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tax topics
 
Distribution of the 2001 - 2008 Tax Cuts

Federal Tax Legislation, 2001–2008

  • Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA)
  • The Job Creation and Worker Assistance Act of 2002 (JCWAA)
  • The Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA)
  • Working Families Tax Relief Act of 2004 (WFTRA)
  • American Jobs Creation Act of 2004 (AJCA)
  • Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA)
  • Pension Protection Act of 2006
  • Tax Increase Prevention Act of 2007
  • Economic Stimulus Act of 2008
  • Emergency Economic Stabilization Act of 2008
  • Congress has cut taxes every year since 2001, most importantly with the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA).
  • The 2001–2006 tax cuts reduced most individual tax rates including those on capital gains and dividends; expanded the child tax credit; increased incentives to save; phased out the limitations on itemized deductions and personal exemptions for high-income taxpayers; and phased out the estate tax. Virtually all of the cuts end by 2011 when EGTRRA and JGTRRA sunset.
    Source: Major Enacted Tax Legislation, 1940-2009
  • The revenue cost of the tax cuts totals approximately $2.2 trillion over the 2001–2010 period. Annual costs will rise if Congress extends the tax cuts beyond 2010 or continues AMT relief after 2009.
    Source: The Distribution of the 2001-2006 Tax Cuts: Updated Projections, July 2008
  • The tax cuts have disproportionately benefited high-income taxpayers. In 2010, the tax cuts will raise after-tax income by 0.7 percent for the lowest quintile, by 2.5 percent for the middle quintile, and by 4.0 percent for the top quintile.
    Source: Tax Policy Center Tables T08-0147 and T08-0151
tax_cuts_fig1
  • Nearly two-thirds of the tax cuts will go to the top quintile of taxpayers in 2010 and only 1 percent will go to the lowest quintile.
    Source: Tax Policy Center Table T08-0151
shares_of_tax_2010
  • Over the long-term, tax cuts must be financed through spending cuts, other tax increases, or a combination of the two. Who bears the cost of that financing will determine the ultimate distribution of the 2001-2008 tax cuts. The more progressive the method of finance, the less regressive the distribution of the tax cuts will be.
    Source: Tax Policy Center Table T08-0161

See all publications related to the 2001 tax cut

See all estimates related to the 2001–2008 tax cuts:

See all tax facts (background data) related to the 2001–2006 tax cuts.