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Appendix E: Revenue Options and Their Implications
Pages 275-298

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From page 275... ... of the Urban Institute and Brookings Institution used specified assumptions provided by the study committee to model both the illustrative current tax and simplified tax structures over a nearly 75-year period. TPC estimated microdynamic taxpayer responses to specific tax changes. Read the entire page →
From page 276... ... Because the low revenue scenario retains the rates and other features of the personal income tax under current law, the rates shown in Table E-1(A) are constant over time. Read the entire page →
From page 277... ... NA NA NA NA NA NA NA NA (B) Intermediate- Spending and Reenues Scenario Personal Income Taxa Regular Tax 10 11.6 12.7 12.4 11.6 10.6 10.3 10.5 10.4 15 17.4 19.1 18.6 17.4 15.9 15.4 15.7 15.7 25 29.1 31.8 31.0 29.0 26.5 25.7 26.1 26.1 28 32.5 35.6 34.7 32.5 29.7 28.8 29.3 29.2 33 38.4 42.0 40.9 38.3 35.0 34.0 34.5 34.5 35 40.7 44.5 43.4 40.6 37.2 36.0 36.6 36.6 continued Read the entire page →
From page 278... ... NA NA NA NA NA NA NA NA (C) Intermediate- Spending and Reenues Scenario Personal Income Taxa Regular Tax 10 10.9 11.4 11.7 11.9 11.7 11.8 12.1 12.2 15 16.4 17.1 17.6 17.9 17.5 17.7 18.2 18.2 25 27.3 28.5 29.4 29.8 29.2 29.4 30.3 30.4 28 30.5 31.9 32.9 33.3 32.8 33.0 33.9 34.0 33 36.0 37.7 38.8 39.3 38.6 38.8 40.0 40.1 35 38.2 39.9 41.1 41.7 40.9 41.2 42.4 42.5 Capital Gains and Qualified Dividends 15 16.4 17.1 17.6 17.9 17.5 17.7 18.2 18.2 Alternative Minimum Tax 26 28.3 29.7 30.5 31.0 30.4 30.6 31.5 31.6 28 30.5 31.9 32.9 33.3 32.8 33.0 33.9 34.0 VAT (if added; there is no current U.S. Read the entire page →
From page 279... ... aCurrent law is in left-most column. Read the entire page →
From page 280... ... Lower Bracket 10.0 9.4 8.8 8.4 8.1 7.9 7.7 7.5 Upper Bracket 25.0 23.4 22.0 20.9 20.2 19.8 19.2 18.8 Bracket Thresholds (Current Dollars) Lower Bracket 36,550 41,300 51,050 63,450 78,900 98,075 121,925 151,550 Upper Bracket 73,100 82,600 102,100 126,900 157,800 196,150 243,850 303,100 Standard Deduction (Current Dollars) Read the entire page →
From page 281... ... Lower Bracket 10.0 9.9 9.5 9.3 8.9 8.8 8.8 8.7 Upper Bracket 25.0 24.6 23.9 23.2 22.2 22.0 22.0 21.8 Bracket Thresholds (Current Dollars) Lower Bracket 29,950 33,850 41,825 52,000 64,625 80,350 99,900 124,175 Upper Bracket 59,900 67,700 83,650 104,000 129,250 160,700 199,800 248,350 Standard Deduction (Current Dollars) Read the entire page →
From page 282... ... TABLE E-2 Continued Standard Deduction (Current Dollars) 5,200 5,900 7,300 9,100 11,300 14,050 17,500 21,750 10,500 11,850 14,650 18,200 22,650 28,150 35,000 43,500 Capital Gains & Qualified Dividend Tax Rate (Percentages) Read the entire page →
From page 283... ... aCompared with the after-tax income under current law. "Minus" means that after-tax income is reduced. Read the entire page →
From page 284... ... aCompared with the after-tax income under current law. "Minus" means that after-tax income is reduced. Read the entire page →
From page 285... ... aCompared with the after-tax income under current law. "Minus" means that after-tax income is reduced. Read the entire page →
From page 286... ... aCompared with the after-tax income under current law. "Minus" means that after-tax income is reduced. Read the entire page →
From page 287... ... aCompared with the after-tax income under current law. "Minus" means that after-tax income is reduced. Read the entire page →
From page 288... ... aCompared with the after-tax income under current law. "Minus" means that after-tax income is reduced. Read the entire page →
From page 289... ... aCompared with the after-tax income under current law. "Minus" means that after-tax income is reduced. Read the entire page →
From page 290... ... aCompared with the after-tax income under current law. "Minus" means that after-tax income is reduced. Read the entire page →
From page 291... ... APPENDIX E TABLE E-11 Simplified Tax Structure: Average Tax Rates and Tax Distribution for Virtually All Federal Taxes Combined, 2012 Average Tax Rate Percentage Share Percentage Change in After-Tax Incomea (percentage) of Tax Burden Low Spending and Reenues Scenario First Quintile 4.5 0.8 0.1 Second Quintile 10.2 4.2 0.1 Third Quintile 15.7 10.6 0.7 Fourth Quintile 18.6 17.9 0.7 Fifth Quintile 25.1 66.4 –0.1 All 20.6 100.0 0.2 Top 10 Percent 26.2 52.2 –0.2 Top 5 Percent 26.9 41.2 0.2 Intermediate- Spending and Reenues Scenario First Quintile 5.2 0.9 –0.6 Second Quintile 11.1 4.2 –0.9 Third Quintile 17.8 11.1 –1.8 Fourth Quintile 20.9 18.7 –2.2 Fifth Quintile 26.5 65.1 –2.1 All 22.2 100.0 –1.9 Top 10 Percent 27.2 50.2 –1.4 Top 5 Percent 27.5 39.1 –0.6 Intermediate- Spending and Reenues Scenario First Quintile 4.9 0.9 –0.3 Second Quintile 10.7 4.2 –0.5 Third Quintile 16.8 10.8 –0.6 Fourth Quintile 19.8 18.2 –0.8 Fifth Quintile 26.0 65.8 –1.3 All 21.5 100.0 –1.0 Top 10 Percent 26.8 51.1 –0.9 Top 5 Percent 27.3 40.0 –0.3 High Spending and Reenues Scenario First Quintile 5.4 0.9 –0.8 Second Quintile 11.5 4.2 –1.3 Third Quintile 18.6 11.3 –2.8 Fourth Quintile 21.9 19.0 –3.5 Fifth Quintile 27.0 64.4 –2.6 All 22.8 100.0 –2.6 Top 10 Percent 27.5 49.4 –1.8 Top 5 Percent 27.7 38.3 –0.8 aCompared with the after-tax income under current law. Read the entire page →
From page 292... ... APPENDIX E TABLE E-12 Simplified Tax Structure: Average Tax Rates and Tax Distribution for Virtually All Federal Taxes Combined, 2020 Average Tax Rate Percentage Share Percentage Change in After-Tax Incomea (percentage) of Tax Burden Low Spending and Reenues Scenario First Quintile 5.2 0.9 –0.3 Second Quintile 10.7 4.3 –0.8 Third Quintile 16.3 10.7 0.4 Fourth Quintile 19.6 19.1 0.4 Fifth Quintile 24.3 64.8 0.5 All 20.6 100.0 0.3 Top 10 Percent 24.9 49.4 0.8 Top 5 Percent 25.1 37.8 1.3 Intermediate- Spending and Reenues Scenario First Quintile 7.2 1.1 –2.4 Second Quintile 13.3 4.4 –3.7 Third Quintile 20.9 11.4 –5.1 Fourth Quintile 24.9 20.2 –6.2 Fifth Quintile 28.4 62.8 –4.8 All 24.7 100.0 –4.9 Top 10 Percent 28.5 47.0 –4.0 Top 5 Percent 28.4 35.5 –3.1 Intermediate- Spending and Reenues Scenario First Quintile 6.7 1.0 –1.9 Second Quintile 12.5 4.4 –2.9 Third Quintile 19.4 11.1 –3.3 Fourth Quintile 23.0 19.7 –3.8 Fifth Quintile 27.2 63.6 –3.3 All 23.5 100.0 –3.3 Top 10 Percent 27.6 48.0 –2.7 Top 5 Percent 27.6 36.4 –2.0 High Spending and Reenues Scenario First Quintile 7.6 1.0 –2.8 Second Quintile 14.3 4.4 –4.8 Third Quintile 22.5 11.4 –7.1 Fourth Quintile 26.9 20.3 –8.7 Fifth Quintile 30.6 62.8 –7.8 All 26.7 100.0 –7.4 Top 10 Percent 30.8 47.0 –7.0 Top 5 Percent 30.6 35.5 –6.1 aCompared with the after-tax income under current law. Read the entire page →
From page 293... ... of Tax Burden Low Spending and Reenues Scenario First Quintile 6.2 1.1 –0.9 Second Quintile 11.5 4.6 –1.2 Third Quintile 17.4 11.0 –0.1 Fourth Quintile 20.8 19.9 0.0 Fifth Quintile 24.7 63.4 1.1 All 21.2 100.0 0.4 Top 10 Percent 25.1 48.1 1.7 Top 5 Percent 25.3 36.7 2.3 Intermediate- Spending and Reenues Scenario First Quintile 8.8 1.3 –3.7 Second Quintile 15.1 4.9 –5.1 Third Quintile 22.6 11.8 –6.4 Fourth Quintile 26.6 20.9 –7.3 Fifth Quintile 28.8 60.9 –4.4 All 25.7 100.0 –5.3 Top 10 Percent 28.8 45.4 –3.3 Top 5 Percent 28.6 34.2 –2.2 Intermediate- Spending and Reenues Scenario First Quintile 9.0 1.4 –3.9 Second Quintile 15.1 5.0 –5.1 Third Quintile 22.0 11.7 –5.7 Fourth Quintile 25.6 20.5 –6.1 Fifth Quintile 28.6 61.4 –4.1 All 25.3 100.0 –4.8 Top 10 Percent 28.7 46.1 –3.2 Top 5 Percent 28.7 34.9 –2.3 High Spending and Reenues Scenario First Quintile 9.8 1.3 –4.7 Second Quintile 17.0 5.1 –7.3 Third Quintile 24.9 11.9 –9.1 Fourth Quintile 28.8 20.8 –10.1 Fifth Quintile 31.4 60.9 –7.9 All 28.1 100.0 –8.4 Top 10 Percent 31.6 45.6 –7.0 Top 5 Percent 31.4 34.4 –6.0 aCompared with the after-tax income under current law. "Minus" means that after-tax income is reduced. Read the entire page →
From page 294... ... APPENDIX E TABLE E-14 Simplified Tax Structure: Average Tax Rates and Tax Distribution for Virtually All Federal Taxes Combined, 2040 Average Tax Rate Percentage Share Percentage Change in After-Tax Incomea (percentage) of Tax Burden Low Spending and Reenues Scenario First Quintile 7.6 1.3 –1.7 Second Quintile 12.6 4.8 –1.6 Third Quintile 18.3 11.0 –0.6 Fourth Quintile 22.1 20.1 –0.4 Fifth Quintile 24.0 62.7 1.7 All 21.4 100.0 0.5 Top 10 Percent 24.1 47.8 2.4 Top 5 Percent 24.0 36.5 2.8 Intermediate- Spending and Reenues Scenario First Quintile 10.2 1.5 –4.5 Second Quintile 16.4 5.3 –6.0 Third Quintile 23.3 11.9 –6.6 Fourth Quintile 27.3 21.1 –7.0 Fifth Quintile 27.1 60.1 –2.4 All 25.2 100.0 –4.3 Top 10 Percent 26.6 45.0 –1.1 Top 5 Percent 26.2 33.9 –0.1 Intermediate- Spending and Reenues Scenario First Quintile 10.1 1.5 –4.4 Second Quintile 16.0 5.1 –5.5 Third Quintile 23.0 11.5 –6.3 Fourth Quintile 27.4 20.7 –7.1 Fifth Quintile 28.2 61.2 –3.9 All 25.8 100.0 –5.1 Top 10 Percent 28.0 46.1 –2.9 Top 5 Percent 27.7 35.0 –2.1 High Spending and Reenues Scenario First Quintile 11.3 1.5 –5.7 Second Quintile 18.9 5.3 –8.7 Third Quintile 26.5 11.8 –10.6 Fourth Quintile 30.9 20.8 –11.7 Fifth Quintile 31.4 60.6 –8.3 All 29.0 100.0 –9.2 Top 10 Percent 31.2 45.7 –7.2 Top 5 Percent 30.8 34.7 –6.4 aCompared with the after-tax income under current law. Read the entire page →
From page 295... ... APPENDIX E TABLE E-15 Simplified Tax Structure: Average Tax Rates and Tax Distribution for Virtually All Federal Taxes Combined, 2050 Average Tax Rate Percentage Share Percentage Change in After-Tax Incomea (percentage) of Tax Burden Low Spending and Reenues Scenario First Quintile 8.8 1.5 –2.0 Second Quintile 13.6 4.9 –2.0 Third Quintile 19.1 11.2 –1.0 Fourth Quintile 23.0 20.3 –0.8 Fifth Quintile 23.4 62.1 2.1 All 21.6 100.0 0.6 Top 10 Percent 23.3 47.6 2.8 Top 5 Percent 23.0 36.5 3.1 Intermediate- Spending and Reenues Scenario First Quintile 11.5 1.7 –4.8 Second Quintile 17.4 5.6 –6.3 Third Quintile 23.3 12.2 –6.2 Fourth Quintile 26.9 21.2 –5.9 Fifth Quintile 25.1 59.2 –0.1 All 24.2 100.0 –2.8 Top 10 Percent 24.5 44.6 1.2 Top 5 Percent 23.8 33.7 2.0 Intermediate- Spending and Reenues Scenario First Quintile 11.5 1.6 –4.9 Second Quintile 17.3 5.2 –6.2 Third Quintile 23.7 11.7 –6.7 Fourth Quintile 28.0 20.8 –7.2 Fifth Quintile 27.2 60.5 –2.9 All 25.6 100.0 –4.6 Top 10 Percent 26.8 46.0 –1.8 Top 5 Percent 26.2 35.1 –1.2 High Spending and Reenues Scenario First Quintile 12.7 1.6 –6.2 Second Quintile 20.3 5.5 –9.6 Third Quintile 27.2 11.9 –11.0 Fourth Quintile 31.3 20.6 –11.6 Fifth Quintile 30.6 60.4 –7.5 All 28.9 100.0 –8.9 Top 10 Percent 30.3 46.1 –6.5 Top 5 Percent 29.8 35.2 –6.0 aCompared with the after-tax income under current law. Read the entire page →
From page 296... ... APPENDIX E TABLE E-16 Simplified Tax Structure: Average Tax Rates and Tax Distribution for Virtually All Federal Taxes Combined, 2060 Average Tax Rate Percentage Share Percentage Change in After-Tax Incomea (percentage) of Tax Burden Low Spending and Reenues Scenario First Quintile 9.6 1.5 –2.4 Second Quintile 14.7 5.0 –2.2 Third Quintile 20.5 12.2 –1.3 Fourth Quintile 23.7 20.7 –0.9 Fifth Quintile 23.4 60.5 2.4 All 22.0 100.0 0.7 Top 10 Percent 23.2 46.5 3.1 Top 5 Percent 22.8 35.7 3.3 Intermediate- Spending and Reenues Scenario First Quintile 12.1 1.7 –5.1 Second Quintile 18.4 5.7 –6.4 Third Quintile 24.3 13.2 –6.0 Fourth Quintile 27.0 21.5 –5.3 Fifth Quintile 24.6 57.8 0.8 All 24.2 100.0 –2.1 Top 10 Percent 23.9 43.6 2.1 Top 5 Percent 23.1 33.0 2.8 Intermediate- Spending and Reenues Scenario First Quintile 12.4 1.6 –5.4 Second Quintile 18.7 5.3 –6.8 Third Quintile 25.5 12.6 –7.5 Fourth Quintile 28.9 20.9 –7.7 Fifth Quintile 27.9 59.6 –3.7 All 26.6 100.0 –5.3 Top 10 Percent 27.5 45.7 –2.8 Top 5 Percent 27.0 35.0 –2.3 High Spending and Reenues Scenario First Quintile 14.3 1.6 –7.5 Second Quintile 22.5 5.5 –11.1 Third Quintile 29.8 12.8 –12.8 Fourth Quintile 33.1 20.9 –13.1 Fifth Quintile 31.7 59.0 –8.6 All 30.5 100.0 –10.2 Top 10 Percent 31.2 45.2 –7.6 Top 5 Percent 30.5 34.7 –7.1 aCompared with the after-tax income under current law. Read the entire page →
From page 297... ... APPENDIX E TABLE E-17 Simplified Tax Structure: Average Tax Rates and Tax Distribution for Virtually All Federal Taxes Combined, 2070 Average Tax Rate Percentage Share Percentage Change in After-Tax Incomea (percentage) of Tax Burden Low Spending and Reenues Scenario First Quintile 9.3 1.5 –2.6 Second Quintile 15.5 5.1 –2.2 Third Quintile 21.4 12.7 –1.6 Fourth Quintile 23.7 21.1 –0.9 Fifth Quintile 23.3 59.6 2.6 All 22.1 100.0 0.8 Top 10 Percent 22.9 45.7 3.4 Top 5 Percent 22.4 34.9 3.5 Intermediate- Spending and Reenues Scenario First Quintile 11.8 1.7 –5.3 Second Quintile 19.4 5.7 –6.7 Third Quintile 25.4 13.6 –6.6 Fourth Quintile 27.1 21.7 –5.3 Fifth Quintile 24.8 57.3 0.6 All 24.5 100.0 –2.4 Top 10 Percent 24.0 43.2 1.9 Top 5 Percent 23.3 32.6 2.5 Intermediate- Spending and Reenues Scenario First Quintile 12.4 1.6 –5.9 Second Quintile 20.3 5.4 –7.7 Third Quintile 27.2 13.2 –8.9 Fourth Quintile 29.5 21.4 –8.5 Fifth Quintile 27.9 58.3 –3.6 All 27.1 100.0 –5.7 Top 10 Percent 27.3 44.4 –2.5 Top 5 Percent 26.6 33.7 –2.0 High Spending and Reenues Scenario First Quintile 13.9 1.6 –7.5 Second Quintile 23.1 5.6 –11.0 Third Quintile 30.2 13.3 –12.7 Fourth Quintile 32.3 21.2 –12.1 Fifth Quintile 30.8 58.3 –7.5 All 29.9 100.0 –9.4 Top 10 Percent 30.3 44.6 –6.5 Top 5 Percent 29.7 34.0 –6.1 aCompared with the after-tax income under current law. Read the entire page →
From page 298... ... APPENDIX E TABLE E-18 Simplified Tax Structure: Average Tax Rates and Tax Distribution for Virtually All Federal Taxes Combined, 2080 Average Tax Rate Percentage Share Percentage Change in After-Tax Incomea (percentage) of Tax Burden Low Spending and Reenues Scenario First Quintile 9.2 1.3 –2.6 Second Quintile 15.7 4.7 –2.3 Third Quintile 22.0 12.9 –1.7 Fourth Quintile 24.0 21.3 –1.0 Fifth Quintile 23.4 59.8 2.7 All 22.4 100.0 0.8 Top 10 Percent 23.0 45.8 3.5 Top 5 Percent 22.4 35.3 3.6 Intermediate- Spending and Reenues Scenario First Quintile 11.8 1.5 –5.4 Second Quintile 19.6 5.3 –6.9 Third Quintile 26.0 13.7 –6.7 Fourth Quintile 27.5 21.9 –5.4 Fifth Quintile 25.0 57.5 0.5 All 24.9 100.0 –2.4 Top 10 Percent 24.2 43.5 1.9 Top 5 Percent 23.2 33.0 2.5 Intermediate- Spending and Reenues Scenario First Quintile 12.3 1.4 –5.9 Second Quintile 20.6 5.0 –8.0 Third Quintile 28.0 13.3 –9.3 Fourth Quintile 30.0 21.6 –8.8 Fifth Quintile 28.2 58.6 –3.8 All 27.6 100.0 –5.9 Top 10 Percent 27.5 44.6 –2.6 Top 5 Percent 26.6 34.1 –2.0 High Spending and Reenues Scenario First Quintile 15.4 1.4 –9.2 Second Quintile 26.2 5.1 –14.5 Third Quintile 35.0 13.3 –18.1 Fourth Quintile 37.2 21.4 –18.1 Fifth Quintile 35.4 58.8 –13.5 All 34.6 100.0 –15.0 Top 10 Percent 34.8 45.1 –12.3 Top 5 Percent 33.9 34.7 –11.7 aCompared with the after-tax income under current law. Read the entire page →

From page 275...

... of the Urban Institute and Brookings Institution used specified assumptions provided by the study committee to model both the illustrative current tax and simplified tax structures over a nearly 75-year period. TPC estimated microdynamic taxpayer responses to specific tax changes.

Appendix E: Revenue Options and Their Implications Pages 275-298

Appendix E: Revenue Options and Their Implications
Pages 275-298