FEDERAL INCOME TAX BURDEN SHIFTED UPWARDS UNDER NEW TAX by qtn19068

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									                                                     CONGRESS OF THE UNITED STATES

                               JOINT ECONOMIC COMMITTEE
                                                            VICE CHAIRMAN JIM SAXTON
                                                                        PRESS RELEASE
     For Immediate Release                                                                                                              Press Release #108-35
     June 3, 2003                               FEDERAL INCOME TAX                                                                      Contact: Christopher Frenze
                                                                                                                                        Chief Economist to the V.C.
                                                  BURDEN SHIFTED                                                                        (202) 225-3923
                                                                                                                                        Stephen Thompson
                                                  UPWARDS UNDER                                                                         Radio & T.V.
                                                                                                                                        (202) 225-4765
                                                   NEW TAX BILL
              WASHINGTON, D.C. – The new tax bill provides the largest percentage reductions in
        the income taxes of low and middle income groups, and as a result, the share of total income taxes
        paid by upper income groups under the new tax law will increase, Vice Chairman Jim Saxton said
        today. Saxton based his remarks on new figures on federal individual income taxes provided by the
        Treasury Department.

               “The Treasury figures show that all income groups will receive tax benefits under the new tax
        law, but that low and middle income households receive the largest reductions as a percent of their
        tax liability,” Saxton said. “Consequently, after the tax reduction, the shares of the income tax paid
        by low and middle income taxpayers will decline, or be essentially unchanged, while those of upper
        income taxpayers will actually increase a bit.

              “For example, taxpayers with incomes between $30,000 and $40,000 will have their income
        taxes reduced by 19.3 percent under the new tax bill. As a result, their share of the total income
        taxes paid will go from 2.1 percent under previous law to 1.9 percent under the tax relief bill. On
        the other hand, taxpayers with incomes over $200,000 will have their income taxes pared by 10.8
        percent, and their share of the income tax burden will rise slightly from 44.8 percent to 45.4
        percent.

              “These figures also reflect the progression in tax payments under the new tax law. Taxpayers
        with incomes in excess of $75,000 will account for 85.3 percent of the income taxes paid. As I
        have pointed out before, taxpayers in the top half of income earners account for at least 96 percent
        of the income tax burden, a figure that will probably increase under the new tax relief law,” Saxton
        concluded.

                                      Shares of Individual Income Tax Payments by Income Class
                                                  Before and After Tax Reduction (%)
                      50%
                                      Before
                                                                                                                                    44.8%45.4%

                                      After
                      40%



                      30%                                                                                            27.6% 27.9%




                      20%


                                                                                          11.6%11.7%   12.1% 12.0%

                      10%

                                                                            3.7% 3.6%
                                                       2.1% 1.9%

                       0%
                                  -2.0%-2.6%


                     -10%
                                     0-30                30-40               40-50         50-75        75-100       100-200       200 & Over
                      Source: Department of the Treasury, Office of Tax Analysis     Income Class, Thous $



              For more information on taxation, please visit our website at www.house.gov/jec.
                                                              ###


1537 Longworth House Office Building                 • Washington, DC 20515 • (202) 226-3234 Fax (202) 226-3950 • www.house.gov/jec/

								
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