FROM THE OFFICE OF PUBLIC AFFAIRS

The Congressional Joint Committee on Taxation (JCT) released on May 4 tables showing their estimates of the distributional effect of the President's tax relief proposal (JCX-32-01). The tables show the effect of the major individual income tax provisions in the President's proposal in each year, 2002 through 2006. These provisions are fully in effect by 2006.

The JCT table for 2006, when the President's proposal is fully effective, shows that the percentage tax cuts will be largest for taxpayers with incomes under $50,000.

While all income groups receive a tax cut under the President's proposal, taxpayers with incomes of $100,000 or more will pay a larger share of the tax burden than they do under current law. The share of tax relief provided to these taxpayers is smaller than their share of current taxes paid.

The Treasury Department released a distributional analysis of the President's proposal on March 8, 2001. The Treasury Department analysis showed that the share of individual income taxes paid by taxpayers with income over $100,000 would increase from 70 cents of every dollar in individual income taxes paid under current law to 74 cents of every dollar under the President's proposal.

"This analysis confirms, yet again, the President's plan provides significant relief to low and middle income taxpayers," stated Treasury Secretary Paul O'Neill.