DISTRIBUTIONAL EFFECTS OF THE CHAIRMAN’S AMENDMENT 

IN THE NATURE OF A SUBSTITUTE TO H.R. 3916 

(REPEAL OF THE FEDERAL COMMUNICATIONS EXCISE TAX) 

FOR MARKUP BY THE COMMITTEE ON WAYS AND MEANS ON MAY 17

Prepared by the Staff 

of the 

JOINT COMMITTEE ON TAXATION 

May 16, 2000 

JCX-50-00 
DISTRIBUTIONAL EFFECTS OF THE CHAIRMAN’S AMENDMENT IN THE NATURE OF A SUBSTITUT

(REPEAL OF THE FEDERAL COMMUNICATIONS EXCISE TAX (1)) 

FOR MARKUP BY THE COMMITTEE ON WAYS AND MEANS ON MAY 17, 2000 

 Calendar Year 2000

CHANGE IN FEDERAL TAXES (3) FEDERAL TAXES (3) Effec

INCOME FEDERAL UNDER UNDER Prese

CATEGORY (2) TAXES (3) PRESENT LAW PROPOSAL Law 

Millions Percent Billions Percent Billions Percent Perce

Less than $10,000......... -$39 -0.6% $7 0.4% $7 0.4% 8.3%  10,000 to 20,000......... -74 -0.3% 26 1.6% 26 1.6% 7.2%  20,000 to 30,000......... -73 -0.1% 61 3.8% 61 3.8% 12.6 30,000 to 40,000......... -68 (5) 92 5.8% 92 5.8% 16.3 40,000 to 50,000......... -59 (5) 104 6.5% 104 6.5% 17.7 50,000 to 75,000......... -110 (5) 266 16.7% 266 16.7% 20.2 75,000 to 100,000......... -63 (5) 234 14.7% 233 14.7% 22.7100,000 to 200,000........ -50 (5) 365 22.9% 365 23.0% 25.0200,000 and over........... -44 (5) 438 27.5% 438 27.5% 28.2Total, All Taxpayers..... -$581 (5) $1,592 100.0% $1,592 100.0% 21.4

Source: Joint Committee on Taxation

Detail may not add to total due to rounding.-----------------------------------------------------(1) The repeal of the Federal communications excise tax is phased in for amounts paid with respect to bills first rendered  follows: 2% for 30 days after enactment through 9/30/01; 1% for 10/1/01through 9/30/02; and no tax for 10/1/02 and thereafter.(2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exe interest, [2] employer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] worker’s co [5] nontaxable social security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preferenc [8] excluded income of U.S. citizens living abroad. Categories are measured at 2000 levels.(3) Federal taxes are equal to individual income tax (including the outlay portion of the EIC), employment tax (attributed to  and excise taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the  Individuals who are dependents of other taxpayers and taxpayers with negative income are excluded from the analys Does not include indirect effects.(4) The effective tax rate is equal to Federal taxes described in footnote (3) divided by: income described in footnote (2) p income attributable to the proposal.(5) Less than 0.05%.

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DISTRIBUTIONAL EFFECTS OF THE CHAIRMAN’S AMENDMENT IN THE NATURE OF A SUBSTITUT

(REPEAL OF THE FEDERAL COMMUNICATIONS EXCISE TAX (1)) 

FOR MARKUP BY THE COMMITTEE ON WAYS AND MEANS ON MAY 17, 2000 

 Calendar Year 2001

CHANGE IN FEDERAL TAXES (3) FEDERAL TAXES (3) Effec

INCOME FEDERAL UNDER UNDER Prese

CATEGORY (2) TAXES (3) PRESENT LAW PROPOSAL Law 

Millions Percent Billions Percent Billions Percent Perce

Less than $10,000......... -$122 -1.7% $7 0.4% $7 0.4% 8.6%  10,000 to 20,000......... -233 -0.9% 26 1.5% 25 1.5% 7.2%  20,000 to 30,000......... -229 -0.4% 62 3.7% 62 3.7% 12.5 30,000 to 40,000......... -215 -0.2% 95 5.7% 94 5.7% 16.2 40,000 to 50,000......... -184 -0.2% 105 6.3% 104 6.3% 17.5 50,000 to 75,000......... -346 -0.1% 276 16.6% 276 16.6% 20.1 75,000 to 100,000......... -199 -0.1% 246 14.8% 246 14.8% 22.6100,000 to 200,000........ -158 (5) 393 23.6% 393 23.6% 25.0200,000 and over........... -139 (5) 457 27.4% 456 27.4% 28.4Total, All Taxpayers..... -$1,825 -0.1% $1,665 100.0% $1,663 100.0% 21.5

Source: Joint Committee on Taxation

Detail may not add to total due to rounding.-----------------------------------------------------(1) The repeal of the Federal communications excise tax is phased in for amounts paid with respect to bills first rendered  follows: 2% for 30 days after enactment through 9/30/01; 1% for 10/1/01through 9/30/02; and no tax for 10/1/02 and thereafter.(2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exe interest, [2] employer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] worker’s co [5] nontaxable social security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preferenc [8] excluded income of U.S. citizens living abroad. Categories are measured at 2000 levels.(3) Federal taxes are equal to individual income tax (including the outlay portion of the EIC), employment tax (attributed to  and excise taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the  Individuals who are dependents of other taxpayers and taxpayers with negative income are excluded from the analys Does not include indirect effects.(4) The effective tax rate is equal to Federal taxes described in footnote (3) divided by: income described in footnote (2) p income attributable to the proposal.(5) Less than 0.05%.

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DISTRIBUTIONAL EFFECTS OF THE CHAIRMAN’S AMENDMENT IN THE NATURE OF A SUBSTITUT

(REPEAL OF THE FEDERAL COMMUNICATIONS EXCISE TAX (1)) 

FOR MARKUP BY THE COMMITTEE ON WAYS AND MEANS ON MAY 17, 2000 

 Calendar Year 2002

CHANGE IN FEDERAL TAXES (3) FEDERAL TAXES (3) Effec

INCOME FEDERAL UNDER UNDER Prese

CATEGORY (2) TAXES (3) PRESENT LAW PROPOSAL Law 

Millions Percent Billions Percent Billions Percent Perce

Less than $10,000......... -$231 -3.2% $7 0.4% $7 0.4% 9.0%  10,000 to 20,000......... -443 -1.7% 26 1.5% 26 1.5% 7.3%  20,000 to 30,000......... -434 -0.7% 63 3.6% 63 3.6% 12.4 30,000 to 40,000......... -408 -0.4% 97 5.6% 96 5.6% 16.1 40,000 to 50,000......... -349 -0.3% 109 6.3% 109 6.3% 17.6 50,000 to 75,000......... -656 -0.2% 287 16.5% 286 16.5% 20.0 75,000 to 100,000......... -378 -0.1% 257 14.8% 257 14.8% 22.5100,000 to 200,000........ -300 -0.1% 417 24.0% 417 24.0% 25.1200,000 and over........... -265 -0.1% 474 27.3% 474 27.3% 28.5Total, All Taxpayers..... -$3,464 -0.2% $1,738 100.0% $1,734 100.0% 21.5

Source: Joint Committee on Taxation

Detail may not add to total due to rounding.-----------------------------------------------------(1) The repeal of the Federal communications excise tax is phased in for amounts paid with respect to bills first rendered  follows: 2% for 30 days after enactment through 9/30/01; 1% for 10/1/01through 9/30/02; and no tax for 10/1/02 and thereafter.(2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exe interest, [2] employer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] worker’s co [5] nontaxable social security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preferenc [8] excluded income of U.S. citizens living abroad. Categories are measured at 2000 levels.(3) Federal taxes are equal to individual income tax (including the outlay portion of the EIC), employment tax (attributed to  and excise taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the  Individuals who are dependents of other taxpayers and taxpayers with negative income are excluded from the analys Does not include indirect effects.(4) The effective tax rate is equal to Federal taxes described in footnote (3) divided by: income described in footnote (2) p income attributable to the proposal.(5) Less than 0.05%.

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DISTRIBUTIONAL EFFECTS OF THE CHAIRMAN’S AMENDMENT IN THE NATURE OF A SUBSTITUT

(REPEAL OF THE FEDERAL COMMUNICATIONS EXCISE TAX (1)) 

FOR MARKUP BY THE COMMITTEE ON WAYS AND MEANS ON MAY 17, 2000 

 Calendar Year 2003

CHANGE IN FEDERAL TAXES (3) FEDERAL TAXES (3) Effec

INCOME FEDERAL UNDER UNDER Prese

CATEGORY (2) TAXES (3) PRESENT LAW PROPOSAL Law 

Millions Percent Billions Percent Billions Percent Perce

Less than $10,000......... -$324 -4.3% $7 0.4% $7 0.4% 9.3%  10,000 to 20,000......... -621 -2.3% 27 1.5% 26 1.4% 7.4%  20,000 to 30,000......... -608 -0.9% 65 3.6% 64 3.5% 12.4 30,000 to 40,000......... -572 -0.6% 100 5.5% 100 5.5% 16.0 40,000 to 50,000......... -490 -0.4% 111 6.1% 111 6.1% 17.4 50,000 to 75,000......... -920 -0.3% 299 16.5% 298 16.5% 19.9 75,000 to 100,000......... -531 -0.2% 270 14.9% 270 14.9% 22.4100,000 to 200,000........ -421 -0.1% 441 24.3% 441 24.4% 25.1200,000 and over........... -371 -0.1% 493 27.2% 493 27.3% 28.6Total, All Taxpayers..... -$4,858 -0.3% $1,813 100.0% $1,809 100.0% 21.5

Source: Joint Committee on Taxation

Detail may not add to total due to rounding.-----------------------------------------------------(1) The repeal of the Federal communications excise tax is phased in for amounts paid with respect to bills first rendered  follows: 2% for 30 days after enactment through 9/30/01; 1% for 10/1/01through 9/30/02; and no tax for 10/1/02 and thereafter.(2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exe interest, [2] employer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] worker’s co [5] nontaxable social security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preferenc [8] excluded income of U.S. citizens living abroad. Categories are measured at 2000 levels.(3) Federal taxes are equal to individual income tax (including the outlay portion of the EIC), employment tax (attributed to  and excise taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the  Individuals who are dependents of other taxpayers and taxpayers with negative income are excluded from the analys Does not include indirect effects.(4) The effective tax rate is equal to Federal taxes described in footnote (3) divided by: income described in footnote (2) p income attributable to the proposal.(5) Less than 0.05%.

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DISTRIBUTIONAL EFFECTS OF THE CHAIRMAN’S AMENDMENT IN THE NATURE OF A SUBSTITUT

(REPEAL OF THE FEDERAL COMMUNICATIONS EXCISE TAX (1)) 

FOR MARKUP BY THE COMMITTEE ON WAYS AND MEANS ON MAY 17, 2000 

 Calendar Year 2004

CHANGE IN FEDERAL TAXES (3) FEDERAL TAXES (3) Effec

INCOME FEDERAL UNDER UNDER Prese

CATEGORY (2) TAXES (3) PRESENT LAW PROPOSAL Law 

Millions Percent Billions Percent Billions Percent Perce

Less than $10,000......... -$340 -4.5% $8 0.4% $7 0.4% 9.5%  10,000 to 20,000......... -653 -2.4% 27 1.4% 26 1.4% 7.3%  20,000 to 30,000......... -639 -1.0% 67 3.5% 66 3.5% 12.4 30,000 to 40,000......... -601 -0.6% 102 5.4% 102 5.4% 15.9 40,000 to 50,000......... -515 -0.5% 113 6.0% 113 6.0% 17.3 50,000 to 75,000......... -967 -0.3% 312 16.5% 311 16.5% 19.8 75,000 to 100,000......... -557 -0.2% 280 14.8% 279 14.8% 22.2100,000 to 200,000........ -443 -0.1% 468 24.7% 467 24.8% 25.1200,000 and over........... -390 -0.1% 517 27.3% 517 27.4% 28.8Total, All Taxpayers..... -$5,104 -0.3% $1,893 100.0% $1,888 100.0% 21.6

Source: Joint Committee on Taxation

Detail may not add to total due to rounding.-----------------------------------------------------(1) The repeal of the Federal communications excise tax is phased in for amounts paid with respect to bills first rendered  follows: 2% for 30 days after enactment through 9/30/01; 1% for 10/1/01through 9/30/02; and no tax for 10/1/02 and thereafter.(2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exe interest, [2] employer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] worker’s co [5] nontaxable social security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preferenc [8] excluded income of U.S. citizens living abroad. Categories are measured at 2000 levels.(3) Federal taxes are equal to individual income tax (including the outlay portion of the EIC), employment tax (attributed to  and excise taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the  Individuals who are dependents of other taxpayers and taxpayers with negative income are excluded from the analys Does not include indirect effects.(4) The effective tax rate is equal to Federal taxes described in footnote (3) divided by: income described in footnote (2) p income attributable to the proposal.(5) Less than 0.05%.

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DISTRIBUTIONAL EFFECTS OF THE CHAIRMAN’S AMENDMENT IN THE NATURE OF A SUBSTITUT

(REPEAL OF THE FEDERAL COMMUNICATIONS EXCISE TAX (1)) 

FOR MARKUP BY THE COMMITTEE ON WAYS AND MEANS ON MAY 17, 2000 

 Calendar Year 2005

CHANGE IN FEDERAL TAXES (3) FEDERAL TAXES (3) Effec

INCOME FEDERAL UNDER UNDER Prese

CATEGORY (2) TAXES (3) PRESENT LAW PROPOSAL Law 

Millions Percent Billions Percent Billions Percent Perce

Less than $10,000......... -$358 -4.6% $8 0.4% $7 0.4% 9.8%  10,000 to 20,000......... -687 -2.5% 27 1.4% 26 1.3% 7.4%  20,000 to 30,000......... -672 -1.0% 67 3.4% 66 3.4% 12.2 30,000 to 40,000......... -632 -0.6% 105 5.3% 104 5.3% 15.9 40,000 to 50,000......... -541 -0.5% 119 6.0% 119 6.0% 17.3 50,000 to 75,000......... -1,017 -0.3% 320 16.2% 319 16.2% 19.7 75,000 to 100,000......... -586 -0.2% 294 14.8% 293 14.8% 22.1100,000 to 200,000........ -465 -0.1% 497 25.1% 497 25.2% 25.0200,000 and over........... -410 -0.1% 543 27.4% 542 27.5% 28.9Total, All Taxpayers..... -$5,368 -0.3% $1,980 100.0% $1,975 100.0% 21.6

Source: Joint Committee on Taxation

Detail may not add to total due to rounding.-----------------------------------------------------(1) The repeal of the Federal communications excise tax is phased in for amounts paid with respect to bills first rendered  follows: 2% for 30 days after enactment through 9/30/01; 1% for 10/1/01through 9/30/02; and no tax for 10/1/02 and thereafter.(2) The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exe interest, [2] employer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] worker’s co [5] nontaxable social security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preferenc [8] excluded income of U.S. citizens living abroad. Categories are measured at 2000 levels.(3) Federal taxes are equal to individual income tax (including the outlay portion of the EIC), employment tax (attributed to  and excise taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the  Individuals who are dependents of other taxpayers and taxpayers with negative income are excluded from the analys Does not include indirect effects.(4) The effective tax rate is equal to Federal taxes described in footnote (3) divided by: income described in footnote (2) p income attributable to the proposal.(5) Less than 0.05%.

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