The tables below show the effects of the recently passed Senate tax legislation across various family types and income groups (to see the impact of the House legislation, click here). Tables are prepared using the official score provided by the Joint Committee on Taxation (JCT) for fiscal year 2019. Choose a family type and income quintile to learn more!
|All Families||Bottom 5%||Bottom 5-20%|
|Second 20%||Middle 20%||Fourth 20%||Top 20%|
|Top 2-20%||Top 1%|
|Total Income||All Incomes||$0||$0-$8k||$0-$8k||$8k-$31k||$31k-$61k||$61k-$113k||$113k+||$113k-$711k||$711k+|
|Federal Taxes Paid Before Legislation||22,701||411||196||459||2,197||8,343||21,188||81,254||54,201||595,278|
|Federal Taxes Paid After Legislation||21,205||397||195||442||2,018||7,758||20,010||75,564||50,236||556,815|
|Total Tax Changes||-1,496||-14||-1||-17||-180||-585||-1,177||-5,690||-3,965||-38,463|
|% Change in Federal Taxes Paid||-6.6%||-3.4%||-.5%||-3.7%||-8.2%||-7.%||-5.6%||-7.%||-7.3%||-6.5%|
|Changes to Individual Taxes||-926||-8||-1||-10||-123||-457||-913||-3,114||-2,779||-9,476|
|Rate and Bracket Changes||-865||-5||-1||-6||-21||-322||-1,070||-2,902||-2,007||-19,912|
|Standard Deduction Increase||-555||-15||-1||-18||-267||-754||-996||-743||-758||-452|
|Personal Exemption Repeal||912||13||1||16||229||791||1,458||2,066||2,158||304|
|Special Business Income Deduction||-249||2||0||2||4||5||-17||-1,404||-493||-18,707|
|Child Tax Credit Increase||-449||-5||-1||-6||-159||-426||-651||-1,002||-1,036||-359|
|Other Individual Changes||42||5||0||7||61||63||54||29||37||-118|
|Estate Tax Reduction||-53||0||0||0||0||0||0||-267||-16||-5,031|
|Changes to Business Taxes||-321||-8||0||-9||-61||-133||-248||-1,172||-693||-10,280|
|Business Tax Reform||-321||-8||0||-9||-61||-133||-248||-1,172||-693||-10,280|
This document describes the methodology of the USAFacts tax reform cohort tables available here and here. For a general methodology of USAFacts cohort tables, click here.
We begin with the official revenue score of each tax provision provided by the Joint Committee on Taxation (JCT) for fiscal year 2019. Each JCT revenue category amount is allocated to each family economic unit in our microdata set using an allocator. Most of the allocators are created using a tax calculator that simulates the change in tax liability for each provision for each of the records in the microdata set. Specifically, the calculator first calculates tax liability under current law and then incrementally adds each major provision to get the tax change from that provision. The order is identical to the order presented for major provisions by JCT in its revenue score with the exception of AMT repeal, which is the second provision. (This is based on correspondence with the committee.) We use tax year 2019 law in the calculator as the allocators for the fiscal year 2019 JCT scores.
The provisions and their allocators for the Senate bill are as follows along with their fiscal year 2019 JCT-estimated amount:
Rate and bracket changes (-$130.9 billion)
Reduction in alternative minimum tax (-$82.0 billion)
Modify standard deduction (-$84.1 billion)
Repeal of personal exemptions (+$138.1 billion)
Alternative inflation measure (+$2.2 billion)
Change in Tax Treatment of Individuals’ Business Income (-$37.7 billion)
Modification of child tax credit (-$68.0 billion)
Reform of itemized deductions (+90.2 billion)
Other individual tax changes (+$4.1 billion)
Estate and gift tax reduction (-$8.1 billion)
Business tax reforms (-$47.4 billion)
Comparisons to other organizations
These cohort tables are similar but may differ slightly from distributional tables put forth by other organizations such as the Joint Committee on Taxation (JCT), Tax Policy Center, Tax Foundation, Citizens for Tax Justice, etc. for a variety of reasons, including unit of analysis, income measures that organize the tax units, which federal taxes are included, tax incidence assumptions, extrapolation assumptions, and other methodological differences.
Total Income Definition
In these tables, total income is measured as the sum of average wages and salaries, average supplements to wages and salaries, average self-employment income, average interest income, average rental income, average s-corp income, average dividend income, average capital gains income, average net retirement income, average other market income, and all government income minus refundable tax credits.
Affordable Care Act
We exclude the effect of the removal of the Affordable Care Act’s individual mandate provision, which is included in the Senate bill.