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tax topics
 
Fiscal Cliff: Options to Raise Statutory Individual Income Tax Rates for High Income Taxpayers

The Tax Policy Center analyzed four approaches to raising individual income tax rates on high income taxpayers. Click on an option below to read a brief description and to see links to tables showing the effects on the distribution of taxes and effective marginal tax rates. All estimates are for 2013 under the current policy baseline, which includes extension of the 2001-2010 tax cuts and a patched AMT.

Tables and Descriptions of Statutory Rate Increase Options



Raise the top two individual income tax rates by one percentage point each
This option would raise the top two individual income tax rates by one percentage point to 34 percent and 36 percent, respectively.




Effective Marginal Tax Rate Tables


Raise the top individual income tax rate by one percentage point
This option would raise the top individual income tax rate by one percentage point to 36 percent.

Distribution Tables


Effective Marginal Tax Rate Tables


Raise the top individual income tax rate by one percentage point for taxpayers with income over $500K/$400K AGI threshold
This option would raise the top individual income tax rate by one percentage point to 36 percent by creating a new 36 percent tax bracket. The bracket would apply to taxable income above relevant thresholds:

  • Married couples filing jointly: $500,000 less the standard deduction and two personal exemptions (half that amount for married couples filing separately)
  • Single filers: $400,000 less the standard deduction and one exemption
  • Heads of household: $450,000 less the standard deduction and one exemption
The thresholds are indexed for inflation, starting with 2009 values.

Distribution Tables


Effective Marginal Tax Rate Tables


Raise the top individual income tax rate by one percentage point for taxpayers with income over $1m/$800K AGI threshold
This option would raise the top individual income tax rate by one percentage point to 36 percent by creating a new 36 percent tax bracket. The bracket would apply to taxable income above relevant thresholds:

  • Married couples filing jointly: $1,000,000 less the standard deduction and two personal exemptions (half that amount for married couples filing separately)
  • Single filers: $800,000 less the standard deduction and one exemption
  • Heads of household: $900,000 less the standard deduction and one exemption
The thresholds are indexed for inflation, starting with 2009 values.

Distribution Tables


Effective Marginal Tax Rate Tables