|
Citizens for Tax JusticeFor release on June 27, 1997 |
Citizens for Tax Justice has released a detailed distributional analysis of the effects of the tax cut plan approved by the House of Representatives by a 235-197 vote on June 26, 1997. Among the analysis's key findings:
The average tax cut for the top 1% of taxpayers would be $24,294 a year. Tax reductions especially targeted to the well-off include the proposed reductions in capital gains taxes, estate taxes and corporate income taxes.
Taxpayers in the bottom 40% of the income scale would receive no benefit from the proposed tax cuts.
The plan would cost far more than advertised, with costs growing especially rapidly in years past the "budget window." Although billed as an $85 billion net tax cut over five years, the plan actually will cost more than $70 billion annually (in 1997 dollars) once it is fully phased in. As a result, the plan threatens to bust the budget not only in fiscal 2002 but to an ever-increasing extent in later years.
CTJ's analysis of the Archer plan was conducted using the Institute on Taxation and Economic Policy's Microsimulation Tax Model. The ITEP Model, based on a very large sample of tax returns, census data and other data, is similar to the tax models used by the congressional Joint Committee on Taxation and the Treasury Department. The methodological approach used in the ITEP model is very similar to the methodology outlined in the Joint Committee on Taxation's "Methodology and Issues in Measuring Changes in the Distribution of Tax Burdens," 1993. Average Tax Cuts by Income Level
Brief Description of and Comments on the Major Provisions of the House Tax Plan
Back To Reports
