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Tax Topics

Tax Topics

2009 Tax Stimulus
2012 Election Tax Plans
2015 Budget
Alternative Minimum Tax (AMT)
American Jobs Act of 2011
Brief Description of the Model 2013
Camp Tax Reform Plan
Current-Law Distribution of Taxes
Deficit Reduction Proposals
Distribution of the 2001 - 2008 Tax Cuts
Earned Income Tax Credit
Economic Stimulus
Education Tax Incentives
Estate and Gift Taxes
Expiration of the Bush Tax Cuts
Explanation of Income Measures 2013
Federal Budget
Fiscal Cliff
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Flow-Through-Enterprises
Guide to TPC Tables
Health Insurance Tax Incentives
Homeownership
How to Interpret Distribution Tables 2013
Marriage Penalties
Model FAQ 2013
Model Related Resources and FAQs
Payroll Taxes
Presidential Transition - 2009
Recent Tax Stimulus Legislation
Retirement Saving
Tax Encyclopedia Index
Tax Expenditures
Tax Reform Proposals
Value-Added Tax (VAT)
Who Doesn't Pay Federal Taxes?
Working Families

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tax topics
 
How does the president’s plan differ from full extension of the tax cuts?

Compared against revenues that the federal government would collect over the next decade if the 2001-2003 tax cuts all expire as scheduled under current law, the president’s proposal to extend the cuts primarily for low- and middle-income households would cost about $3 trillion while permanent extension of all of the tax cuts would cost about $3.7 trillion. Under either plan, tax savings would increase with income: the poorest quintile (or fifth) of households would get an average income tax cut of about $70 in 2012 under either plan, while households in the top quintile would save an average of about $2,900 under the president’s proposal and $9,000 if Congress extends all the cuts. At the very top of the income distribution, households in the top 0.1 percent—with income over $2.7 million and an average income of $8.4 million—would save an average of about $60,000 under President Obama’s plan and roughly $370,000 with complete extension.

Who would be affected compared to a full extension? more.

The Debate over Expiring Tax Cuts: What about the Deficit?

  • Explains the tradeoffs between deficit reduction and the impact on taxpayers of letting specific tax cuts to expire.

 TCE_Change_AfterTax_Income

About 19 percent of the revenue loss from full extension of the tax cuts goes for provisions benefitting high-income households.

 

TCE_Annual_Revenue_Cost

Distributional Effects of the Expiration of the Tax Cuts: From Current Law to the President's Proposal to Current Policy, 2012