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T17-0221 - Revenue and Distributionally Neutral Proposal to Lower Individual and Corporate Income Tax Rates and Repeal Certain Tax Expenditures; Distribution of Federal Tax Change by Expanded Cash Income Level, 2027

Table shows the distributional effect by expanded cash income level of a revenue and distributionally neutral proposal that would: repeal the Net Investment Income Tax (NIIT), individual and corporate alternative minimum tax (AMT), phase-out of personal exemptions, and Pease limitation on itemized deductions; set individual tax rates of 0, 5, 16, 29.6; repeal individual income tax expenditures with the exception of EITC, CTC, and partial exclusion of Social Security benefits; set corporate tax rate of 26 percent; implement territorial system plus minimum tax on foreign-source income; and repeal corporate tax expenditures. Proposal is designed to be revenue neutral in FY 2037. Our criteria for distributional neutrality is that the absolute value of the percentage change in after-tax income is less than or equal to 1 percent for all income percentile classes. Results are relative to a current law baseline.

September 15, 2017