Whenever policymakers consider major changes to the tax code, such as whether to extend Tax Cuts and Jobs Act (TCJA) provisions scheduled to expire at the end of 2025, groups such as the Tax Policy Center (TPC) use models to produce estimates of how changes will affect different groups of people depending on their income, whether or not they have kids living at home, their age, and other factors. 

A typical TPC distribution table reports these estimates and includes several different measures of impact. For example, this distribution table from March 27, 2025, (Table 25-0033) shows the change in the distribution of federal taxes if certain TCJA provisions became permanent. It presents the share of the tax cut received, dollar amount of tax cuts, and percent change in after-tax income.

• Share of the tax cut received, or “share of total federal tax change,” is the proportion of a total tax reduction that goes to different income groups. The table shows the top quintile (the top 20 percent of earners, or those making $217,100 or more annually) would receive 65.3 percent of the tax cut, while the lowest quintile (the bottom 20 percent of earners, or those making $34,600 or less annually) would receive 1.5 percent of the tax cut.
• Dollar amount of tax cuts, a measure of “average federal tax change,” is the projected reduction in taxes paid by a household in an income group in monetary terms. The table shows the bottom quintile of earners would receive an average tax cut of $120, while the top quintile of earners would receive an average tax cut of $10,230.
• Percent change in after-tax income shows the difference in the amount of money a household has left after paying taxes. Table 25-0033 shows the lowest quintile of earners would receive a 0.6 percent increase in after-tax income. The top quintile of earners would receive a 2.8 percent increase in their after-tax income.

Another measure of “average federal tax change,” or percentage change in tax liability, is available from the table’s source data, in its “detail” spreadsheet. It shows the change in taxes a household owes as a share of its original tax liability. Under this proposal, the bottom quintile would see an 11.9 percent decrease in their tax liability, while the top quintile would see a 7.4 percent decrease. 

Which measure should you use if you want to compare how much different taxpayers gain or lose from a tax change? While percentage change in tax liability is an interesting metric, it does not show how the proposal affects the amount of money a household can spend or save after a tax change. TPC, therefore, prefers the third measure, the percentage change in after-tax income. 

To learn more, read detailed discussions of how TPC measures the distribution of tax changes and its rationale.