Friday, May 30, 2008
Tweet[IWS] CRS: STATUTORY INDIVIDUAL INCOME TAX RATES & OTHER ELEMENTS OF THE TAX SYSTEM: 1988 through 2008 [21 May 2008]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
Order Code RL34498
Statutory Individual Income Tax Rates and Other Elements of the Tax System: 1988 through 2008
May 21, 2008
Maxim Shvedov, Analyst in Public Sector Economics, Government and Finance Division
http://assets.opencrs.com/rpts/RL34498_20080521.pdf
[full-text, 45 pages]
Summary
Statutory individual income tax rates, also referred to as "statutory marginal tax
rates," are the rates of tax applicable to the last (marginal) increment of taxable
income. Statutory rates play an important role in determining the real marginal tax
rates, which affect taxpayers' economic behavior.
Developments since enactment of the Tax Reform Act of 1986 (TRA86; P.L.
99-514) are the most relevant to the current state of affairs. Since then, the Omnibus
Budget Reconciliation Act of 1990 (OBRA90; P.L. 101-508), the Omnibus Budget
Reconciliation Act of 1993 (OBRA93; P.L. 103-66), and the Economic Growth and
Tax Relief Reconciliation Act of 2001 (EGTRRA; P.L. 107-16) and its extensions
all changed the marginal income tax rate structure. Under current law, upon
expiration of tax cuts enacted in 2001-2007, the rate structure will revert in 2011 to
the one set by OBRA93.
The six marginal income tax rates for 2008 are 10%, 15%, 25%, 28%, 33%, and
35%. Specific types of income, such as capital gains, may be subject to different sets
of marginal tax rates. Alternative minimum tax system (AMT), a parallel tax system
which has recently garnered considerable attention, also has a different set of
parameters.
Since 1981, Congress established and expanded, with slight modifications, the
policy of tax indexation. Tax indexation helps prevent automatic tax increases and
unintended changes in the distribution of the tax burden due to inflation. Under
current law, many key components of the tax structure are indexed for inflation.
Such components include the tax rate brackets, the personal exemptions and their
phase-out thresholds, standard deductions, the itemized deduction limitation
threshold, and others. Not all elements of the tax system, however, are currently
adjusted for inflation. One of the examples is the AMT.
This report summarizes information about the tax brackets and other key
elements of the tax system that determine taxpayer's statutory marginal tax rate.
Such elements include tax brackets, exemptions, standard deductions, etc. This
report, originally written by Gregg A. Esenwein, now retired, is updated annually to
reflect the most recent indexation adjustments and statutory changes.
Contents
Various Concepts of Tax Rates and Distinctions Among Them . . . . . . . . . . . . . . 1
Major Legislation Affecting the Statutory Rates . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Tax Reform Act of 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Omnibus Budget Reconciliation Act of 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Omnibus Budget Reconciliation Act of 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Economic Growth and Tax Relief Reconciliation Act of 2001 . . . . . . . . . . . . . . . 6
Jobs and Growth Tax Relief Reconciliation Act of 2003 and the
Working Families Tax Relief Act of 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Effects of Inflation on Income Tax Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
The Mechanics of Indexation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Tax Rate Schedules for 1988 Through 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
List of Tables
Table 1. Phase-in and Expiration of Select Provisions Under EGTRRA and Follow-up Acts . . . . . . . . . 8
Table 2. Indexed Elements of the Individual Income Tax System . . . . . . . . . . . 12
Table 3. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1988 . . . . . . . . 13
Table 4. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1989 . . . . . . . . . . . . 14
Table 5. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1990 . . . . . . . . . . . 15
Table 6. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1991 . . . .. . . . . 16
Table 7. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1992 . . . . . . . . . . 17
Table 8. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1993 . . . . . . . . . . 18
Table 9. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1994 . . . . . . . . . . . . 19
Table 10. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1995 . . . . . . . . . . . . . . . 20
Table 11. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1996 . . . .. . . . . . . . 21
Table 12. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1997 . . . . . . . . . . 22
Table 13. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1998 . . . . . . . . . . . . 23
Table 14. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1999 . . . . . . . . . .. . . . 24
Table 15. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 2000 . . . . . . . . . . . . . . . 25
Table 16. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 2001 . . . . . . . . . . . . . 26
Table 17. Personal Exemptions and Standard Deductions, 2002 . . . . . . . . . . . . 27
Table 18. Statutory Marginal Tax Rates, 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Table 19. Statutory Marginal Tax Rates, 2003 Under Prior Law . . . . . . . . . . . . 29
Table 20. Personal Exemptions and Standard Deductions, Limitation on Itemized Deductions, and the Personal Exemption Phase-out, 2003 . . . . . . 30
Table 21. Statutory Marginal Income Tax Rates, 2003 . . . . . . . . . . . . . . . . . . . 31
Table 22. Personal Exemptions and Standard Deductions, Limitation on Itemized Deductions, and the Personal Exemption Phase-out, 2004 . . . . . . 32
Table 23. Statutory Marginal Income Tax Rates, 2004 . . . . . . . . . . . . . . . . . . . 33
Table 24. Personal Exemptions, Standard Deductions, Limitation on Itemized Deductions and the Personal Exemption Phase-out Thresholds, 2005 . . . . . . 34
Table 25. Statutory Marginal Income Tax Rates, 2005 . . . . . . . . . . . . . . . . . . . 35
Table 26. Personal Exemptions, Standard Deductions, Limitation on Itemized Deductions and the Personal Exemption Phase-out Thresholds, 2006 . . . . . . . 36
Table 27. Statutory Marginal Income Tax Rates, 2006 . . . . . . . . . . . . . . . . . . . 37
Table 28. Personal Exemptions, Standard Deductions, Limitation on Itemized Deductions and the Personal Exemption Phase-out Thresholds, 2007 . . . . . . . . . 38
Table 29. Statutory Marginal Income Tax Rates, 2007 . . . . . . . . . . . . . . . . . . . 39
Table 30. Personal Exemptions, Standard Deductions, Limitation on Itemized Deductions and the Personal Exemption Phase-out Thresholds, 2008 . . . . 40
Table 31. Statutory Marginal Income Tax Rates, 2008 . .
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
Order Code RL34498
Statutory Individual Income Tax Rates and Other Elements of the Tax System: 1988 through 2008
May 21, 2008
Maxim Shvedov, Analyst in Public Sector Economics, Government and Finance Division
http://assets.opencrs.com/rpts/RL34498_20080521.pdf
[full-text, 45 pages]
Summary
Statutory individual income tax rates, also referred to as "statutory marginal tax
rates," are the rates of tax applicable to the last (marginal) increment of taxable
income. Statutory rates play an important role in determining the real marginal tax
rates, which affect taxpayers' economic behavior.
Developments since enactment of the Tax Reform Act of 1986 (TRA86; P.L.
99-514) are the most relevant to the current state of affairs. Since then, the Omnibus
Budget Reconciliation Act of 1990 (OBRA90; P.L. 101-508), the Omnibus Budget
Reconciliation Act of 1993 (OBRA93; P.L. 103-66), and the Economic Growth and
Tax Relief Reconciliation Act of 2001 (EGTRRA; P.L. 107-16) and its extensions
all changed the marginal income tax rate structure. Under current law, upon
expiration of tax cuts enacted in 2001-2007, the rate structure will revert in 2011 to
the one set by OBRA93.
The six marginal income tax rates for 2008 are 10%, 15%, 25%, 28%, 33%, and
35%. Specific types of income, such as capital gains, may be subject to different sets
of marginal tax rates. Alternative minimum tax system (AMT), a parallel tax system
which has recently garnered considerable attention, also has a different set of
parameters.
Since 1981, Congress established and expanded, with slight modifications, the
policy of tax indexation. Tax indexation helps prevent automatic tax increases and
unintended changes in the distribution of the tax burden due to inflation. Under
current law, many key components of the tax structure are indexed for inflation.
Such components include the tax rate brackets, the personal exemptions and their
phase-out thresholds, standard deductions, the itemized deduction limitation
threshold, and others. Not all elements of the tax system, however, are currently
adjusted for inflation. One of the examples is the AMT.
This report summarizes information about the tax brackets and other key
elements of the tax system that determine taxpayer's statutory marginal tax rate.
Such elements include tax brackets, exemptions, standard deductions, etc. This
report, originally written by Gregg A. Esenwein, now retired, is updated annually to
reflect the most recent indexation adjustments and statutory changes.
Contents
Various Concepts of Tax Rates and Distinctions Among Them . . . . . . . . . . . . . . 1
Major Legislation Affecting the Statutory Rates . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Tax Reform Act of 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Omnibus Budget Reconciliation Act of 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Omnibus Budget Reconciliation Act of 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Economic Growth and Tax Relief Reconciliation Act of 2001 . . . . . . . . . . . . . . . 6
Jobs and Growth Tax Relief Reconciliation Act of 2003 and the
Working Families Tax Relief Act of 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Effects of Inflation on Income Tax Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
The Mechanics of Indexation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Tax Rate Schedules for 1988 Through 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
List of Tables
Table 1. Phase-in and Expiration of Select Provisions Under EGTRRA and Follow-up Acts . . . . . . . . . 8
Table 2. Indexed Elements of the Individual Income Tax System . . . . . . . . . . . 12
Table 3. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1988 . . . . . . . . 13
Table 4. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1989 . . . . . . . . . . . . 14
Table 5. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1990 . . . . . . . . . . . 15
Table 6. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1991 . . . .. . . . . 16
Table 7. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1992 . . . . . . . . . . 17
Table 8. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1993 . . . . . . . . . . 18
Table 9. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1994 . . . . . . . . . . . . 19
Table 10. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1995 . . . . . . . . . . . . . . . 20
Table 11. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1996 . . . .. . . . . . . . 21
Table 12. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1997 . . . . . . . . . . 22
Table 13. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1998 . . . . . . . . . . . . 23
Table 14. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1999 . . . . . . . . . .. . . . 24
Table 15. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 2000 . . . . . . . . . . . . . . . 25
Table 16. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 2001 . . . . . . . . . . . . . 26
Table 17. Personal Exemptions and Standard Deductions, 2002 . . . . . . . . . . . . 27
Table 18. Statutory Marginal Tax Rates, 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Table 19. Statutory Marginal Tax Rates, 2003 Under Prior Law . . . . . . . . . . . . 29
Table 20. Personal Exemptions and Standard Deductions, Limitation on Itemized Deductions, and the Personal Exemption Phase-out, 2003 . . . . . . 30
Table 21. Statutory Marginal Income Tax Rates, 2003 . . . . . . . . . . . . . . . . . . . 31
Table 22. Personal Exemptions and Standard Deductions, Limitation on Itemized Deductions, and the Personal Exemption Phase-out, 2004 . . . . . . 32
Table 23. Statutory Marginal Income Tax Rates, 2004 . . . . . . . . . . . . . . . . . . . 33
Table 24. Personal Exemptions, Standard Deductions, Limitation on Itemized Deductions and the Personal Exemption Phase-out Thresholds, 2005 . . . . . . 34
Table 25. Statutory Marginal Income Tax Rates, 2005 . . . . . . . . . . . . . . . . . . . 35
Table 26. Personal Exemptions, Standard Deductions, Limitation on Itemized Deductions and the Personal Exemption Phase-out Thresholds, 2006 . . . . . . . 36
Table 27. Statutory Marginal Income Tax Rates, 2006 . . . . . . . . . . . . . . . . . . . 37
Table 28. Personal Exemptions, Standard Deductions, Limitation on Itemized Deductions and the Personal Exemption Phase-out Thresholds, 2007 . . . . . . . . . 38
Table 29. Statutory Marginal Income Tax Rates, 2007 . . . . . . . . . . . . . . . . . . . 39
Table 30. Personal Exemptions, Standard Deductions, Limitation on Itemized Deductions and the Personal Exemption Phase-out Thresholds, 2008 . . . . 40
Table 31. Statutory Marginal Income Tax Rates, 2008 . .
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
# posted by SBasefsky : 10:33 AM
