Since 2001 Congress has passed a major tax bill almost every year. The 2001-2006 tax cuts total approximately $2 trillion over ten years, and that total may be vastly understated if some or all of the tax cuts are extended beyond their scheduled expiration at the end of 2010. The long-term effect of the 2001-2006 tax cuts on the distribution of income will depend on how they are paid for, but their immediate effect has been skewed in favor of those with high incomes. This review presents a brief summary of the major provisions of the tax cuts, traditional distribution tables for the tax cuts by cash income class and cash income percentile, the distribution of tax units by the size of tax cuts and individual characteristics, and distribution tables for the tax cuts by cash income class and cash income percentile for three different illustrative financing options.
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