Tax Proposals in the 2012 Budget
The Tax Policy Center offers the table below as a guide to the tax provisions of President Obama’s 2012 budget. Subsequent pages provide detailed descriptions and brief commentaries on each provision. Linked tables show the distributional effects of the overall proposal and of major elements of the plan. Continue to introduction and summary
Download complete analysis in PDF format View distribution tables
* The president would increase individual income taxes only for individuals with adjusted gross income over $200,000 and couples with AGI over $250,000 (2009 values, adjusted for inflation).
Descriptions of tax provisions and revenue estimates come from Department of the Treasury, General Explanations of the Administration’s Fiscal Year 2012 Revenue Proposals, February 2011. The Joint Committee on Taxation has also published cost estimates in Estimated Budget Effects of the Revenue Provisions Contained in the President's Fiscal Year 2012 Budget Proposal.
The Tax Policy Center has posted a variety of tables showing the distributional effects of the entire set of tax proposals, all individual tax proposals, and selected specific proposals. Click here
for a linked guide to those tables. The administration assumes a baseline that permanently extends the 2001–03 tax cuts for all but the highest income taxpayers,** makes the estate tax permanent with 2009 parameters, and indexes the parameters for the alternative minimum tax (AMT) from their 2011 levels.
This analysis does not use the administration’s baseline. Most of our distribution tables compare the effects of tax proposals separately against both a current law baseline and a current policy baseline. The former assumes that the 2001–03 tax cuts expire in 2013 as scheduled (including changes in the estate tax) and that the AMT exemption reverts to its permanent value after 2011. Our current policy baseline assumes extension of all temporary provisions in place for calendar year 2011 except the payroll tax cut. In particular, it indexes the 2011 AMT exemption level for future years, makes the 2001 and 2003 individual income tax cuts permanent, extends certain provisions in the 2009 stimulus bill,*** makes 2011–12 estate tax law permanent with a $5 million exemption and 35 percent tax rate, and continues expiring tax provisions that Congress has regularly extended.
For each tax proposal, a separate web page describes current law, the proposed change, and its distributional effects. We do not consider the long-term effects on the economy.
Because some of the tax proposals are not indexed for inflation, their real effects would change over time. The value of most unindexed proposals would decline in real terms, either because their values are fixed in nominal dollar amounts or because nominal phaseout thresholds would affect more taxpayers. A more complete discussion of the impact of indexing appears at the end of this document.
TPC will update this analysis as the budget moves through Congress. Continue to introduction and summary
**Individuals with adjusted gross income (AGI) over $200,000 and couples with AGI over $250,000, both 2009 values indexed for inflation.
***The current policy baseline assumes extension of three stimulus provisions: expansion of the earned income tax credit (EITC), increased refundability of the child tax credit, and the American Opportunity tax credit.