1-Jan-13

VERY PRELIMINARY: SUBJECT TO REVISION http://www.taxpolicycenter.org Click on PDF or Excel link above for additional tables containing more detail and breakdowns by filing status and demographic groups.

Table T12-0425 The American Taxpayer Relief Act of 2012 (ATRA) as Passed by the Senate Major Individual Income Tax and Estate Tax Provisions Excludes Certain Business Extenders and other Provisions Baseline: Current Law Distribution of Federal Tax Change by Cash Income Percentile, 2013 1 Summary Table
Tax Units with Tax Increase or Cut 4 Cash Income Percentile
2,3

With Tax Cut Pct of Tax Avg Tax Cut Units 37.0 77.3 93.2 98.8 99.5 76.6 -731 -1,025 -1,294 -2,236 -7,170 -2,482

With Tax Increase Pct of Tax Avg Tax Units Increase * * 0.0 0.0 0.2 * ** ** 0 0 11,524 **

Percent Change in After-Tax Income5 2.5 3.0 2.8 3.3 4.1 3.5

Share of Total Federal Tax Change 3.7 9.9 12.7 19.3 54.3 100.0

Average Federal Tax Change ($)

Average Federal Tax Rate6 Change (% Points) -2.4 -2.7 -2.3 -2.6 -2.8 -2.7 Under the Proposal 1.9 9.5 15.6 19.0 28.1 21.7

Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Top Quintile All Addendum 80-90 90-95 95-99 Top 1 Percent Top 0.1 Percent

-265 -795 -1,184 -2,170 -6,845 -1,847

99.7 99.6 99.0 98.0 90.3

-4,370 -5,624 -11,117 -28,024 -86,465

0.0 0.1 0.6 1.5 9.4

0 1,968 3,583 25,063 37,869

4.5 4.5 5.1 2.5 1.5

17.1 10.8 16.4 10.1 2.9

-4,275 -5,494 -10,359 -25,672 -71,885

-3.4 -3.3 -3.6 -1.5 -0.9

21.5 23.4 26.3 36.9 39.6

Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0412-8). Number of AMT Taxpayers (millions). Baseline: 21.7 Proposal: 3.4 * Less than 0.05 ** Insufficient data (1) Calendar year. Baseline is current law. Proposal would extend the tax cuts in TPC's current policy baseline with the following exceptions and modifications: (1) raise statutory individual income tax rate to 39.6 percent on taxable income greater than $450,000 for married couples filing a joint return (MFJ), $400,000 for singles, and $425,000 for heads of household (HoH), indexed for inflation after 2013; (2) reinstate the personal exemption phaseout (PEP) and the limitation on itemized deductions (Pease) for those with adjusted gross incomes greater than $300,000 for MFJ, $250,000 for singles, and $275,000 for HoH, indexed for inflation after 2013; (3) raise rate on long-term capital gains and qualified dividends to 20 percent for those otherwise in the top 39.6 percent tax bracket; (4) raise estate tax rate from 35 to 40 percent; (4) set AMT exemption at $78,750 for MFJ, $50,600 for singles, indexed for inflation after 2012; and (5) index the AMT exemption phaseout threshold and tax bracket threshold for inflation after 2012. Includes impact of extending the sales tax deduction, the above-the-line deductions for education expenses, and the educator deduction but excludes the impact of certain business and other extenders. For a description of TPC's current law and current policy baselines, see http://www.taxpolicycenter.org/T11-0270 (2) Includes both filing and non-filing units but excludes those that are dependents of other tax units. Tax units with negative cash income are excluded from the lowest income class but are included in the totals. For a description of cash income, see http://www.taxpolicycenter.org/TaxModel/income.cfm (3) The income percentile classes used in this table are based on the income distribution for the entire population and contain an equal number of people, not tax units. The breaks are (in 2012 dollars): 20% $20,113; 40% $39,790; 60% $64,484; 80% $108,266; 90% $143,373; 95% $204,296; 99% $506,210; 99.9% $2,655,675. (4) Includes tax units with a change in federal tax burden of $10 or more in absolute value. (5) After-tax income is cash income less: individual income tax net of refundable credits; corporate income tax; payroll taxes (Social Security and Medicare); and estate tax. (6) Average federal tax (includes individual and corporate income tax, payroll taxes for Social Security and Medicare, and the estate tax) as a percentage of average cash income.

1-Jan-13

VERY PRELIMINARY: SUBJECT TO REVISION

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Table T12-0425 The American Taxpayer Relief Act of 2012 (ATRA) as Passed by the Senate Major Individual Income Tax and Estate Tax Provisions Excludes Certain Business Extenders and other Provisions Baseline: Current Law 1 Distribution of Federal Tax Change by Cash Income Percentile, 2013 Detail Table
Percent of Tax Units4 Cash Income Percentile2,3 With Tax Cut Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Top Quintile All Addendum 80-90 90-95 95-99 Top 1 Percent Top 0.1 Percent 99.7 99.6 99.0 98.0 90.3 0.0 0.1 0.6 1.5 9.4 4.5 4.5 5.1 2.5 1.5 17.1 10.8 16.4 10.1 2.9 -4,275 -5,494 -10,359 -25,672 -71,885 -13.6 -12.3 -12.1 -4.0 -2.2 -0.4 -0.2 -0.2 2.1 1.4 13.3 9.4 14.6 29.7 15.5 -3.4 -3.3 -3.6 -1.5 -0.9 21.5 23.4 26.3 36.9 39.6 37.0 77.3 93.2 98.8 99.5 76.6 With Tax Increase * * 0.0 0.0 0.2 * Percent Change in After-Tax Income5 2.5 3.0 2.8 3.3 4.1 3.5 Share of Total Federal Tax Change 3.7 9.9 12.7 19.3 54.3 100.0 Average Federal Tax Change Dollars -265 -795 -1,184 -2,170 -6,845 -1,847 Percent -54.8 -21.8 -12.7 -11.9 -9.1 -10.9 Share of Federal Taxes Change (% Points) -0.4 -0.6 -0.2 -0.2 1.4 0.0 Under the Proposal 0.4 4.3 10.7 17.5 66.9 100.0 Average Federal Tax Rate6 Change (% Points) -2.4 -2.7 -2.3 -2.6 -2.8 -2.7 Under the Proposal 1.9 9.5 15.6 19.0 28.1 21.7

Baseline Distribution of Income and Federal Taxes 1 by Cash Income Percentile, 2013
Tax Units Cash Income Percentile2,3 Number (thousands) 40,520 36,208 31,370 26,062 23,189 158,260 Percent of Total 25.6 22.9 19.8 16.5 14.7 100.0 Pre-Tax Income Average (dollars) 11,290 30,031 52,294 84,355 244,576 69,527 Percent of Total 4.2 9.9 14.9 20.0 51.5 100.0 Federal Tax Burden Average (dollars) 484 3,645 9,320 18,207 75,675 16,920 Percent of Total 0.7 4.9 10.9 17.7 65.5 100.0 After-Tax Income 5 Average (dollars) 10,806 26,386 42,973 66,148 168,901 52,607 Percent of Total 5.3 11.5 16.2 20.7 47.0 100.0 Average Federal Tax Rate 6 4.3 12.1 17.8 21.6 30.9 24.3

Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Top Quintile All Addendum 80-90 90-95 95-99 Top 1 Percent Top 0.1 Percent

11,692 5,736 4,615 1,147 117

7.4 3.6 2.9 0.7 0.1

125,820 166,808 287,453 1,671,536 7,985,826

13.4 8.7 12.1 17.4 8.5

31,355 44,520 85,873 642,233 3,236,162

13.7 9.5 14.8 27.5 14.1

94,465 122,289 201,581 1,029,304 4,749,663

13.3 8.4 11.2 14.2 6.7

24.9 26.7 29.9 38.4 40.5

Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0412-8). Number of AMT Taxpayers (millions). Baseline: 21.7 Proposal: 3.4 * Less than 0.05 (1) Calendar year. Baseline is current law. Proposal would extend the tax cuts in TPC's current policy baseline with the following exceptions and modifications: (1) raise statutory individual income tax rate to 39.6 percent on taxable income greater than $450,000 for married couples filing a joint return (MFJ), $400,000 for singles, and $425,000 for heads of household (HoH), indexed for inflation after 2013; (2) reinstate the personal exemption phaseout (PEP) and the limitation on itemized deductions (Pease) for those with adjusted gross incomes greater than $300,000 for MFJ, $250,000 for singles, and $275,000 for HoH, indexed for inflation after 2013; (3) raise rate on long-term capital gains and qualified dividends to 20 percent for those otherwise in the top 39.6 percent tax bracket; (4) raise estate tax rate from 35 to 40 percent; (4) set AMT exemption at $78,750 for MFJ, $50,600 for singles, indexed for inflation after 2012; and (5) index the AMT exemption phaseout threshold and tax bracket threshold for inflation after 2012. Includes impact of extending the sales tax deduction, the above-the-line deductions for education expenses, and the educator deduction but excludes the impact of certain business and other extenders. For a description of TPC's current law and current policy baselines, see http://www.taxpolicycenter.org/T11-0270 (2) Includes both filing and non-filing units but excludes those that are dependents of other tax units. Tax units with negative cash income are excluded from the lowest income class but are included in the totals. For a description of cash income, see http://www.taxpolicycenter.org/TaxModel/income.cfm (3) The income percentile classes used in this table are based on the income distribution for the entire population and contain an equal number of people, not tax units. The breaks are (in 2012 dollars): 20% $20,113; 40% $39,790; 60% $64,484; 80% $108,266; 90% $143,373; 95% $204,296; 99% $506,210; 99.9% $2,655,675. (4) Includes tax units with a change in federal tax burden of $10 or more in absolute value. (5) After-tax income is cash income less: individual income tax net of refundable credits; corporate income tax; payroll taxes (Social Security and Medicare); and estate tax. (6) Average federal tax (includes individual and corporate income tax, payroll taxes for Social Security and Medicare, and the estate tax) as a percentage of average cash income.

1-Jan-13

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Table T12-0425 The American Taxpayer Relief Act of 2012 (ATRA) as Passed by the Senate Major Individual Income Tax and Estate Tax Provisions Excludes Certain Business Extenders and other Provisions Baseline: Current Law Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2013 1 Detail Table
Percent of Tax Units4 Cash Income Percentile2,3 With Tax Cut Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Top Quintile All Addendum 80-90 90-95 95-99 Top 1 Percent Top 0.1 Percent 99.2 99.5 99.0 97.8 91.3 0.0 * 0.4 1.6 8.3 3.7 3.8 4.8 2.8 1.6 15.4 10.9 17.0 11.9 3.3 -2,996 -4,044 -8,300 -25,231 -68,276 -11.6 -10.8 -11.6 -4.5 -2.4 -0.1 0.0 -0.1 2.1 1.4 14.4 11.1 15.9 30.6 16.2 -2.8 -2.8 -3.4 -1.7 -1.0 21.4 23.4 26.0 36.7 39.6 39.3 66.0 86.6 98.3 99.2 76.6 With Tax Increase 0.0 * * 0.0 0.2 * Percent Change in After-Tax 5 Income 4.2 3.4 2.8 3.2 3.7 3.5 Share of Total Federal Tax Change 5.0 9.2 11.5 19.1 55.1 100.0 Average Federal Tax Change Dollars -436 -825 -1,077 -1,863 -5,328 -1,847 Percent -251.1 -29.1 -14.2 -12.1 -8.6 -10.9 Share of Federal Taxes Change (% Points) -0.6 -0.7 -0.3 -0.2 1.8 0.0 Under the Proposal -0.4 2.7 8.5 17.0 71.9 100.0 Average Federal Tax Rate6 Change (% Points) -4.1 -3.1 -2.3 -2.6 -2.6 -2.7 Under the Proposal -2.5 7.5 14.0 18.5 27.8 21.7

Baseline Distribution of Income and Federal Taxes by Cash Income Percentile Adjusted for Family Size, 2013 1
Tax Units Cash Income Percentile2,3 Number (thousands) 33,405 32,563 31,164 29,985 30,233 158,260 Percent of Total 21.1 20.6 19.7 19.0 19.1 100.0 Pre-Tax Income Average (dollars) 10,552 26,837 46,562 73,219 204,490 69,527 Percent of Total 3.2 7.9 13.2 20.0 56.2 100.0 Federal Tax Burden Average (dollars) 174 2,832 7,588 15,404 62,083 16,920 Percent of Total 0.2 3.4 8.8 17.3 70.1 100.0 After-Tax Income 5 Average (dollars) 10,378 24,005 38,974 57,815 142,407 52,607 Percent of Total 4.2 9.4 14.6 20.8 51.7 100.0 Average Federal Tax Rate 6 1.7 10.6 16.3 21.0 30.4 24.3

Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Top Quintile All Addendum 80-90 90-95 95-99 Top 1 Percent Top 0.1 Percent

14,991 7,896 5,972 1,374 139

9.5 5.0 3.8 0.9 0.1

106,847 142,978 244,529 1,448,832 6,989,966

14.6 10.3 13.3 18.1 8.9

25,902 37,439 71,768 556,188 2,835,396

14.5 11.0 16.0 28.6 14.7

80,945 105,540 172,762 892,644 4,154,569

14.6 10.0 12.4 14.7 7.0

24.2 26.2 29.4 38.4 40.6

Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0412-8). Number of AMT Taxpayers (millions). Baseline: 21.7 Proposal: 3.4 * Less than 0.05 (1) Calendar year. Baseline is current law. Proposal would extend the tax cuts in TPC's current policy baseline with the following exceptions and modifications: (1) raise statutory individual income tax rate to 39.6 percent on taxable income greater than $450,000 for married couples filing a joint return (MFJ), $400,000 for singles, and $425,000 for heads of household (HoH), indexed for inflation after 2013; (2) reinstate the personal exemption phaseout (PEP) and the limitation on itemized deductions (Pease) for those with adjusted gross incomes greater than $300,000 for MFJ, $250,000 for singles, and $275,000 for HoH, indexed for inflation after 2013; (3) raise rate on long-term capital gains and qualified dividends to 20 percent for those otherwise in the top 39.6 percent tax bracket; (4) raise estate tax rate from 35 to 40 percent; (4) set AMT exemption at $78,750 for MFJ, $50,600 for singles, indexed for inflation after 2012; and (5) index the AMT exemption phaseout threshold and tax bracket threshold for inflation after 2012. Includes impact of extending the sales tax deduction, the above-the-line deductions for education expenses, and the educator deduction but excludes the impact of certain business and other extenders. For a description of TPC's current law and current policy baselines, see http://www.taxpolicycenter.org/T11-0270 (2) Includes both filing and non-filing units but excludes those that are dependents of other tax units. Tax units with negative cash income are excluded from the lowest income class but are included in the totals. For a description of cash income, see http://www.taxpolicycenter.org/TaxModel/income.cfm (3) The income percentile classes used in this table are based on the income distribution for the entire population and contain an equal number of people, not tax units. The incomes used are adjusted for family size by dividing by the square root of the number of people in the tax unit. The resulting percentile breaks are (in 2012 dollars): 20% $13,941; 40% $26,136; 60% $41,226; 80% $64,003; 90% $88,398; 95% $122,605; 99% $295,996; 99.9% $1,565,087. (4) Includes tax units with a change in federal tax burden of $10 or more in absolute value. (5) After-tax income is cash income less: individual income tax net of refundable credits; corporate income tax; payroll taxes (Social Security and Medicare); and estate tax. (6) Average federal tax (includes individual and corporate income tax, payroll taxes for Social Security and Medicare, and the estate tax) as a percentage of average cash income.

1-Jan-13

VERY PRELIMINARY: SUBJECT TO REVISION

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Table T12-0425 The American Taxpayer Relief Act of 2012 (ATRA) as Passed by the Senate Major Individual Income Tax and Estate Tax Provisions Excludes Certain Business Extenders and other Provisions Baseline: Current Law 1 Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2013 Detail Table - Single Tax Units
Percent of Tax Units4 Cash Income Percentile2,3 With Tax Cut Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Top Quintile All Addendum 80-90 90-95 95-99 Top 1 Percent Top 0.1 Percent 98.5 99.2 98.9 98.0 93.0 0.0 0.0 0.0 0.7 6.6 3.1 3.6 6.1 5.9 2.8 13.4 10.6 21.2 17.8 3.9 -1,752 -2,712 -7,103 -32,460 -79,162 -9.1 -9.5 -13.8 -8.5 -3.7 0.1 0.0 -0.7 0.3 0.7 14.2 10.6 14.1 20.4 11.0 -2.3 -2.6 -4.2 -3.5 -1.6 23.1 24.6 26.4 37.7 41.9 23.1 51.8 84.4 98.0 98.7 63.4 With Tax Increase 0.0 * * 0.0 * * Percent Change in After-Tax Income5 1.7 1.5 1.7 1.9 4.6 2.9 Share of Total Federal Tax Change 4.0 7.3 10.7 15.0 63.0 100.0 Average Federal Tax Change Dollars -126 -262 -487 -793 -4,173 -861 Percent -22.5 -11.9 -8.6 -7.0 -10.1 -9.6 Share of Federal Taxes Change (% Points) -0.2 -0.2 0.1 0.6 -0.4 0.0 Under the Proposal 1.5 5.7 12.0 21.3 59.3 100.0 Average Federal Tax Rate6 Change (% Points) -1.6 -1.3 -1.4 -1.5 -3.2 -2.2 Under the Proposal 5.4 9.6 15.0 20.2 28.0 20.7

Baseline Distribution of Income and Federal Taxes 1 by Cash Income Percentile Adjusted for Family Size, 2013
Tax Units Cash Income Percentile2,3 Number (thousands) 19,721 17,211 13,567 11,717 9,354 72,035 Percent of Total 27.4 23.9 18.8 16.3 13.0 100.0 Pre-Tax Income Average (dollars) 8,091 20,316 34,462 52,696 132,560 39,146 Percent of Total 5.7 12.4 16.6 21.9 44.0 100.0 Federal Tax Burden Average (dollars) 560 2,210 5,664 11,410 41,224 8,972 Percent of Total 1.7 5.9 11.9 20.7 59.7 100.0 After-Tax Income 5 Average (dollars) 7,532 18,107 28,798 41,286 91,336 30,174 Percent of Total 6.8 14.3 18.0 22.3 39.3 100.0 Average Federal Tax Rate 6 6.9 10.9 16.4 21.7 31.1 22.9

Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Top Quintile All Addendum 80-90 90-95 95-99 Top 1 Percent Top 0.1 Percent

4,749 2,416 1,849 340 31

6.6 3.4 2.6 0.5 0.0

75,578 104,552 168,798 931,104 4,955,926

12.7 9.0 11.1 11.2 5.4

19,172 28,447 51,672 383,507 2,157,246

14.1 10.6 14.8 20.2 10.3

56,405 76,105 117,126 547,597 2,798,680

12.3 8.5 10.0 8.6 4.0

25.4 27.2 30.6 41.2 43.5

Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0412-8). * Less than 0.05 (1) Calendar year. Baseline is current law. Proposal would extend the tax cuts in TPC's current policy baseline with the following exceptions and modifications: (1) raise statutory individual income tax rate to 39.6 percent on taxable income greater than $450,000 for married couples filing a joint return (MFJ), $400,000 for singles, and $425,000 for heads of household (HoH), indexed for inflation after 2013; (2) reinstate the personal exemption phaseout (PEP) and the limitation on itemized deductions (Pease) for those with adjusted gross incomes greater than $300,000 for MFJ, $250,000 for singles, and $275,000 for HoH, indexed for inflation after 2013; (3) raise rate on long-term capital gains and qualified dividends to 20 percent for those otherwise in the top 39.6 percent tax bracket; (4) raise estate tax rate from 35 to 40 percent; (4) set AMT exemption at $78,750 for MFJ, $50,600 for singles, indexed for inflation after 2012; and (5) index the AMT exemption phaseout threshold and tax bracket threshold for inflation after 2012. Includes impact of extending the sales tax deduction, the above-the-line deductions for education expenses, and the educator deduction but excludes the impact of certain business and other extenders. For a description of TPC's current law and current policy baselines, see http://www.taxpolicycenter.org/T11-0270 (2) Includes both filing and non-filing units but excludes those that are dependents of other tax units. Tax units with negative cash income are excluded from the lowest income class but are included in the totals. For a description of cash income, see http://www.taxpolicycenter.org/TaxModel/income.cfm (3) The income percentile classes used in this table are based on the income distribution for the entire population and contain an equal number of people, not tax units. The incomes used are adjusted for family size by dividing by the square root of the number of people in the tax unit. The resulting percentile breaks are (in 2012 dollars): 20% $13,941; 40% $26,136; 60% $41,226; 80% $64,003; 90% $88,398; 95% $122,605; 99% $295,996; 99.9% $1,565,087. (4) Includes tax units with a change in federal tax burden of $10 or more in absolute value. (5) After-tax income is cash income less: individual income tax net of refundable credits; corporate income tax; payroll taxes (Social Security and Medicare); and estate tax. (6) Average federal tax (includes individual and corporate income tax, payroll taxes for Social Security and Medicare, and the estate tax) as a percentage of average cash income.

1-Jan-13

VERY PRELIMINARY: SUBJECT TO REVISION

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Table T12-0425 The American Taxpayer Relief Act of 2012 (ATRA) as Passed by the Senate Major Individual Income Tax and Estate Tax Provisions Excludes Certain Business Extenders and other Provisions Baseline: Current Law 1 Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2013 Detail Table - Married Tax Units Filing Jointly
Percent of Tax Units4 Cash Income Percentile2,3 With Tax Cut Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Top Quintile All Addendum 80-90 90-95 95-99 Top 1 Percent Top 0.1 Percent 99.6 99.8 99.7 98.4 91.3 0.0 0.0 0.0 1.3 8.4 3.9 3.9 4.6 2.3 1.5 17.6 12.5 18.3 11.8 3.5 -3,671 -4,733 -9,138 -23,258 -66,878 -12.5 -11.3 -11.2 -3.8 -2.2 -0.3 -0.1 -0.1 2.5 1.6 14.6 11.6 17.2 35.1 18.2 -3.0 -2.9 -3.2 -1.4 -0.9 20.8 22.9 25.7 36.5 39.3 42.9 70.9 84.6 98.3 99.6 87.0 With Tax Increase 0.0 0.0 0.0 0.0 0.1 * Percent Change in After-Tax Income5 5.8 4.8 3.1 3.7 3.6 3.7 Share of Total Federal Tax Change 2.3 6.6 9.9 20.9 60.3 100.0 Average Federal Tax Change Dollars -816 -1,570 -1,532 -2,633 -6,049 -3,174 Percent -272.0 -39.2 -17.0 -14.3 -8.3 -10.5 Share of Federal Taxes Change (% Points) -0.3 -0.6 -0.4 -0.7 1.9 0.0 Under the Proposal -0.2 1.2 5.7 14.7 78.4 100.0 Average Federal Tax Rate6 Change (% Points) -5.6 -4.3 -2.6 -2.9 -2.5 -2.7 Under the Proposal -3.6 6.7 12.7 17.5 27.7 23.1

Baseline Distribution of Income and Federal Taxes 1 by Cash Income Percentile Adjusted for Family Size, 2013
Tax Units Cash Income Percentile2,3 Number (thousands) 5,376 8,093 12,453 15,271 19,208 60,744 Percent of Total 8.9 13.3 20.5 25.1 31.6 100.0 Pre-Tax Income Average (dollars) 14,486 36,595 58,915 89,679 241,961 116,746 Percent of Total 1.1 4.2 10.4 19.3 65.5 100.0 Federal Tax Burden Average (dollars) 300 4,009 9,030 18,365 72,944 30,143 Percent of Total 0.1 1.8 6.1 15.3 76.5 100.0 After-Tax Income 5 Average (dollars) 14,186 32,587 49,885 71,314 169,017 86,603 Percent of Total 1.5 5.0 11.8 20.7 61.7 100.0 Average Federal Tax Rate 6 2.1 11.0 15.3 20.5 30.2 25.8

Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Top Quintile All Addendum 80-90 90-95 95-99 Top 1 Percent Top 0.1 Percent

9,257 5,109 3,865 977 101

15.2 8.4 6.4 1.6 0.2

123,947 162,264 282,834 1,615,663 7,547,627

16.2 11.7 15.4 22.3 10.7

29,463 41,822 81,879 612,503 3,029,608

14.9 11.7 17.3 32.7 16.7

94,484 120,442 200,955 1,003,160 4,518,019

16.6 11.7 14.8 18.6 8.6

23.8 25.8 29.0 37.9 40.1

Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0412-8). * Less than 0.05 (1) Calendar year. Baseline is current law. Proposal would extend the tax cuts in TPC's current policy baseline with the following exceptions and modifications: (1) raise statutory individual income tax rate to 39.6 percent on taxable income greater than $450,000 for married couples filing a joint return (MFJ), $400,000 for singles, and $425,000 for heads of household (HoH), indexed for inflation after 2013; (2) reinstate the personal exemption phaseout (PEP) and the limitation on itemized deductions (Pease) for those with adjusted gross incomes greater than $300,000 for MFJ, $250,000 for singles, and $275,000 for HoH, indexed for inflation after 2013; (3) raise rate on long-term capital gains and qualified dividends to 20 percent for those otherwise in the top 39.6 percent tax bracket; (4) raise estate tax rate from 35 to 40 percent; (4) set AMT exemption at $78,750 for MFJ, $50,600 for singles, indexed for inflation after 2012; and (5) index the AMT exemption phaseout threshold and tax bracket threshold for inflation after 2012. Includes impact of extending the sales tax deduction, the above-the-line deductions for education expenses, and the educator deduction but excludes the impact of certain business and other extenders. For a description of TPC's current law and current policy baselines, see http://www.taxpolicycenter.org/T11-0270 (2) Includes both filing and non-filing units but excludes those that are dependents of other tax units. Tax units with negative cash income are excluded from the lowest income class but are included in the totals. For a description of cash income, see http://www.taxpolicycenter.org/TaxModel/income.cfm (3) The income percentile classes used in this table are based on the income distribution for the entire population and contain an equal number of people, not tax units. The incomes used are adjusted for family size by dividing by the square root of the number of people in the tax unit. The resulting percentile breaks are (in 2012 dollars): 20% $13,941; 40% $26,136; 60% $41,226; 80% $64,003; 90% $88,398; 95% $122,605; 99% $295,996; 99.9% $1,565,087. (4) Includes tax units with a change in federal tax burden of $10 or more in absolute value. (5) After-tax income is cash income less: individual income tax net of refundable credits; corporate income tax; payroll taxes (Social Security and Medicare); and estate tax. (6) Average federal tax (includes individual and corporate income tax, payroll taxes for Social Security and Medicare, and the estate tax) as a percentage of average cash income.

1-Jan-13

VERY PRELIMINARY: SUBJECT TO REVISION

http://www.taxpolicycenter.org

Table T12-0425 The American Taxpayer Relief Act of 2012 (ATRA) as Passed by the Senate Major Individual Income Tax and Estate Tax Provisions Excludes Certain Business Extenders and other Provisions Baseline: Current Law 1 Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2013 Detail Table - Head of Household Tax Units
Percent of Tax Units4 Cash Income Percentile2,3 With Tax Cut Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Top Quintile All Addendum 80-90 90-95 95-99 Top 1 Percent Top 0.1 Percent 98.9 99.6 99.9 97.8 89.8 0.0 0.0 0.0 1.4 9.9 2.7 2.9 3.3 2.0 0.9 4.8 2.5 3.0 1.7 0.4 -2,076 -2,893 -5,396 -17,059 -39,118 -8.3 -8.2 -8.3 -3.5 -1.5 2.1 1.1 1.3 2.4 1.4 14.7 7.6 9.0 13.0 6.7 -2.0 -2.2 -2.4 -1.3 -0.6 22.5 24.2 26.1 35.0 37.7 76.2 94.2 97.3 99.8 99.1 89.3 With Tax Increase 0.0 * 0.0 0.0 * * Percent Change in After-Tax Income5 6.4 4.6 3.6 3.3 2.7 4.1 Share of Total Federal Tax Change 24.1 28.7 20.5 14.5 12.1 100.0 Average Federal Tax Change Dollars -952 -1,332 -1,462 -1,854 -3,132 -1,374 Percent 105.9 -46.5 -16.0 -11.7 -6.9 -21.5 Share of Federal Taxes Change (% Points) -7.9 -4.2 1.9 3.3 6.9 0.0 Under the Proposal -12.8 9.0 29.4 29.9 44.3 100.0 Average Federal Tax Rate6 Change (% Points) -6.8 -4.2 -2.9 -2.6 -2.0 -3.4 Under the Proposal -13.2 4.8 15.3 19.4 26.3 12.6

Baseline Distribution of Income and Federal Taxes 1 by Cash Income Percentile Adjusted for Family Size, 2013
Tax Units Cash Income Percentile2,3 Number (thousands) 8,034 6,829 4,455 2,489 1,222 23,101 Percent of Total 34.8 29.6 19.3 10.8 5.3 100.0 Pre-Tax Income Average (dollars) 13,983 31,795 49,950 71,792 160,037 40,006 Percent of Total 12.2 23.5 24.1 19.3 21.2 100.0 Federal Tax Burden Average (dollars) -898 2,865 9,117 15,804 45,200 6,394 Percent of Total -4.9 13.2 27.5 26.6 37.4 100.0 After-Tax Income 5 Average (dollars) 14,881 28,931 40,833 55,988 114,837 33,612 Percent of Total 15.4 25.4 23.4 18.0 18.1 100.0 Average Federal Tax Rate 6 -6.4 9.0 18.3 22.0 28.2 16.0

Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Top Quintile All Addendum 80-90 90-95 95-99 Top 1 Percent Top 0.1 Percent

740 273 176 32 3

3.2 1.2 0.8 0.1 0.0

102,711 133,416 226,780 1,339,304 6,750,433

8.2 4.0 4.3 4.7 2.2

25,142 35,136 64,671 485,362 2,585,799

12.6 6.5 7.7 10.6 5.3

77,568 98,281 162,109 853,941 4,164,633

7.4 3.5 3.7 3.5 1.6

24.5 26.3 28.5 36.2 38.3

Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0412-8). * Less than 0.05 (1) Calendar year. Baseline is current law. Proposal would extend the tax cuts in TPC's current policy baseline with the following exceptions and modifications: (1) raise statutory individual income tax rate to 39.6 percent on taxable income greater than $450,000 for married couples filing a joint return (MFJ), $400,000 for singles, and $425,000 for heads of household (HoH), indexed for inflation after 2013; (2) reinstate the personal exemption phaseout (PEP) and the limitation on itemized deductions (Pease) for those with adjusted gross incomes greater than $300,000 for MFJ, $250,000 for singles, and $275,000 for HoH, indexed for inflation after 2013; (3) raise rate on long-term capital gains and qualified dividends to 20 percent for those otherwise in the top 39.6 percent tax bracket; (4) raise estate tax rate from 35 to 40 percent; (4) set AMT exemption at $78,750 for MFJ, $50,600 for singles, indexed for inflation after 2012; and (5) index the AMT exemption phaseout threshold and tax bracket threshold for inflation after 2012. Includes impact of extending the sales tax deduction, the above-the-line deductions for education expenses, and the educator deduction but excludes the impact of certain business and other extenders. For a description of TPC's current law and current policy baselines, see http://www.taxpolicycenter.org/T11-0270 (2) Includes both filing and non-filing units but excludes those that are dependents of other tax units. Tax units with negative cash income are excluded from the lowest income class but are included in the totals. For a description of cash income, see http://www.taxpolicycenter.org/TaxModel/income.cfm (3) The income percentile classes used in this table are based on the income distribution for the entire population and contain an equal number of people, not tax units. The incomes used are adjusted for family size by dividing by the square root of the number of people in the tax unit. The resulting percentile breaks are (in 2012 dollars): 20% $13,941; 40% $26,136; 60% $41,226; 80% $64,003; 90% $88,398; 95% $122,605; 99% $295,996; 99.9% $1,565,087. (4) Includes tax units with a change in federal tax burden of $10 or more in absolute value. (5) After-tax income is cash income less: individual income tax net of refundable credits; corporate income tax; payroll taxes (Social Security and Medicare); and estate tax. (6) Average federal tax (includes individual and corporate income tax, payroll taxes for Social Security and Medicare, and the estate tax) as a percentage of average cash income.

1-Jan-13

VERY PRELIMINARY: SUBJECT TO REVISION

http://www.taxpolicycenter.org

Table T12-0425 The American Taxpayer Relief Act of 2012 (ATRA) as Passed by the Senate Major Individual Income Tax and Estate Tax Provisions Excludes Certain Business Extenders and other Provisions Baseline: Current Law Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2013 1 Detail Table - Tax Units with Children
Percent of Tax Units4 Cash Income Percentile2,3 With Tax Cut Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Top Quintile All Addendum 80-90 90-95 95-99 Top 1 Percent Top 0.1 Percent 99.9 99.8 99.5 98.0 89.4 0.0 0.1 0.3 1.6 10.4 4.6 4.4 4.4 1.8 1.0 14.7 7.1 11.0 6.0 1.4 -4,782 -6,257 -9,855 -20,299 -52,312 -13.3 -11.7 -10.2 -3.0 -1.5 0.1 0.2 0.6 3.4 1.9 15.2 8.6 15.5 30.8 14.9 -3.4 -3.2 -3.1 -1.1 -0.6 22.3 24.2 27.0 36.6 39.1 76.3 96.5 99.1 99.8 99.7 93.7 With Tax Increase 0.0 * 0.0 0.0 0.2 * Percent Change in After-Tax 5 Income 7.2 6.0 4.3 4.9 3.7 4.5 Share of Total Federal Tax Change 8.2 14.0 14.9 24.0 38.8 100.0 Average Federal Tax Change Dollars -1,120 -1,948 -2,186 -3,671 -6,900 -2,974 Percent 110.0 -51.3 -18.6 -16.3 -8.1 -13.8 Share of Federal Taxes Change (% Points) -1.5 -1.6 -0.6 -0.6 4.3 0.0 Under the Proposal -2.5 2.1 10.4 19.7 70.2 100.0 Average Federal Tax Rate6 Change (% Points) -7.7 -5.4 -3.5 -3.8 -2.5 -3.4 Under the Proposal -14.8 5.1 15.4 19.3 28.6 21.2

Baseline Distribution of Income and Federal Taxes by Cash Income Percentile Adjusted for Family Size, 2013 1
Tax Units Cash Income Percentile2,3 Number (thousands) 10,949 10,714 10,166 9,735 8,378 50,150 Percent of Total 21.8 21.4 20.3 19.4 16.7 100.0 Pre-Tax Income Average (dollars) 14,497 36,326 62,074 97,977 273,829 87,888 Percent of Total 3.6 8.8 14.3 21.6 52.1 100.0 Federal Tax Burden Average (dollars) -1,019 3,794 11,736 22,558 85,158 21,606 Percent of Total -1.0 3.8 11.0 20.3 65.9 100.0 After-Tax Income 5 Average (dollars) 15,516 32,532 50,338 75,419 188,671 66,283 Percent of Total 5.1 10.5 15.4 22.1 47.6 100.0 Average Federal Tax Rate 6 -7.0 10.4 18.9 23.0 31.1 24.6

Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Top Quintile All Addendum 80-90 90-95 95-99 Top 1 Percent Top 0.1 Percent

4,581 1,696 1,662 439 40

9.1 3.4 3.3 0.9 0.1

139,259 196,218 322,508 1,792,201 8,825,262

14.5 7.6 12.2 17.9 8.1

35,870 53,652 96,954 675,983 3,502,346

15.2 8.4 14.9 27.4 13.0

103,389 142,567 225,554 1,116,217 5,322,916

14.3 7.3 11.3 14.8 6.5

25.8 27.3 30.1 37.7 39.7

Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0412-8). * Less than 0.05 Note: Tax units with children are those claiming an exemption for children at home or away from home. (1) Calendar year. Baseline is current law. Proposal would extend the tax cuts in TPC's current policy baseline with the following exceptions and modifications: (1) raise statutory individual income tax rate to 39.6 percent on taxable income greater than $450,000 for married couples filing a joint return (MFJ), $400,000 for singles, and $425,000 for heads of household (HoH), indexed for inflation after 2013; (2) reinstate the personal exemption phaseout (PEP) and the limitation on itemized deductions (Pease) for those with adjusted gross incomes greater than $300,000 for MFJ, $250,000 for singles, and $275,000 for HoH, indexed for inflation after 2013; (3) raise rate on long-term capital gains and qualified dividends to 20 percent for those otherwise in the top 39.6 percent tax bracket; (4) raise estate tax rate from 35 to 40 percent; (4) set AMT exemption at $78,750 for MFJ, $50,600 for singles, indexed for inflation after 2012; and (5) index the AMT exemption phaseout threshold and tax bracket threshold for inflation after 2012. Includes impact of extending the sales tax deduction, the above-the-line deductions for education expenses, and the educator deduction but excludes the impact of certain business and other extenders. For a description of TPC's current law and current policy baselines, see http://www.taxpolicycenter.org/T11-0270 (2) Includes both filing and non-filing units but excludes those that are dependents of other tax units. Tax units with negative cash income are excluded from the lowest income class but are included in the totals. For a description of cash income, see http://www.taxpolicycenter.org/TaxModel/income.cfm (3) The income percentile classes used in this table are based on the income distribution for the entire population and contain an equal number of people, not tax units. The incomes used are adjusted for family size by dividing by the square root of the number of people in the tax unit. The resulting percentile breaks are (in 2012 dollars): 20% $13,941; 40% $26,136; 60% $41,226; 80% $64,003; 90% $88,398; 95% $122,605; 99% $295,996; 99.9% $1,565,087. (4) Includes tax units with a change in federal tax burden of $10 or more in absolute value. (5) After-tax income is cash income less: individual income tax net of refundable credits; corporate income tax; payroll taxes (Social Security and Medicare); and estate tax. (6) Average federal tax (includes individual and corporate income tax, payroll taxes for Social Security and Medicare, and the estate tax) as a percentage of average cash income.

1-Jan-13

VERY PRELIMINARY: SUBJECT TO REVISION

http://www.taxpolicycenter.org

Table T12-0425 The American Taxpayer Relief Act of 2012 (ATRA) as Passed by the Senate Major Individual Income Tax and Estate Tax Provisions Excludes Certain Business Extenders and other Provisions Baseline: Current Law Distribution of Federal Tax Change by Cash Income Percentile Adjusted for Family Size, 2013 1 Detail Table - Elderly Tax Units
Percent of Tax Units4 Cash Income Percentile2,3 With Tax Cut Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Top Quintile All Addendum 80-90 90-95 95-99 Top 1 Percent Top 0.1 Percent 97.8 99.4 98.9 97.8 91.6 0.0 0.0 0.2 1.5 8.0 4.0 4.7 7.2 5.7 3.3 15.4 13.6 26.6 23.9 6.6 -3,193 -4,840 -11,508 -42,728 -118,735 -17.9 -16.4 -18.3 -8.3 -4.4 -0.6 -0.3 -1.0 2.6 2.3 11.4 11.1 19.1 42.7 23.0 -3.3 -3.6 -5.2 -3.4 -1.9 15.0 18.5 23.1 37.4 40.9 1.0 7.8 59.7 94.5 98.4 51.5 With Tax Increase 0.0 0.0 0.0 0.0 0.1 * Percent Change in After-Tax 5 Income 0.1 0.5 1.2 2.2 5.4 3.4 Share of Total Federal Tax Change 0.1 1.4 5.8 13.0 79.6 100.0 Average Federal Tax Change Dollars -14 -100 -454 -1,304 -7,570 -1,800 Percent -14.7 -21.8 -19.1 -16.3 -13.2 -13.8 Share of Federal Taxes Change (% Points) 0.0 -0.1 -0.3 -0.3 0.7 0.0 Under the Proposal 0.1 0.8 4.0 10.7 84.3 100.0 Average Federal Tax Rate6 Change (% Points) -0.1 -0.5 -1.1 -2.0 -3.8 -2.7 Under the Proposal 0.8 1.6 4.6 10.1 25.3 17.0

Baseline Distribution of Income and Federal Taxes by Cash Income Percentile Adjusted for Family Size, 2013 1
Tax Units Cash Income Percentile2,3 Number (thousands) 5,152 8,903 8,102 6,300 6,648 35,135 Percent of Total 14.7 25.3 23.1 17.9 18.9 100.0 Pre-Tax Income Average (dollars) 10,284 22,201 41,688 66,058 197,406 65,837 Percent of Total 2.3 8.6 14.6 18.0 56.7 100.0 Federal Tax Burden Average (dollars) 97 459 2,383 7,986 57,494 13,004 Percent of Total 0.1 0.9 4.2 11.0 83.7 100.0 After-Tax Income 5 Average (dollars) 10,188 21,742 39,306 58,072 139,912 52,833 Percent of Total 2.8 10.4 17.2 19.7 50.1 100.0 Average Federal Tax Rate 6 0.9 2.1 5.7 12.1 29.1 19.8

Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Top Quintile All Addendum 80-90 90-95 95-99 Top 1 Percent Top 0.1 Percent

3,052 1,778 1,463 354 35

8.7 5.1 4.2 1.0 0.1

98,141 133,313 223,287 1,267,910 6,252,940

13.0 10.3 14.1 19.4 9.6

17,879 29,458 63,005 516,974 2,678,242

11.9 11.5 20.2 40.1 20.7

80,262 103,856 160,282 750,936 3,574,698

13.2 10.0 12.6 14.3 6.8

18.2 22.1 28.2 40.8 42.8

Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0412-8). * Less than 0.05 Note: Elderly tax units are those with either head or spouse (if filing jointly) age 65 or older. (1) Calendar year. Baseline is current law. Proposal would extend the tax cuts in TPC's current policy baseline with the following exceptions and modifications: (1) raise statutory individual income tax rate to 39.6 percent on taxable income greater than $450,000 for married couples filing a joint return (MFJ), $400,000 for singles, and $425,000 for heads of household (HoH), indexed for inflation after 2013; (2) reinstate the personal exemption phaseout (PEP) and the limitation on itemized deductions (Pease) for those with adjusted gross incomes greater than $300,000 for MFJ, $250,000 for singles, and $275,000 for HoH, indexed for inflation after 2013; (3) raise rate on long-term capital gains and qualified dividends to 20 percent for those otherwise in the top 39.6 percent tax bracket; (4) raise estate tax rate from 35 to 40 percent; (4) set AMT exemption at $78,750 for MFJ, $50,600 for singles, indexed for inflation after 2012; and (5) index the AMT exemption phaseout threshold and tax bracket threshold for inflation after 2012. Includes impact of extending the sales tax deduction, the above-the-line deductions for education expenses, and the educator deduction but excludes the impact of certain business and other extenders. For a description of TPC's current law and current policy baselines, see http://www.taxpolicycenter.org/T11-0270 (2) Includes both filing and non-filing units but excludes those that are dependents of other tax units. Tax units with negative cash income are excluded from the lowest income class but are included in the totals. For a description of cash income, see http://www.taxpolicycenter.org/TaxModel/income.cfm (3) The income percentile classes used in this table are based on the income distribution for the entire population and contain an equal number of people, not tax units. The incomes used are adjusted for family size by dividing by the square root of the number of people in the tax unit. The resulting percentile breaks are (in 2012 dollars): 20% $13,941; 40% $26,136; 60% $41,226; 80% $64,003; 90% $88,398; 95% $122,605; 99% $295,996; 99.9% $1,565,087. (4) Includes tax units with a change in federal tax burden of $10 or more in absolute value. (5) After-tax income is cash income less: individual income tax net of refundable credits; corporate income tax; payroll taxes (Social Security and Medicare); and estate tax. (6) Average federal tax (includes individual and corporate income tax, payroll taxes for Social Security and Medicare, and the estate tax) as a percentage of average cash income.

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