Despite their shortcomings, income distribution tables are increasingly becoming central to formulating new tax legislation. Their flaws would not matter so much if the tables were not the weapon of choice in policy debates. The centerpiece of tax distribution tables is the measure of income, and it is measured in different ways. Some measures do not include government transfers, such as food stamps, Aid to Families with Dependent Children, Medicaid, and subsidized housing. Others include cash transfers and food stamps, as well as other measures of wealth, such as the income that a homeowner could receive by renting out his house and the value of appreciated yet unrealized capital assets.
Different agencies measure changes in capital gains taxes in different ways.
This assumption is particularly significant in the case of capital gains tax reductions. JCT calculates that individuals would take advantage of the low rates to increase investment and to turn over their assets and therefore that taxes paid would rise, whereas Treasury does not include these revenues. Those supporting the Treasury methodology hold that, if taxpayers choose to realize capital gains and pay taxes, these taxes should not be counted as a burden. Under the JCT measurement method, such a tax would impose no cost. Under the Treasury method, the cost of the tax would be the revenues that would have been collected had individuals continued to work.