

 

Administration's Baseline

 

Baseline: Current Policy

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 242.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0069.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0070

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 243.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0070.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0070

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 244.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0070.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0070

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 245.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0070.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0070

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 246.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0070.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0070

 

Administration's FY2013 Budget Proposals Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 247.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0070.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0070

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 248.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0070.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0070

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 249.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0070.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0071

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile, 2013¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 250.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0071.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0071

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 251.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0071.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0071

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 252.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0071.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0071

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 253.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0071.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0071

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 254.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0071.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0071

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 255.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0071.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0071

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 256.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0071.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0071

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2013¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 257.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0071.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0072

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2015¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 258.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0072.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0072

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2015¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 259.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0072.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0072

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2015¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 260.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0072.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0072

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2015¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 261.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0072.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0072

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2015¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 262.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0072.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0072

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2015¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 263.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0072.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0072

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Level, 2015¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 264.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0072.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0073

 

Administration's FY2013 Budget Proposals Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile, 2015¹

 

Summary Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 265.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0073.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0073

 

Administration's FY2013 Budget Proposals Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile, 2015¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 266.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0073.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0073

 

Administration's FY2013 Budget Proposals Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2015¹

 

Detail Table

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 267.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0073.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0073

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2015¹

 

Detail Table -- Single Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 268.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0073.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0073

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2015¹

 

Detail Table -- Married Tax Units Filing Jointly

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 269.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0073.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0073

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2015¹

 

Detail Table -- Head of Household Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 270.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0073.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0073

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2015¹

 

Detail Table -- Tax Units with Children

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 271.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0073.pdf

 

 

 

 

_____________________________________________________________________

 

 

Table T12-0073

 

Administration's FY2013 Budget Proposals

 

Extend Current Policy

 

Baseline: Current Law

 

Distribution of Federal Tax Change by Cash Income Percentile

 

Adjusted for Family Size, 2015¹

 

Detail Table -- Elderly Tax Units

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 272.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0073.pdf

 

 

 

 

_____________________________________________________________________

 

 

T12-0074

 

Replace AMT with Fair Share Tax1

 

Impact on Individual Income Tax Revenue

 

(billions of current dollars), 2012-22^{2 3}

 

 

[Editor's Note: For a larger, searchable version of the table, see

 

Doc 2012-5986 , page 273.]

 

 

For full text of this table, see

 

http://www.taxpolicycenter.org/numbers/Content/pdf/T12-0074.pdf