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Tax Policy Center Releases Estimates on Taxing Capital Gains as Ordinary Income

AUG. 7, 2007

T07-0212

DATED AUG. 7, 2007
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Citations: T07-0212
PRELIMINARY RESULTS

 Table T07-0212

 

     Tax Capital Gains and Qualified Dividends as Ordinary Income

 

    Static Impact on Individual Income Tax Liability and Revenue ($

 

                          billions), 2007-171

 

 

                                                      Year

 

                          2007   2008   2009   2010   2011   2012   2013   2014

 

 

 Fiscal Year Revenue2

 

   Capital Gains          33.5   83.7   84.5   84.8   83.4   85.1   88.3   91.7

 

   Qualified Dividends     4.9   12.8   14.0   14.7    9.0    0.0    0.0    0.0

 

   Total                  38.4   96.5   98.5   99.5   92.5   85.1   88.3   91.7

 

 

 Calendar Year Liability

 

   Capital Gains          83.7   83.6   85.9   83.1   83.9   86.9   90.3   93.9

 

   Qualified Dividends    12.3   13.7   14.4   15.1    0.0    0.0    0.0    0.0

 

   Total                  96.0   97.3  100.3   98.2   83.9   86.9   90.3   93.9

 

 

                           [table continued]

 

 

                                               Year

 

                                 2015   2016   2017   2007-17

 

 

 Fiscal Year Revenue2

 

   Capital Gains                 95.5   99.7  104.1     934.4

 

   Qualified Dividends            0.0    0.0    0.0      55.4

 

   Total                         95.5   99.7  104.1     989.8

 

 

 Calendar Year Liability

 

   Capital Gains                 98.0   02.3  106.8     998.5

 

   Qualified Dividends            0.0    0.0    0.0      55.4

 

   Total                         98.0   02.3  106.8     053.9

 

 

 Source: Urban-Brookings Tax Policy Center Microsimulation Model

 

 (version 1006-2).

 

 

                               FOOTNOTES

 

 

      1 Proposal is effective 01/01/07. Baseline is current

 

 law. Proposal repeals the preferential rates for capital gains and

 

 qualified dividends and taxes them as ordinary income. Estimates are

 

 static and do not account for any potential microeconomic behavioral

 

 response.  Official estimates from the Joint Committee on Taxation

 

 would show a somewhat different revenue effect.

 

 

      2 Fiscal-year revenue numbers assume a 40-60 split. The

 

 actual effect on receipts could differ.

 

 

                            END OF FOOTNOTES
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