Table F-1 Description and Impact of Revenue Sources-Continued • Growth potential is classified as follows: "low" means less than 5 percent per year; "moderate" means 5 percent to 10 percent per year; "high" means more than 10 percent per year. ⚫ The designation as "comprehensive" in this instance does not mean that everyone pays; rather, no single group is excluded by any characteristic other than income. <Estimates extrapolated from other published sources. * Growth potential could be increased by making taxes a percent of revenues (an ad valorem tax) rather than flat dollar amounts. ⚫ These estimates are not from the Joint Tax Committee but are rather based on simple projections of hospital and health insurance revenues. 'Since estate taxes are imposed on the estates of deceased persons, and remaining amounts are distributed to the decedent's heirs, and since few data are available concerning the incomes of heirs, no consensus exists among analysts about how to assess the progressivity of estate taxes. SOURCE: Unless otherwise noted, Joint Tax Committee, February 1990. Revenue estimates reflect 1993 amounts, to allow taxes to be fully phased in, and are expressed in 1990 dollars to enhance comparability with cost figures. Percent of Income Figure F-1-Option 1: Impact on Taxpayer, by Income Class* *NOTES: Some $5.1 billion, or 6.9 percent of the total revenue raised, is unallocated in the distribution but is allocated to the totals. Distribution is presented without assuming behavioral response to changes in capital gains treatment. "Income" in these tables is calculated as adjusted gross income increased by untaxed social security and pension benefits plus IRA and KEOUGH deductions, plus AFDC and SSI benefits. This income measure is calculated using current income; some analysts argue that a better measure is income over a lifetime or "permanent" income. The distributional analysis of VAT using a permanent income classifier would produce generally less regressive results. Both the employer and employee portions of the payroll tax are, net of income tax offsets, attributed to the employee. Some analysts would not distribute all of the employer portion of the tax in this way, producing somewhat less regressive results. Consistent with Joint Tax Committee presentation, dependent tax filers are not included in the distributional materials. Returns with income less than zero are also excluded. SOURCE: Price Waterhouse |