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 T12-0428 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: Patched 2012 Law (Payroll Cut Extended, No Health Taxes, AMT Fix) Distribution of Federal Tax Change by Cash Income Level, 2013 1 Summary Table
Cash Income Level (thousands of 2012 dollars) 2 Tax Units with Tax Increase or Cut 3 With Tax Cut Pct of Tax Avg Tax Cut Units 0.0 * * 0.0 0.1 0.2 0.2 0.3 1.7 0.4 * 0.1 0 ** ** 0 -28 -103 -150 -215 -287 -153 ** -220 With Tax Increase Pct of Tax Avg Tax Units Increase 64.2 61.4 72.9 77.8 79.9 83.5 86.3 89.6 93.1 99.5 99.9 77.1 106 249 406 572 724 985 1,399 1,991 2,976 15,055 171,330 1,635 Percent Change in After-Tax Income 4 -1.3 -1.0 -1.3 -1.4 -1.5 -1.6 -1.7 -1.7 -1.3 -3.1 -7.8 -2.3 Share of Total Federal Tax Change 0.6 1.9 2.9 3.9 4.0 10.6 8.9 18.1 6.5 5.4 37.1 100.0 Average Federal Tax Change ($) Average Federal Tax Rate5 Change (% Points) 1.3 1.0 1.2 1.3 1.3 1.3 1.4 1.3 1.0 2.2 5.2 1.8 Under the Proposal 3.0 1.7 6.8 11.6 14.0 17.1 19.3 22.0 26.2 32.1 38.5 21.7

Less than 10 10-20 20-30 30-40 40-50 50-75 75-100 100-200 200-500 500-1,000 More than 1,000 All

68 153 297 445 579 822 1,206 1,784 2,711 14,812 170,341 1,257

Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0412-8). Number of AMT Taxpayers (millions). Baseline: 4.0 Proposal: 3.4 * Less than 0.05 ** Insufficient data (1) Calendar year. Baseline is current policy with the following modifications: extension of 2 percent payroll tax cut; repeal of the health care legislation taxes on earnings, and investment income; repeal of the 10 percent limitation on the deductibility of medical expenses. 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) Includes tax units with a change in federal tax burden of $10 or more in absolute value. (4) 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. (5) 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 T12-0428 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: Patched 2012 Law (Payroll Cut Extended, No Health Taxes, AMT Fix) Distribution of Federal Tax Change by Cash Income Level, 2013 1 Detail Table
Cash Income Level (thousands of 2012 dollars) 2 Less than 10 10-20 20-30 30-40 40-50 50-75 75-100 100-200 200-500 500-1,000 More than 1,000 All Percent of Tax Units 3 With Tax Cut 0.0 * * 0.0 0.1 0.2 0.2 0.3 1.7 0.4 * 0.1 With Tax Increase 64.2 61.4 72.9 77.8 79.9 83.5 86.3 89.6 93.1 99.5 99.9 77.1 Percent Change in After-Tax Income 4 -1.3 -1.0 -1.3 -1.4 -1.5 -1.6 -1.7 -1.7 -1.3 -3.1 -7.8 -2.3 Share of Total Federal Tax Change 0.6 1.9 2.9 3.9 4.0 10.6 8.9 18.1 6.5 5.4 37.1 100.0 Average Federal Tax Change Dollars 68 153 297 445 579 822 1,206 1,784 2,711 14,812 170,341 1,257 Percent 73.0 151.0 21.0 12.1 10.0 8.4 7.6 6.5 3.8 7.2 15.5 9.1 Share of Federal Taxes Change (% Points) 0.0 0.2 0.1 0.1 0.0 -0.1 -0.1 -0.6 -0.8 -0.1 1.3 0.0 Under the Proposal 0.1 0.3 1.4 3.0 3.7 11.4 10.4 24.9 14.9 6.7 23.0 100.0 Average Federal Tax Rate5 Change (% Points) 1.3 1.0 1.2 1.3 1.3 1.3 1.4 1.3 1.0 2.2 5.2 1.8 Under the Proposal 3.0 1.7 6.8 11.6 14.0 17.1 19.3 22.0 26.2 32.1 38.5 21.7

Baseline Distribution of Income and Federal Taxes by Cash Income Level, 2013 1
Cash Income Level (thousands of 2012 dollars) 2 Less than 10 10-20 20-30 30-40 40-50 50-75 75-100 100-200 200-500 500-1,000 More than 1,000 All Tax Units Number (thousands) 16,041 24,243 19,317 17,482 13,879 25,633 14,610 20,204 4,780 728 433 158,260 Percent of Total 10.1 15.3 12.2 11.1 8.8 16.2 9.2 12.8 3.0 0.5 0.3 100.0 Pre-Tax Income Average (dollars) 5,390 15,105 25,084 35,579 45,612 62,053 88,235 133,782 283,732 683,264 3,295,487 69,527 Percent of Total 0.8 3.3 4.4 5.7 5.8 14.5 11.7 24.6 12.3 4.5 13.0 100.0 Federal Tax Burden Average (dollars) 93 101 1,415 3,672 5,807 9,786 15,789 27,634 71,573 204,780 1,098,670 13,816 Percent of Total 0.1 0.1 1.3 2.9 3.7 11.5 10.6 25.5 15.7 6.8 21.8 100.0 After-Tax Income 4 Average (dollars) 5,297 15,004 23,669 31,907 39,805 52,267 72,446 106,148 212,158 478,484 2,196,818 55,710 Percent of Total 1.0 4.1 5.2 6.3 6.3 15.2 12.0 24.3 11.5 4.0 10.8 100.0 Average Federal Tax Rate 5 1.7 0.7 5.6 10.3 12.7 15.8 17.9 20.7 25.2 30.0 33.3 19.9

Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0412-8). Number of AMT Taxpayers (millions). Baseline: 4.0 Proposal: 3.4 * Less than 0.05 (1) Calendar year. Baseline is current policy with the following modifications: extension of 2 percent payroll tax cut; repeal of the health care legislation taxes on earnings, and investment income; repeal of the 10 percent limitation on the deductibility of medical expenses. 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) Includes tax units with a change in federal tax burden of $10 or more in absolute value. (4) 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. (5) 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 T12-0428 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: Patched 2012 Law (Payroll Cut Extended, No Health Taxes, AMT Fix) 1 Distribution of Federal Tax Change by Cash Income Level, 2013 Detail Table - Single Tax Units
Cash Income Level (thousands of 2012 dollars) 2 Less than 10 10-20 20-30 30-40 40-50 50-75 75-100 100-200 200-500 500-1,000 More than 1,000 All Percent of Tax Units 3 With Tax Cut 0.0 * 0.0 0.0 0.0 * 0.1 0.6 2.5 1.1 0.1 0.1 With Tax Increase 61.7 50.6 66.7 72.9 78.7 80.0 78.3 74.2 89.6 98.3 99.6 66.6 Percent Change in After-Tax Income 4 -1.3 -0.9 -1.2 -1.4 -1.6 -1.7 -1.6 -1.4 -1.4 -3.8 -8.6 -1.8 Share of Total Federal Tax Change 1.9 4.8 7.2 9.4 9.2 18.2 8.2 9.1 3.9 3.8 24.2 100.0 Average Federal Tax Change Dollars 63 123 265 418 608 822 1,098 1,386 2,809 18,076 182,637 581 Percent 20.9 14.7 10.1 8.4 7.6 6.7 5.6 4.3 3.5 8.4 15.4 7.7 Share of Federal Taxes Change (% Points) 0.1 0.2 0.1 0.1 0.0 -0.2 -0.2 -0.5 -0.3 0.0 0.9 0.0 Under the Proposal 0.8 2.7 5.6 8.7 9.2 20.9 11.1 15.9 8.3 3.5 13.0 100.0 Average Federal Tax Rate5 Change (% Points) 1.2 0.8 1.1 1.2 1.3 1.3 1.3 1.1 1.0 2.6 5.5 1.5 Under the Proposal 6.9 6.4 11.6 15.2 18.8 21.4 23.8 25.5 29.2 34.0 41.3 20.7

Baseline Distribution of Income and Federal Taxes by Cash Income Level, 2013 1
Cash Income Level (thousands of 2012 dollars) 2 Less than 10 10-20 20-30 30-40 40-50 50-75 75-100 100-200 200-500 500-1,000 More than 1,000 All Tax Units Number (thousands) 12,280 16,353 11,329 9,396 6,306 9,292 3,125 2,763 581 89 56 72,035 Percent of Total 17.1 22.7 15.7 13.0 8.8 12.9 4.3 3.8 0.8 0.1 0.1 100.0 Pre-Tax Income Average (dollars) 5,327 14,997 24,885 35,554 45,513 61,373 87,575 132,172 286,777 684,999 3,307,366 39,146 Percent of Total 2.3 8.7 10.0 11.9 10.2 20.2 9.7 13.0 5.9 2.2 6.5 100.0 Federal Tax Burden Average (dollars) 303 837 2,630 4,980 7,950 12,322 19,727 32,281 81,037 214,605 1,184,243 7,530 Percent of Total 0.7 2.5 5.5 8.6 9.2 21.1 11.4 16.5 8.7 3.5 12.1 100.0 After-Tax Income 4 Average (dollars) 5,024 14,160 22,255 30,574 37,564 49,051 67,849 99,891 205,740 470,394 2,123,123 31,617 Percent of Total 2.7 10.2 11.1 12.6 10.4 20.0 9.3 12.1 5.3 1.8 5.2 100.0 Average Federal Tax Rate 5 5.7 5.6 10.6 14.0 17.5 20.1 22.5 24.4 28.3 31.3 35.8 19.2

Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0412-8). * Less than 0.05 (1) Calendar year. Baseline is current policy with the following modifications: extension of 2 percent payroll tax cut; repeal of the health care legislation taxes on earnings, and investment income; repeal of the 10 percent limitation on the deductibility of medical expenses. 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) Includes tax units with a change in federal tax burden of $10 or more in absolute value. (4) 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. (5) 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 T12-0428 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: Patched 2012 Law (Payroll Cut Extended, No Health Taxes, AMT Fix) 1 Distribution of Federal Tax Change by Cash Income Level, 2013 Detail Table - Married Tax Units Filing Jointly
Cash Income Level (thousands of 2012 dollars) 2 Less than 10 10-20 20-30 30-40 40-50 50-75 75-100 100-200 200-500 500-1,000 More than 1,000 All Percent of Tax Units 3 With Tax Cut 0.0 0.0 0.0 0.0 0.0 0.0 0.0 * 1.5 0.3 * 0.1 With Tax Increase 48.9 69.3 66.5 73.6 74.9 83.3 88.2 92.1 93.4 99.6 99.9 83.6 Percent Change in After-Tax Income 4 -1.6 -1.2 -1.1 -1.2 -1.1 -1.4 -1.7 -1.7 -1.3 -3.0 -7.6 -2.5 Share of Total Federal Tax Change 0.1 0.4 0.7 1.2 1.6 6.9 9.0 22.3 7.9 6.4 43.3 100.0 Average Federal Tax Change Dollars 72 189 279 402 474 778 1,230 1,856 2,699 14,257 165,732 2,267 Percent 91.5 -46.3 446.0 25.7 15.3 10.1 8.5 7.0 3.9 7.0 15.5 9.2 Share of Federal Taxes Change (% Points) 0.0 0.0 0.1 0.1 0.1 0.1 -0.1 -0.6 -0.9 -0.2 1.5 0.0 Under the Proposal 0.0 0.0 0.1 0.5 1.0 6.4 9.7 28.9 17.9 8.2 27.2 100.0 Average Federal Tax Rate5 Change (% Points) 1.6 1.2 1.1 1.1 1.0 1.2 1.4 1.4 1.0 2.1 5.1 1.9 Under the Proposal 3.3 -1.4 1.3 5.5 7.8 13.6 17.7 21.3 25.6 31.9 38.1 23.1

Baseline Distribution of Income and Federal Taxes by Cash Income Level, 2013 1
Cash Income Level (thousands of 2012 dollars) 2 Less than 10 10-20 20-30 30-40 40-50 50-75 75-100 100-200 200-500 500-1,000 More than 1,000 All Tax Units Number (thousands) 1,457 2,877 3,317 4,027 4,740 12,272 10,124 16,567 4,043 616 360 60,744 Percent of Total 2.4 4.7 5.5 6.6 7.8 20.2 16.7 27.3 6.7 1.0 0.6 100.0 Pre-Tax Income Average (dollars) 4,559 15,669 25,449 35,715 45,931 62,784 88,587 134,301 283,374 683,221 3,245,436 116,746 Percent of Total 0.1 0.6 1.2 2.0 3.1 10.9 12.7 31.4 16.2 5.9 16.5 100.0 Federal Tax Burden Average (dollars) 79 -407 62 1,566 3,103 7,738 14,447 26,713 69,946 203,582 1,071,801 24,702 Percent of Total 0.0 -0.1 0.0 0.4 1.0 6.3 9.8 29.5 18.9 8.4 25.7 100.0 After-Tax Income 4 Average (dollars) 4,481 16,076 25,386 34,149 42,828 55,046 74,139 107,588 213,428 479,640 2,173,635 92,044 Percent of Total 0.1 0.8 1.5 2.5 3.6 12.1 13.4 31.9 15.4 5.3 14.0 100.0 Average Federal Tax Rate 5 1.7 -2.6 0.3 4.4 6.8 12.3 16.3 19.9 24.7 29.8 33.0 21.2

Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0412-8). * Less than 0.05 (1) Calendar year. Baseline is current policy with the following modifications: extension of 2 percent payroll tax cut; repeal of the health care legislation taxes on earnings, and investment income; repeal of the 10 percent limitation on the deductibility of medical expenses. 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) Includes tax units with a change in federal tax burden of $10 or more in absolute value. (4) 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. (5) 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 T12-0428 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: Patched 2012 Law (Payroll Cut Extended, No Health Taxes, AMT Fix) 1 Distribution of Federal Tax Change by Cash Income Level, 2013 Detail Table - Head of Household Tax Units
Cash Income Level (thousands of 2012 dollars) 2 Less than 10 10-20 20-30 30-40 40-50 50-75 75-100 100-200 200-500 500-1,000 More than 1,000 All Percent of Tax Units 3 With Tax Cut 0.0 0.0 * 0.0 0.0 0.0 * 0.7 2.3 1.4 * * With Tax Increase 88.0 92.3 92.9 93.4 91.3 92.5 92.1 94.6 96.8 98.4 99.8 92.0 Percent Change in After-Tax Income 4 -1.3 -1.3 -1.5 -1.7 -1.7 -1.9 -1.9 -1.8 -1.1 -2.9 -7.5 -1.8 Share of Total Federal Tax Change 1.3 7.3 11.4 13.2 11.7 22.8 10.3 8.6 1.8 1.4 10.2 100.0 Average Federal Tax Change Dollars 92 231 392 551 694 965 1,321 1,766 2,256 13,948 160,102 651 Percent -8.3 -10.5 -46.0 24.0 13.1 9.8 8.2 6.2 3.1 7.2 16.0 14.9 Share of Federal Taxes Change (% Points) 0.5 2.3 2.0 0.7 -0.2 -1.5 -1.1 -1.6 -0.9 -0.2 0.1 0.0 Under the Proposal -1.9 -8.1 -1.7 8.8 13.1 33.0 17.6 19.3 7.6 2.7 9.7 100.0 Average Federal Tax Rate5 Change (% Points) 1.5 1.5 1.6 1.6 1.5 1.6 1.5 1.4 0.8 2.1 5.1 1.6 Under the Proposal -16.1 -13.1 -1.8 8.0 13.2 17.6 19.9 23.6 27.1 30.9 37.0 12.6

Baseline Distribution of Income and Federal Taxes by Cash Income Level, 2013 1
Cash Income Level (thousands of 2012 dollars) 2 Less than 10 10-20 20-30 30-40 40-50 50-75 75-100 100-200 200-500 500-1,000 More than 1,000 All Tax Units Number (thousands) 2,173 4,761 4,367 3,599 2,531 3,553 1,170 734 117 15 10 23,101 Percent of Total 9.4 20.6 18.9 15.6 11.0 15.4 5.1 3.2 0.5 0.1 0.0 100.0 Pre-Tax Income Average (dollars) 6,307 15,129 25,305 35,454 45,338 61,312 87,387 129,043 280,322 673,865 3,141,640 40,006 Percent of Total 1.5 7.8 12.0 13.8 12.4 23.6 11.1 10.3 3.5 1.1 3.3 100.0 Federal Tax Burden Average (dollars) -1,110 -2,212 -852 2,291 5,290 9,800 16,081 28,704 73,750 194,567 1,003,507 4,368 Percent of Total -2.4 -10.4 -3.7 8.2 13.3 34.5 18.6 20.9 8.5 2.9 9.6 100.0 After-Tax Income 4 Average (dollars) 7,417 17,341 26,157 33,163 40,047 51,512 71,306 100,339 206,572 479,298 2,138,133 35,637 Percent of Total 2.0 10.0 13.9 14.5 12.3 22.2 10.1 9.0 2.9 0.9 2.5 100.0 Average Federal Tax Rate 5 -17.6 -14.6 -3.4 6.5 11.7 16.0 18.4 22.2 26.3 28.9 31.9 10.9

Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0412-8). * Less than 0.05 (1) Calendar year. Baseline is current policy with the following modifications: extension of 2 percent payroll tax cut; repeal of the health care legislation taxes on earnings, and investment income; repeal of the 10 percent limitation on the deductibility of medical expenses. 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) Includes tax units with a change in federal tax burden of $10 or more in absolute value. (4) 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. (5) 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 T12-0428 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: Patched 2012 Law (Payroll Cut Extended, No Health Taxes, AMT Fix) Distribution of Federal Tax Change by Cash Income Level, 2013 1 Detail Table - Tax Units with Children
Cash Income Level (thousands of 2012 dollars) 2 Less than 10 10-20 20-30 30-40 40-50 50-75 75-100 100-200 200-500 500-1,000 More than 1,000 All Percent of Tax Units 3 With Tax Cut 0.0 0.0 * 0.0 0.2 0.2 0.0 0.1 0.8 0.1 * 0.1 With Tax Increase 78.7 94.8 95.3 95.7 94.1 95.7 97.5 98.1 98.4 99.8 100.0 95.1 Percent Change in After-Tax Income 4 -1.3 -1.4 -1.5 -1.7 -1.7 -1.9 -2.0 -2.0 -1.4 -3.0 -7.6 -2.5 Share of Total Federal Tax Change 0.3 1.6 2.4 3.1 3.2 9.7 10.1 22.1 7.3 5.5 34.6 100.0 Average Federal Tax Change Dollars 87 242 408 575 714 1,017 1,458 2,119 2,916 14,286 161,248 1,793 Percent -7.5 -9.0 -25.4 42.6 17.6 11.6 9.8 7.9 4.1 7.1 15.6 10.7 Share of Federal Taxes Change (% Points) 0.1 0.3 0.3 0.2 0.1 0.1 -0.1 -0.7 -1.1 -0.3 1.1 0.0 Under the Proposal -0.3 -1.5 -0.7 1.0 2.1 9.0 10.8 29.0 17.8 8.0 24.7 100.0 Average Federal Tax Rate5 Change (% Points) 1.5 1.6 1.6 1.6 1.6 1.6 1.7 1.6 1.0 2.1 5.1 2.0 Under the Proposal -18.4 -16.1 -4.7 5.4 10.5 15.7 18.4 21.5 26.0 31.8 37.9 21.2

Baseline Distribution of Income and Federal Taxes by Cash Income Level, 2013 1
Cash Income Level (thousands of 2012 dollars) 2 Less than 10 10-20 20-30 30-40 40-50 50-75 75-100 100-200 200-500 500-1,000 More than 1,000 All Tax Units Number (thousands) 2,962 5,804 5,335 4,816 4,037 8,599 6,206 9,390 2,258 345 193 50,150 Percent of Total 5.9 11.6 10.6 9.6 8.1 17.2 12.4 18.7 4.5 0.7 0.4 100.0 Pre-Tax Income Average (dollars) 5,794 15,260 25,332 35,564 45,576 62,528 88,416 134,200 283,593 680,629 3,158,341 87,888 Percent of Total 0.4 2.0 3.1 3.9 4.2 12.2 12.5 28.6 14.5 5.3 13.8 100.0 Federal Tax Burden Average (dollars) -1,152 -2,704 -1,606 1,351 4,060 8,792 14,818 26,734 70,753 202,460 1,035,394 16,838 Percent of Total -0.4 -1.9 -1.0 0.8 1.9 9.0 10.9 29.7 18.9 8.3 23.7 100.0 After-Tax Income 4 Average (dollars) 6,946 17,964 26,938 34,213 41,516 53,735 73,598 107,466 212,839 478,170 2,122,947 71,050 Percent of Total 0.6 2.9 4.0 4.6 4.7 13.0 12.8 28.3 13.5 4.6 11.5 100.0 Average Federal Tax Rate 5 -19.9 -17.7 -6.3 3.8 8.9 14.1 16.8 19.9 25.0 29.8 32.8 19.2

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 policy with the following modifications: extension of 2 percent payroll tax cut; repeal of the health care legislation taxes on earnings, and investment income; repeal of the 10 percent limitation on the deductibility of medical expenses. 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) Includes tax units with a change in federal tax burden of $10 or more in absolute value. (4) 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. (5) 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 T12-0428 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: Patched 2012 Law (Payroll Cut Extended, No Health Taxes, AMT Fix) Distribution of Federal Tax Change by Cash Income Level, 2013 1 Detail Table - Elderly Tax Units
Cash Income Level (thousands of 2012 dollars) 2 Less than 10 10-20 20-30 30-40 40-50 50-75 75-100 100-200 200-500 500-1,000 More than 1,000 All Percent of Tax Units 3 With Tax Cut 0.0 0.0 0.0 0.0 0.0 0.2 0.6 0.6 4.8 0.9 0.1 0.3 With Tax Increase 4.7 4.9 18.0 29.0 36.8 45.4 45.9 54.2 73.7 98.6 99.7 30.3 Percent Change in After-Tax Income 4 -0.1 0.0 -0.1 -0.2 -0.3 -0.4 -0.4 -0.5 -0.8 -3.3 -8.1 -1.3 Share of Total Federal Tax Change 0.0 0.2 0.7 1.2 1.6 4.8 3.5 8.2 6.9 9.2 63.7 100.0 Average Federal Tax Change Dollars 4 6 34 69 114 206 308 560 1,796 15,577 174,288 709 Percent 5.8 5.4 5.7 5.1 4.7 3.8 2.8 2.4 2.6 7.5 15.3 6.8 Share of Federal Taxes Change (% Points) 0.0 0.0 0.0 0.0 0.0 -0.2 -0.3 -1.0 -0.7 0.1 2.3 0.0 Under the Proposal 0.0 0.2 0.8 1.5 2.2 8.4 8.4 22.3 17.4 8.4 30.3 100.0 Average Federal Tax Rate5 Change (% Points) 0.1 0.0 0.1 0.2 0.3 0.3 0.4 0.4 0.6 2.3 5.3 1.1 Under the Proposal 1.3 0.7 2.5 4.0 5.6 9.2 13.2 18.0 25.0 32.7 39.7 17.0

Baseline Distribution of Income and Federal Taxes by Cash Income Level, 2013 1
Cash Income Level (thousands of 2012 dollars) 2 Less than 10 10-20 20-30 30-40 40-50 50-75 75-100 100-200 200-500 500-1,000 More than 1,000 All Tax Units Number (thousands) 2,099 7,199 4,736 4,155 3,401 5,792 2,864 3,657 962 148 91 35,135 Percent of Total 6.0 20.5 13.5 11.8 9.7 16.5 8.2 10.4 2.7 0.4 0.3 100.0 Pre-Tax Income Average (dollars) 6,146 15,399 24,906 35,411 45,731 61,846 87,420 133,081 285,711 687,513 3,301,216 65,837 Percent of Total 0.6 4.8 5.1 6.4 6.7 15.5 10.8 21.0 11.9 4.4 13.0 100.0 Federal Tax Burden Average (dollars) 76 105 595 1,348 2,430 5,475 11,204 23,398 69,565 208,982 1,136,781 10,495 Percent of Total 0.0 0.2 0.8 1.5 2.2 8.6 8.7 23.2 18.2 8.4 28.1 100.0 After-Tax Income 4 Average (dollars) 6,070 15,293 24,311 34,063 43,302 56,371 76,216 109,682 216,146 478,531 2,164,436 55,343 Percent of Total 0.7 5.7 5.9 7.3 7.6 16.8 11.2 20.6 10.7 3.6 10.1 100.0 Average Federal Tax Rate 5 1.2 0.7 2.4 3.8 5.3 8.9 12.8 17.6 24.4 30.4 34.4 15.9

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 policy with the following modifications: extension of 2 percent payroll tax cut; repeal of the health care legislation taxes on earnings, and investment income; repeal of the 10 percent limitation on the deductibility of medical expenses. 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) Includes tax units with a change in federal tax burden of $10 or more in absolute value. (4) 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. (5) 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.