DISTRIBUTIONAL EFFECTS OF

THE TAXPAYER REFUND ACT OF 1999

Prepared by the Staff

of the

JOINT COMMITTEE ON TAXATION

July 20, 1999

JCX-50-99
DISTRIBUTIONAL EFFECTS OF THE

"TAX REFUND ACT 0F1999" SCHEDULED FOR MARKUP BY THE

COMMITTEE ON FINANCE ON JULY 20,1999 (1)

Calendar Year 2000

CHANGE IN FEDERAL TAXES (3) FEDERAL TAXES (3) Effective Tax Rate (4)

FEDERAL UNDER UNDER Present

TAXES (3) PRESENT LAW PROPOSAL Law Proposal

Millions Percent Billions Percent Billions Percent Percent Percent

... -$2 (5) $6 0.4% $6 0.4% 6.5% 6.5%

.... -41 -0.1% 32 2.1% 32 2.1% 8.1% 8.1%

.... -113 -0.1% 81 5.3% 81 5.3% 15.4% 15.4%

.... -162 -0.2% 102 6.7% 102 6.7% 17.8% 17.8%.... -161 -0.1% 120 7.9% 119 7.9% 19.6% 19.6%.... -477 -0.2% 270 17.8% 270 17.8% 21.6% 21.5%.... -596 -0.3% 221 14.5% 220 14.5% 24.2% 24.1%.... -453 -0.1% 304 20.1% 304 20.1% 26.3% 26.3%

.... -381 -0.1% 382 25.2% 382 25.2% 29.0% 28.9%

.... -$2,384 -0.2% $1,518 100.0% $1,515 100.0% 22.2% 22.2%

tee on Taxation

total due to rounding.

------------------------

al (15% rate) rate reduction, dependent care credit expansion, AMT credit limitation repeal, deductible IRA provisions,

st deduction, elderly caretaker exemption, and self-employed health insurance deduction. 

pt used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exempt 

yer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] worker's compensation, 

ial security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preference items, and

me of U.S. citizens living abroad. Categories are measured at 1999 levels.

equal to individual income tax (including the outlay portion of the EIC), employment tax (attributed to employees), 

attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. 

e dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.

ate is equal to Federal taxes described in footnote (3) divided by: income described in footnote (2) plus additional 

e to the proposal.

Page 1 of 5
DISTRIBUTIONAL EFFECTS OF THE

"TAX REFUND ACT 0F1999" SCHEDULED FOR MARKUP BY THE

COMMITTEE ON FINANCE ON JULY 20,1999 (1)

Calendar Year 2001

CHANGE IN FEDERAL TAXES (3) FEDERAL TAXES (3) Effective Tax Rate (4)

FEDERAL UNDER UNDER Present

TAXES (3) PRESENT LAW PROPOSAL Law Proposal

Millions Percent Billions Percent Billions Percent Percent Percent

... -$18 -0.3% $7 0.4% $7 0.4% 6.8% 6.8%

.... -656 -2.0% 33 2.1% 32 2.1% 8.0% 7.8%

.... -1,941 -2.4% 82 5.2% 81 5.2% 15.4% 15.0%

.... -2,873 -2.7% 105 6.7% 102 6.6% 17.8% 17.3%.... -3,065 -2.5% 121 7.7% 118 7.6% 19.4% 18.9%.... -7,183 -2.6% 280 17.8% 273 17.7% 21.5% 20.9%.... -5,365 -2.3% 232 14.8% 227 14.7% 24.1% 23.5%.... -4,401 -1.4% 319 20.3% 315 20.4% 26.3% 25.9%

.... -1,368 -0.3% 392 25.0% 391 25.3% 29.1% 29.0%

.... -$26,870 -1.7% $1,571 100.0% $1,544 100.0% 22.2% 21.8%

tee on Taxation

total due to rounding.

------------------------

al (15% rate) rate reduction, dependent care credit expansion, AMT credit limitation repeal, deductible IRA provisions,

st deduction, elderly caretaker exemption, and self-employed health insurance deduction. 

pt used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exempt 

yer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] worker's compensation, 

ial security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preference items, and

me of U.S. citizens living abroad. Categories are measured at 1999 levels.

equal to individual income tax (including the outlay portion of the EIC), employment tax (attributed to employees), 

attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. 

e dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.

ate is equal to Federal taxes described in footnote (3) divided by: income described in footnote (2) plus additional 

e to the proposal.

Page 2 of 5
DISTRIBUTIONAL EFFECTS OF THE

"TAX REFUND ACT 0F1999" SCHEDULED FOR MARKUP BY THE

COMMITTEE ON FINANCE ON JULY 20,1999 (1)

Calendar Year 2002

CHANGE IN FEDERAL TAXES (3) FEDERAL TAXES (3) Effective Tax Rate (4)

FEDERAL UNDER UNDER Present

TAXES (3) PRESENT LAW PROPOSAL Law Proposal

Millions Percent Billions Percent Billions Percent Percent Percent

... -$17 -0.3% $7 0.4% $7 0.4% 7.0% 7.0%

.... -682 -2.0% 34 2.1% 33 2.1% 8.1% 7.9%

.... -2,207 -2.6% 85 5.2% 83 5.2% 15.4% 15.0%

.... -3,412 -3.1% 109 6.6% 105 6.6% 17.7% 17.2%.... -3,667 -3.0% 123 7.5% 119 7.4% 19.3% 18.8%.... -7,831 -2.7% 290 17.8% 283 17.6% 21.4% 20.8%.... -6,007 -2.5% 241 14.7% 235 14.6% 24.0% 23.4%.... -4,918 -1.4% 339 20.8% 335 20.8% 26.3% 25.9%

.... -1,393 -0.3% 408 24.9% 406 25.3% 29.1% 29.0%

.... -$30,135 -1.8% $1,635 100.0% $1,605 100.0% 22.2% 21.8%

tee on Taxation

total due to rounding.

------------------------

al (15% rate) rate reduction, dependent care credit expansion, AMT credit limitation repeal, deductible IRA provisions,

st deduction, elderly caretaker exemption, and self-employed health insurance deduction. 

pt used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exempt 

yer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] worker's compensation, 

ial security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preference items, and

me of U.S. citizens living abroad. Categories are measured at 1999 levels.

equal to individual income tax (including the outlay portion of the EIC), employment tax (attributed to employees), 

attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. 

e dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.

ate is equal to Federal taxes described in footnote (3) divided by: income described in footnote (2) plus additional 

e to the proposal.

Page 3 of 5
DISTRIBUTIONAL EFFECTS OF THE

"TAX REFUND ACT 0F1999" SCHEDULED FOR MARKUP BY THE

COMMITTEE ON FINANCE ON JULY 20,1999 (1)

Calendar Year 2003

CHANGE IN FEDERAL TAXES (3) FEDERAL TAXES (3) Effective Tax Rate (4)

FEDERAL UNDER UNDER Present

TAXES (3) PRESENT LAW PROPOSAL Law Proposal

Millions Percent Billions Percent Billions Percent Percent Percent

... -$15 -0.2% $7 0.4% $7 0.4% 7.2% 7.2%

.... -692 -2.0% 34 2.0% 34 2.0% 8.1% 7.9%

.... -2,285 -2.6% 88 5.1% 85 5.1% 15.3% 14.9%

.... -3,320 -3.0% 113 6.6% 109 6.5% 17.6% 17.1%.... -4,216 -3.3% 127 7.4% 122 7.3% 19.3% 18.6%.... -8,305 -2.8% 301 17.7% 293 17.5% 21.3% 20.7%.... -6,737 -2.7% 254 14.9% 247 14.8% 23.9% 23.3%.... -5,094 -1.4% 356 20.9% 351 21.0% 26.3% 25.9%

.... -1,131 -0.3% 423 24.8% 422 25.2% 29.2% 29.1%

.... -$31,795 -1.9% $1,703 100.0% $1,671 100.0% 22.2% 21.8%

tee on Taxation

total due to rounding.

------------------------

al (15% rate) rate reduction, dependent care credit expansion, AMT credit limitation repeal, deductible IRA provisions,

st deduction, elderly caretaker exemption, and self-employed health insurance deduction. 

pt used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exempt 

yer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] worker's compensation, 

ial security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preference items, and

me of U.S. citizens living abroad. Categories are measured at 1999 levels.

equal to individual income tax (including the outlay portion of the EIC), employment tax (attributed to employees), 

attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. 

e dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.

ate is equal to Federal taxes described in footnote (3) divided by: income described in footnote (2) plus additional 

e to the proposal.

Page 4 of 5
DISTRIBUTIONAL EFFECTS OF THE

"TAX REFUND ACT 0F1999" SCHEDULED FOR MARKUP BY THE

COMMITTEE ON FINANCE ON JULY 20,1999 (1)

Calendar Year 2004

CHANGE IN FEDERAL TAXES (3) FEDERAL TAXES (3) Effective Tax Rate (4)

FEDERAL UNDER UNDER Present

TAXES (3) PRESENT LAW PROPOSAL Law Proposal

Millions Percent Billions Percent Billions Percent Percent Percent

... -$13 -0.2% $7 0.4% $7 0.4% 7.1% 7.1%

.... -698 -2.0% 35 2.0% 34 2.0% 8.1% 7.9%

.... -2,401 -2.7% 90 5.0% 88 5.0% 15.2% 14.8%

.... -3,373 -2.9% 116 6.5% 113 6.4% 17.6% 17.1%.... -4,048 -3.1% 130 7.3% 126 7.2% 19.3% 18.7%.... -9,152 -2.9% 314 17.6% 305 17.4% 21.2% 20.6%.... -7,834 -2.9% 269 15.1% 261 14.9% 23.9% 23.2%.... -5,324 -1.4% 377 21.1% 372 21.2% 26.2% 25.8%

.... -1,180 -0.3% 445 25.0% 444 25.4% 29.2% 29.1%

.... -$34,023 -1.9% $1,784 100.0% $1,750 100.0% 22.2% 21.8%

tee on Taxation

total due to rounding.

------------------------

al (15% rate) rate reduction, dependent care credit expansion, AMT credit limitation repeal, deductible IRA provisions,

st deduction, elderly caretaker exemption, and self-employed health insurance deduction. 

pt used to place tax returns into income categories is adjusted gross income (AGI) plus: [1] tax-exempt 

yer contributions for health plans and life insurance, [3] employer share of FICA tax, [4] worker's compensation, 

ial security benefits, [6] insurance value of Medicare benefits, [7] alternative minimum tax preference items, and

me of U.S. citizens living abroad. Categories are measured at 1999 levels.

equal to individual income tax (including the outlay portion of the EIC), employment tax (attributed to employees), 

attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. 

e dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.

ate is equal to Federal taxes described in footnote (3) divided by: income described in footnote (2) plus additional 

e to the proposal.

Page 5 of 5