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March 19, 2013
Tax Policy Center Says Ryan Budget Would Require $5.7 Trillion in Offsets

Full Text Published by Tax Analysts®


Citations: T13-0110; T13-0111; T13-0112

The budget proposed by House Budget Committee Chair Paul Ryan, R-Wis., would reduce revenue by $5.7 trillion through 2023, a gap that taxwriters would need to fill if they were to maintain revenue neutrality as Ryan intends.

Ryan's budget calls on Congress to reduce individual and corporate taxes, repeal the alternative minimum tax, and eliminate some healthcare-related taxes. It does not identify how those changes would be offset.

The specified changes, taken alone without considering the offsetting revenue raisers, would deliver the largest benefits to earners at the top end of the income spectrum, the Tax Policy Center said in the release.

March 15 2013 -- The Tax Policy Center has released three tables examining the revenue and distributional effects of the tax components of the House budget plan presented by Paul Ryan (R-WI) this week.

TPC estimates that the specified provisions of the budget's tax plan -- setting individual tax rates at 10% and 25%, cutting the corporate tax rate from 35% to 25%, and repealing the AMT and Obamacare taxes -- would reduce revenues by $ 5.7 trillion over the 2014 -2023 period. That is the amount of revenue that base-broadening and other changes to the tax code would have to collect to make the entire plan revenue neutral. Additionally:

  • Tax savings from the specified provisions would disproportionately benefit higher-income households. Overall, taxes would fall by an average of $3,000 per tax unit in 2015, raising after-tax incomes by about 5%.
  • Households in the middle quintile would save an average of about $900, lifting their after-tax income not quite 2%.
  • Households in the lowest quintile would get tax cuts averaging just $40, about 0.3% of their after- tax income.
  • Households in the top quintile would get average tax cuts of more than $16,000, increasing their after-tax income by more than 8%.
  • Households in the top 1% -- those with income over about $575,000 -- would see their taxes fall an average of more than $225,000 and their after-tax income rise by 17%.
Table T13-0110
FY2014 House Budget Proposal (Without Unspecified Revenue Raisers)
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income Level, 20151
Summary Table

[Editor's Note: For a larger, searchable version of the table, see
2013-6235-1.pdf0.pdf, page 2.]



Table T13-0110
FY2014 House Budget Proposal (Without Unspecified Revenue Raisers)
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income Level, 20151
Detail Table

[Editor's Note: For a larger, searchable version of the table, see
2013-6235-2.pdf, page 3.]



_________________________

Table T13-0110
FY2014 House Budget Proposal (Without Unspecified Revenue Raisers)
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income Level, 20151
Detail Table -- Single Tax Units

[Editor's Note: For a larger, searchable version of the table, see
2013-6235-3.pdf, page 4.]



_________________________

Table T13-0110
FY2014 House Budget Proposal (Without Unspecified Revenue Raisers)
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income Level, 20151
Detail Table -- Married Tax Units Filing Jointly

[Editor's Note: For a larger, searchable version of the table, see
2013-6235-4.pdf, page 5.]



_________________________

Table T13-0110
FY2014 House Budget Proposal (Without Unspecified Revenue Raisers)
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income Level, 20151
Detail Table -- Head of Household Tax Units

[Editor's Note: For a larger, searchable version of the table, see
2013-6235-2.pdf, page 6.]



_________________________

Table T13-0110
FY2014 House Budget Proposal (Without Unspecified Revenue Raisers)
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income Level, 20151
Detail Table -- Tax Units with Children

[Editor's Note: For a larger, searchable version of the table, see
2013-6235-2.pdf, page 7.]



_________________________

Table T13-0110
FY2014 House Budget Proposal (Without Unspecified Revenue Raisers)
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income Level, 20151
Detail Table -- Elderly Tax Units

[Editor's Note: For a larger, searchable version of the table, see
2013-6235-2.pdf, page 8.]



_________________________

Table T13-0111
FY2014 House Budget Proposal (Without Unspecified Revenue Raisers)
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income Percentile, 20151
Summary Table

[Editor's Note: For a larger, searchable version of the table, see
2013-6235-2.pdf, page 9.]



_________________________

Table T13-0111
FY2014 House Budget Proposal (Without Unspecified Revenue Raisers)
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income Percentile, 20151
Detail Table

[Editor's Note: For a larger, searchable version of the table, see
2013-6235-2.pdf, page 10.]



_________________________

Table T13-0111
FY2014 House Budget Proposal (Without Unspecified Revenue Raisers)
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income
Percentile Adjusted for Family Size, 20151
Detail Table

[Editor's Note: For a larger, searchable version of the table, see
2013-6235-2.pdf, page 11.]



_________________________

Table T13-0111
FY2014 House Budget Proposal (Without Unspecified Revenue Raisers)
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income
Percentile Adjusted for Family Size, 20151
Detail Table -- Single Tax Units

[Editor's Note: For a larger, searchable version of the table, see
2013-6235-2.pdf, page 12.]



_________________________

Table T13-0111
FY2014 House Budget Proposal (Without Unspecified Revenue Raisers)
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income
Percentile Adjusted for Family Size, 20151
Detail Table -- Married Tax Units Filing Jointly

[Editor's Note: For a larger, searchable version of the table, see
2013-6235-2.pdf, page 13.]



_________________________

Table T13-0111
FY2014 House Budget Proposal (Without Unspecified Revenue Raisers)
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income
Percentile Adjusted for Family Size, 20151
Detail Table -- Head of Household Tax Units

[Editor's Note: For a larger, searchable version of the table, see
2013-6235-2.pdf, page 14.]



_________________________

Table T13-0111
FY2014 House Budget Proposal (Without Unspecified Revenue Raisers)
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income
Percentile Adjusted for Family Size, 20151
Detail Table -- Tax Units with Children

[Editor's Note: For a larger, searchable version of the table, see
2013-6235-2.pdf, page 15.]



_________________________

Table T13-0111
FY2014 House Budget Proposal (Without Unspecified Revenue Raisers)
Baseline: Current Law
Distribution of Federal Tax Change by Cash Income
Percentile Adjusted for Family Size, 20151
Detail Table -- Elderly Tax Units

[Editor's Note: For a larger, searchable version of the table, see
2013-6235-2.pdf, page 16.]



_________________________

T13-0112
FY2014 House Budget Proposal (Without Unspecified Revenue Raisers)
Impact on Tax Revenue (billions of current dollars), 2014-20231
Baseline: Current Law

[Editor's Note: For a larger, searchable version of the table, see
2013-6235-2.pdf, page 17.]



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