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Publications
Author: Rohaly, Jeff
The Individual Alternative Minimum Tax: Historical Data and Projections, Updated October 2009 (Research Report)
Author(s):
Katherine Lim , Jeff Rohaly
The alternative minimum tax (AMT), which originally targeted high-income taxpayers, requires annual legislation to prevent it from affecting millions of middle-income individuals each year. There are two primary reasons for the AMT’s broadening impact; its parameters are not indexed for inflation and the 2001-2006 tax cuts reduced regular tax liability without changing AMT liability. In 2009, four million taxpayers will pay $33.5 billion in AMT, but without congressional action that number will rise to 27 million owing $102 billion in 2010. This paper describes the AMT and provides TPC’s latest estimates of AMT coverage, revenue, and distribution.
Published: 10/05/09
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The Distribution of Federal Taxes, 2009-12 (Research Report)
Author(s):
Rachel M. Johnson , Jeff Rohaly
Overall, the federal tax system is progressive. On average, households with higher incomes pay taxes that are a larger share of their income. But barring legislative action, the numerous sunsets and phase-ins that Congress has written into the tax code will result in a tax system that is in a state of flux over the next few years. As a result, current law dictates significant changes in the degree of progressivity in the federal tax system between now and 2012. This paper summarizes the Tax Policy Center's latest estimates of the distribution of federal taxes for 2009 through 2012.
Published: 08/21/09
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Back from the Grave: Revenue and Distributional Effects of Reforming the Federal Estate Tax (Research Report)
Author(s):
Leonard E. Burman , Katherine Lim , Jeff Rohaly
In this paper we review the current wealth transfer tax rules and the changes introduced in 2001. We offer an overview of the methodology underlying the TPC's estate tax model and then use the model to estimate the number of estate tax filers, taxable returns, and the distribution of burden under current law. Finally, we investigate the revenue and distributional effects of several proposals to reform the estate tax, including those put forth by the presidential candidates.
Published: 10/20/08
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The Impact of the Presidential Candidates' Tax Proposals on Effective Marginal Tax Rates (Occasional Paper)
Author(s):
Katherine Lim , Jeff Rohaly
A taxpayer's effective marginal tax rate (EMTR) is the percentage of an additional dollar of income that would be paid in federal income tax. An individual's EMTR could affect the decision to work or save more, or avoid income tax. We use the TPC's microsimulation model of the federal tax system to calculate EMTRs under current law and under the presidential candidates' proposals. The Obama plan would lower EMTRs for the majority of households in 2009. Close to 80 percent of the population would see no change in their EMTR under Senator McCain's plan; most others would face lower rates.
Published: 09/30/08
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An Updated Analysis of the 2008 Presidential Candidates' Tax Plans: Updated September 12, 2008 (Research Report)
Author(s):
Roberton Williams , Leonard E. Burman , Surachai Khitatrakun , Jeff Rohaly , Eric Toder
Tax and fiscal policy will loom large in the next president's domestic policy agenda. Nearly all of the tax cuts enacted since 2001 expire at the end of 2010 and the individual alternative minimum tax (AMT) threatens to ensnare tens of millions of Americans. While a permanent fix palatable to both political parties has proven elusive, both candidates have proposed major tax changes. This report describes how we performed our modeling and analysis, outlines the major tax proposals, and discusses the implications of their policies for the revenue raised, taxpayer economic activity, and the distribution of the tax burden.
Published: 09/12/08
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An Updated Analysis of the 2008 Presidential Candidates' Tax Plans (Research Report)
Author(s):
Leonard E. Burman , Surachai Khitatrakun , Greg Leiserson , Jeff Rohaly , Eric Toder , Roberton Williams
Tax and fiscal policy will loom large in the next president's domestic policy agenda. Nearly all of the tax cuts enacted since 2001 expire at the end of 2010 and the individual alternative minimum tax (AMT) threatens to ensnare tens of millions of Americans. While a permanent fix palatable to both political parties has proven elusive, both candidates have proposed major tax changes. This report describes how we performed our modeling and analysis, outlines the major tax proposals, and discusses the implications of their policies for the revenue raised, taxpayer economic activity, and the distribution of the tax burden.
Published: 07/23/08
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Distribution of the 2001-2006 Tax Cuts: Updated Projections, July 2008 (Research Report)
Author(s):
Greg Leiserson , Jeff Rohaly
Since 2001, Congress has passed a major tax bill almost every year. Most have reduced taxes significantly and, since they were not accompanied by spending cuts, the resulting deficits have increased the national debt. The tax cuts total almost $2.2 trillion over ten years, and that total may be vastly understated if some or all of the cuts are extended beyond their scheduled expiration date of 2010. In addition, the cuts exacerbated the growing problem of the alternative minimum tax (AMT). Barring legislative action, more than 33 million taxpayers will fall prey to the AMT in 2010.
Published: 07/22/08
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The Individual Alternative Minimum Tax (AMT): 12 Facts and Projections (Research Report)
Author(s):
Leonard E. Burman , Julianna Koch , Greg Leiserson , Jeff Rohaly
Congress originally enacted a minimum tax in 1969 to guarantee that high-income individuals paid at least a minimal amount of tax. Under today’s alternative minimum tax (AMT), middle- and upper-income taxpayers must add a number of "preference items" to their taxable income, subtract a special AMT exemption, and calculate their tax according to the AMT rules. If the tax under those rules turns out to be higher than their regular income tax, taxpayers pay the difference as AMT. Unless Congress acts, 26.8 million taxpayers will be affected by the AMT in 2008.
Published: 07/03/08
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The Individual Alternative Minimum Tax: Historical Data and Projections: Updated June 2008 (Research Report)
Author(s):
Greg Leiserson , Jeff Rohaly
Congress enacted a minimum tax in 1969 to guarantee that high-income individuals paid at least some tax. The AMT now threatens to grow from a footnote in the tax code to a major component affecting tens of millions of taxpayers. Although most lower- and middle-income taxpayers will remain unaffected by it, policymakers need to deal with the explosive growth of the AMT from an obscure tax affecting only 20,000 filers in 1970 to one affecting more than 33 million-a third of all taxpayers-by 2010. This document provides updated estimates of AMT participation, revenue, and distribution.
Published: 06/25/08
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The Distribution of Federal Taxes, 2008-11 (Research Report)
Author(s):
Jeff Rohaly
Overall, the federal tax system is highly progressive. On average, households with higher incomes pay taxes that are a larger share of their income. The tax cuts passed since 2001 have reduced progressivity with the notable exception of the 2008 stimulus package. Almost all provisions of the tax cuts are set to expire by the end of 2010. Barring legislative action, effective tax rates will rise across the income spectrum in 2011 with the largest increases in the upper income classes. This paper summarizes the Tax Policy Center's latest estimates of the distribution of federal taxes for 2008 through 2011.
Published: 06/11/08
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