JOINT COMMITTEE ON TAXATION September 14, 2021 JCX-44-21DISTRIBUTIONAL EFFECTS OF THE ESTIMATED BUDGETARY EFFECTS OF SUBTITLE B AND AN AMENDMENT IN THE NATURE OF A SUBTITUTE TO THE REVENUE PROVISIONS OF SUBTITLES F, G, H, AND I OF THE BUDGET RECONCILIATION LEGISLATIVE RECOMMENDATIONS BY THE COMMITTEE ON WAYS AND MEANS Calendar Year 2023  CHANGE INFEDERAL TAXES (3)FEDERAL TAXES (3)Average Tax Rate (4)INCOMEFEDERALUNDERUNDERPresent CATEGORY (2)TAXES (3)PRESENT LAWPROPOSALLawProposal MillionsPercentBillionsPercentBillionsPercentPercentPercentLess than $10,000...........-$9,944-256.3%$3.90.1%-$6.1-0.2%7.3%-11.5%$10,000 to $20,000........-$24,669(5)-$1.3(6)-$26.0-0.7%-0.5%-10.4%$20,000 to $30,000........-$18,719-87.4%$21.40.6%$2.70.1%4.3%0.5%$30,000 to $40,000........-$11,756-24.3%$48.31.3%$36.61.0%7.8%5.9%$40,000 to $50,000........-$9,750-13.9%$70.11.8%$60.41.6%10.4%9.0%$50,000 to $75,000........-$15,276-6.2%$244.76.4%$229.46.0%13.0%12.2%$75,000 to $100,000......-$9,181-3.4%$268.07.0%$258.86.8%15.8%15.3%$100,000 to $200,000.....-$17,646-1.8%$957.625.0%$939.924.6%19.1%18.8%$200,000 to $500,000.....$2,8620.3%$953.324.9%$956.225.1%24.1%24.1%$500,000 to $1,000,000..$5,5981.6%$352.09.2%$357.69.4%28.5%29.9%$1,000,000 and over........$96,49710.6%$908.323.7%$1,004.826.3%30.2%37.3%Total, All Taxpayers.......-$11,985-0.3%$3,826.3100.0%$3,814.3100.0%20.3%20.6% Source: Joint Committee on Taxation Detail may not add to total due to rounding. ----------------------------------------------------- (1) This table is a distr butional analysis of the proposals contained in JCX-35-21 and revenue table JCX-42-21, except the following: Subtitle B: automatic contr bution plans; Subtitle F: Part 1, Part 4 items 1 and 3, Part 6, and Part 7; Subtitle G: Part 3 items 1,4, and 5 , Part 4 items 1 and 5-7, Part 6; Subtitle H: Part 3 item 2, Part 5, Part 6, and Part 7; Subtitle I: Part 2 items 7-10, Part 3, Part 4, and Part 5 items 2, 3, 7, 8, 11, 12, 14, 15, and 17-20. (2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exempt interest, [2] employer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] workers' compensation, [5] nontaxable Social Security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preference items, [8] individual share of business taxes, and [9] excluded income of U.S. citizens living abroad. Categories are measured at 2021 levels. (3) Federal taxes are equal to individual income tax (including the outlay portion of refundable credits), employment tax (attributed to employees), excise taxes (attr buted to consumers), and corporate income taxes. The estimates of Federal taxes are preliminary and subject to change. Individuals who are dependents of other taxpayers and taxpayers with negative income are excluded from the analysis. Does not include indirect effects. (4) The average tax rate is equal to Federal taxes described in footnote (3) divided by income descr bed in footnote (2). (5) For returns in the $10,000 to $20,000 income category, Federal taxes would decrease from -$1.336 billion to -$26.006 billion. (6) Less than 0.05% JOINT COMMITTEE ON TAXATION September 14, 2021 JCX-44-21DISTRIBUTIONAL EFFECTS OF THE ESTIMATED BUDGETARY EFFECTS OF SUBTITLE B AND AN AMENDMENT IN THE NATURE OF A SUBTITUTE TO THE REVENUE PROVISIONS OF SUBTITLES F, G, H, AND I OF THE BUDGET RECONCILIATION LEGISLATIVE RECOMMENDATIONS BY THE COMMITTEE ON WAYS AND MEANS Calendar Year 2025  CHANGE INFEDERAL TAXES (3)FEDERAL TAXES (3)Average Tax Rate (4)INCOMEFEDERALUNDERUNDERPresent CATEGORY (2)TAXES (3)PRESENT LAWPROPOSALLawProposal MillionsPercentBillionsPercentBillionsPercentPercentPercentLess than $10,000...........-$10,380-286.8%$3.60.1%-$6.8-0.2%6.5%-12.1%$10,000 to $20,000........-$26,585(5)-$2.0(6)-$28.6-0.7%-0.8%-10.9%$20,000 to $30,000........-$19,710-83.3%$23.70.6%$4.00.1%4.5%0.7%$30,000 to $40,000........-$13,028-25.3%$51.51.3%$38.40.9%7.7%5.8%$40,000 to $50,000........-$11,196-14.9%$74.91.8%$63.71.6%10.4%8.9%$50,000 to $75,000........-$16,860-6.3%$266.76.5%$249.86.1%13.0%12.2%$75,000 to $100,000......-$9,052-3.1%$294.67.2%$285.57.0%15.8%15.3%$100,000 to $200,000.....-$14,751-1.4%$1,046.225.6%$1,031.525.1%19.1%18.9%$200,000 to $500,000.....$9,2540.9%$1,031.925.2%$1,041.225.4%24.1%24.4%$500,000 to $1,000,000..$9,9232.6%$379.49.3%$389.49.5%28.7%30.1%$1,000,000 and over........$111,97312.1%$924.022.6%$1,035.925.2%30.5%37.2%Total, All Taxpayers.......$9,5880.2%$4,094.5100.0%$4,104.1100.0%20.2%20.6% Source: Joint Committee on Taxation Detail may not add to total due to rounding. ----------------------------------------------------- (1) This table is a distr butional analysis of the proposals contained in JCX-35-21 and revenue table JCX-42-21, except the following: Subtitle B: automatic contr bution plans; Subtitle F: Part 1, Part 4 items 1 and 3, Part 6, and Part 7; Subtitle G: Part 3 items 1,4, and 5 , Part 4 items 1 and 5-7, Part 6; Subtitle H: Part 3 item 2, Part 5, Part 6, and Part 7; Subtitle I: Part 2 items 7-10, Part 3, Part 4, and Part 5 items 2, 3, 7, 8, 11, 12, 14, 15, and 17-20. (2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exempt interest, [2] employer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] workers' compensation, [5] nontaxable Social Security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preference items, [8] individual share of business taxes, and [9] excluded income of U.S. citizens living abroad. Categories are measured at 2021 levels. (3) Federal taxes are equal to individual income tax (including the outlay portion of refundable credits), employment tax (attributed to employees), excise taxes (attr buted to consumers), and corporate income taxes. The estimates of Federal taxes are preliminary and subject to change. Individuals who are dependents of other taxpayers and taxpayers with negative income are excluded from the analysis. Does not include indirect effects. (4) The average tax rate is equal to Federal taxes described in footnote (3) divided by income descr bed in footnote (2). (5) For returns in the $10,000 to $20,000 income category, Federal taxes would increase from -$1.996 billion to -$28.580 billion. (6) Less than 0.05% JOINT COMMITTEE ON TAXATION September 14, 2021 JCX-44-21DISTRIBUTIONAL EFFECTS OF THE ESTIMATED BUDGETARY EFFECTS OF SUBTITLE B AND AN AMENDMENT IN THE NATURE OF A SUBTITUTE TO THE REVENUE PROVISIONS OF SUBTITLES F, G, H, AND I OF THE BUDGET RECONCILIATION LEGISLATIVE RECOMMENDATIONS BY THE COMMITTEE ON WAYS AND MEANS Calendar Year 2027  CHANGE INFEDERAL TAXES (3)FEDERAL TAXES (3)Average Tax Rate (4)INCOMEFEDERALUNDERUNDERPresent CATEGORY (2)TAXES (3)PRESENT LAWPROPOSALLawProposal MillionsPercentBillionsPercentBillionsPercentPercentPercentLess than $10,000...........-$3,556-102.7%$3.50.1%-$0.10.0%5.8%-0.2%$10,000 to $20,000........-$6,075(5)-$0.2(6)-$6.3-0.1%-0.1%-2.2%$20,000 to $30,000........-$509-1.6%$31.10.7%$30.60.6%5.5%5.4%$30,000 to $40,000........$380.1%$62.41.3%$62.51.3%8.7%8.7%$40,000 to $50,000........$2070.2%$86.31.8%$86.51.8%11.2%11.3%$50,000 to $75,000........$3,2551.0%$311.86.7%$315.06.5%14.0%14.2%$75,000 to $100,000......$4,5131.3%$344.37.4%$348.97.2%16.8%17.1%$100,000 to $200,000.....$17,6031.5%$1,204.825.8%$1,222.425.4%20.2%20.5%$200,000 to $500,000.....$23,9342.0%$1,193.125.6%$1,217.025.3%25.6%26.1%$500,000 to $1,000,000..$11,5502.6%$442.29.5%$453.89.4%30.7%31.9%$1,000,000 and over........$103,93610.5%$985.421.1%$1,089.322.6%32.0%38.1%Total, All Taxpayers.......$154,8963.3%$4,664.7100.0%$4,819.6100.0%21.4%22.3% Source: Joint Committee on Taxation Detail may not add to total due to rounding. ----------------------------------------------------- (1) This table is a distr butional analysis of the proposals contained in JCX-35-21 and revenue table JCX-42-21, except the following: Subtitle B: automatic contr bution plans; Subtitle F: Part 1, Part 4 items 1 and 3, Part 6, and Part 7; Subtitle G: Part 3 items 1,4, and 5 , Part 4 items 1 and 5-7, Part 6; Subtitle H: Part 3 item 2, Part 5, Part 6, and Part 7; Subtitle I: Part 2 items 7-10, Part 3, Part 4, and Part 5 items 2, 3, 7, 8, 11, 12, 14, 15, and 17-20. (2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exempt interest, [2] employer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] workers' compensation, [5] nontaxable Social Security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preference items, [8] individual share of business taxes, and [9] excluded income of U.S. citizens living abroad. Categories are measured at 2021 levels. (3) Federal taxes are equal to individual income tax (including the outlay portion of refundable credits), employment tax (attributed to employees), excise taxes (attr buted to consumers), and corporate income taxes. The estimates of Federal taxes are preliminary and subject to change. Individuals who are dependents of other taxpayers and taxpayers with negative income are excluded from the analysis. Does not include indirect effects. (4) The average tax rate is equal to Federal taxes described in footnote (3) divided by income descr bed in footnote (2). (5) For returns in the $10,000 to $20,000 income category, Federal taxes would increase from -$0.211 billion to -$6.286 billion. (6) Less than 0.05% JOINT COMMITTEE ON TAXATION September 14, 2021 JCX-44-21DISTRIBUTIONAL EFFECTS OF THE ESTIMATED BUDGETARY EFFECTS OF SUBTITLE B AND AN AMENDMENT IN THE NATURE OF A SUBTITUTE TO THE REVENUE PROVISIONS OF SUBTITLES F, G, H, AND I OF THE BUDGET RECONCILIATION LEGISLATIVE RECOMMENDATIONS BY THE COMMITTEE ON WAYS AND MEANS Calendar Year 2029  CHANGE INFEDERAL TAXES (3)FEDERAL TAXES (3)Average Tax Rate (4)INCOMEFEDERALUNDERUNDERPresent CATEGORY (2)TAXES (3)PRESENT LAWPROPOSALLawProposal MillionsPercentBillionsPercentBillionsPercentPercentPercentLess than $10,000...........-$3,907-184.4%$2.1(5)-$1.8(5)2.7%-2.3%$10,000 to $20,000........-$6,334-544.0%$1.2(5)-$5.2-0.1%0.3%-1.5%$20,000 to $30,000........-$576-1.3%$44.30.9%$43.80.9%6.2%6.1%$30,000 to $40,000........-$142-0.2%$76.61.5%$76.41.5%9.1%9.1%$40,000 to $50,000........$1(5)$111.42.2%$111.42.2%12.0%12.0%$50,000 to $75,000........$2,6410.7%$376.97.5%$379.57.4%14.5%14.6%$75,000 to $100,000......$3,6090.9%$399.78.0%$403.37.8%17.2%17.4%$100,000 to $200,000.....$13,2461.0%$1,346.126.9%$1,359.326.5%20.5%20.7%$200,000 to $500,000.....$18,6081.5%$1,225.024.5%$1,243.624.2%26.2%26.6%$500,000 to $1,000,000..$9,3862.1%$441.78.8%$451.08.8%30.7%31.8%$1,000,000 and over........$96,5079.8%$980.619.6%$1,077.221.0%31.8%37.7%Total, All Taxpayers.......$133,0392.7%$5,005.5100.0%$5,138.5100.0%21.2%22.0% Source: Joint Committee on Taxation Detail may not add to total due to rounding. ----------------------------------------------------- (1) This table is a distr butional analysis of the proposals contained in JCX-35-21 and revenue table JCX-42-21, except the following: Subtitle B: automatic contr bution plans; Subtitle F: Part 1, Part 4 items 1 and 3, Part 6, and Part 7; Subtitle G: Part 3 items 1,4, and 5 , Part 4 items 1 and 5-7, Part 6; Subtitle H: Part 3 item 2, Part 5, Part 6, and Part 7; Subtitle I: Part 2 items 7-10, Part 3, Part 4, and Part 5 items 2, 3, 7, 8, 11, 12, 14, 15, and 17-20. (2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exempt interest, [2] employer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] workers' compensation, [5] nontaxable Social Security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preference items, [8] individual share of business taxes, and [9] excluded income of U.S. citizens living abroad. Categories are measured at 2021 levels. (3) Federal taxes are equal to individual income tax (including the outlay portion of refundable credits), employment tax (attributed to employees), excise taxes (attr buted to consumers), and corporate income taxes. The estimates of Federal taxes are preliminary and subject to change. Individuals who are dependents of other taxpayers and taxpayers with negative income are excluded from the analysis. Does not include indirect effects. (4) The average tax rate is equal to Federal taxes described in footnote (3) divided by income descr bed in footnote (2). (5) Less than 0.05% JOINT COMMITTEE ON TAXATION September 14, 2021 JCX-44-21DISTRIBUTIONAL EFFECTS OF THE ESTIMATED BUDGETARY EFFECTS OF SUBTITLE B AND AN AMENDMENT IN THE NATURE OF A SUBTITUTE TO THE REVENUE PROVISIONS OF SUBTITLES F, G, H, AND I OF THE BUDGET RECONCILIATION LEGISLATIVE RECOMMENDATIONS BY THE COMMITTEE ON WAYS AND MEANS Calendar Year 2031  CHANGE INFEDERAL TAXES (3)FEDERAL TAXES (3)Average Tax Rate (4)INCOMEFEDERALUNDERUNDERPresent CATEGORY (2)TAXES (3)PRESENT LAWPROPOSALLawProposal MillionsPercentBillionsPercentBillionsPercentPercentPercentLess than $10,000...........-$4,318-183.0%$2.4(6)-$2.0(6)3.2%-2.7%$10,000 to $20,000........-$6,468(5)-$1.3(6)-$7.8-0.1%-0.4%-2.4%$20,000 to $30,000........-$522-1.4%$38.30.7%$37.80.7%5.7%5.6%$30,000 to $40,000........-$260-0.4%$72.01.3%$71.81.3%8.6%8.6%$40,000 to $50,000........-$120-0.1%$99.11.8%$99.01.8%11.1%11.1%$50,000 to $75,000........$2,3970.7%$366.26.8%$368.66.7%14.0%14.1%$75,000 to $100,000......$3,1480.8%$413.77.7%$416.87.6%16.7%16.8%$100,000 to $200,000.....$11,0750.8%$1,409.826.2%$1,420.925.8%19.9%20.1%$200,000 to $500,000.....$15,8351.1%$1,399.226.0%$1,415.025.7%25.5%25.9%$500,000 to $1,000,000..$8,4211.6%$514.19.6%$522.59.5%30.5%31.4%$1,000,000 and over........$97,5689.2%$1,058.419.7%$1,156.021.0%31.7%37.2%Total, All Taxpayers.......$126,7562.4%$5,371.9100.0%$5,498.7100.0%21.1%21.8% Source: Joint Committee on Taxation Detail may not add to total due to rounding. ----------------------------------------------------- (1) This table is a distr butional analysis of the proposals contained in JCX-35-21 and revenue table JCX-42-21, except the following: Subtitle B: automatic contr bution plans; Subtitle F: Part 1, Part 4 items 1 and 3, Part 6, and Part 7; Subtitle G: Part 3 items 1,4, and 5 , Part 4 items 1 and 5-7, Part 6; Subtitle H: Part 3 item 2, Part 5, Part 6, and Part 7; Subtitle I: Part 2 items 7-10, Part 3, Part 4, and Part 5 items 2, 3, 7, 8, 11, 12, 14, 15, and 17-20. (2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exempt interest, [2] employer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] workers' compensation, [5] nontaxable Social Security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preference items, [8] individual share of business taxes, and [9] excluded income of U.S. citizens living abroad. Categories are measured at 2021 levels. (3) Federal taxes are equal to individual income tax (including the outlay portion of refundable credits), employment tax (attributed to employees), excise taxes (attr buted to consumers), and corporate income taxes. The estimates of Federal taxes are preliminary and subject to change. Individuals who are dependents of other taxpayers and taxpayers with negative income are excluded from the analysis. Does not include indirect effects. (4) The average tax rate is equal to Federal taxes described in footnote (3) divided by income descr bed in footnote (2). (5) For returns in the $10,000 to $20,000 income category, Federal taxes would decrease from -$1.299 billion to -$7.768 billion. (6) Less than 0.05%

JCT Estimates Distributional Impact of Revenue Proposals

U.S. Joint Committee on Taxation

The Joint Committee on Taxation in a September 14 report provided estimates on the distributional impact of estimated tax changes from the revenue provisions of the House Ways and Means Committee chair's substitute to budget reconciliation recommendations.

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

The Joint Committee on Taxation in a September 14 report provided estimates on the distributional impact of estimated tax changes from the revenue provisions of the House Ways and Means Committee chair's substitute to budget reconciliation recommendations.

The Joint Committee on Taxation in a September 14 report (JCX-44-21) provided estimates on the distributional impact of estimated tax changes from the revenue provisions of the House Ways and Means Committee chair's <a href="/lr/resolve//78493">substitute</a> to budget reconciliation recommendations. The estimates covered calendar years 2023, 2025, 2027, 2029, and 2031, and would reduce overall federal taxes by $12 billion in 2023 and then increase total federal taxes in the following years, with most of the increases coming from higher-income taxpayers, while taxes would be reduced for lower-income taxpayers.

The Joint Committee on Taxation in a September 14 report (JCX-44-21) provided estimates on the distributional impact of estimated tax changes from the revenue provisions of the House Ways and Means Committee chair's substitute to budget reconciliation recommendations. The estimates covered calendar years 2023, 2025, 2027, 2029, and 2031, and would reduce overall federal taxes by $12 billion in 2023 and then increase total federal taxes in the following years, with most of the increases coming from higher-income taxpayers, while taxes would be reduced for lower-income taxpayers.