Income taxes will rise.
Which income tax provisions will change?
- The 10 percent tax bracket will disappear and the 25 percent, 28, percent, 33 percent, and 35 percent rates will revert to 28 percent, 31 percent, 36 percent, and 39.6 percent respectively.
- The phaseout of personal exemptions and limit on itemized deductions will return for high-income taxpayers.
- The standard deduction and the width of the 15 percent tax bracket for married couples filing jointly will both shrink from twice that for single filers to 1.67 times as large.
- Dividends will be taxed at regular tax rates rather than at the lower long-term capital gains rates.
- Long-term capital gains tax rates will increase from 0 percent to 10 percent for taxpayers in the 15 percent bracket and below and from 15 percent to 20 percent for filers in higher tax brackets.
- The child credit will be halved to $500 and become largely non-refundable.
- The child and dependent care credit and the earned income credit will be pared back.
How will the income tax changes affect revenues?
| Revenue Estimates for Extending Some or All of the 2001 and 2003 Tax Cuts |
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What would the distributional effects be?
| 2011 Distributional Tables for Expiration of 2001-2003 tax cuts |
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| Tax brackets, standard deduction, and personal exemptions under alternative policies |
| Separate Rate Tables for Each Policy |
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| Comparison of Rates for Three Policies |
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