Order Code RL34498
Statutory Individual Income Tax Rates and Other Key
Elements of the Individual Income Tax: 1988
To 2013
Gary Guenther
Analyst in Public Finance
February 1, 2013
Congressional Research Service
7-5700
www.crs.gov
RL34498
CRS Report for Congress
Prepared for Members and Committees of Congress
Elements of the Tax System: 1988 through 2009
Updated October 22, 2008
Maxim Shvedov
Analyst in Public Sector Economics
Government and Finance Division
Statutory Individual Income Tax Rates and Other
Elements of the Tax System: 1988 through 2009
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 effective (or real,
depending on the naming convention) 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 through 2008, the rate structure will revert in
2011 to the one set by OBRA93.
The six marginal income tax rates for 2009 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. The 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 taxpayers’ statutory marginal tax rates.
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Tax Rate Schedules for 1988 Through 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
List of Tables
Table 1. Phase-in and Expiration of Select Provisions
Under EGTRRA and Subsequent Legislation . . . . . . . . . . . . . . . . . . . . . . . . 8
Table 2. Indexed Elements of the Individual Income Tax System . . . . . . . . . . . 11
Table 3. Personal Exemptions, Standard Deductions,
and Statutory Tax Rates, 1988 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Table 4. Personal Exemptions, Standard Deductions,
and Statutory Tax Rates, 1989 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Table 5. Personal Exemptions, Standard Deductions,
and Statutory Tax Rates, 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Table 6. Personal Exemptions, Standard Deductions,
and Statutory Tax Rates, 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Table 7. Personal Exemptions, Standard Deductions,
and Statutory Tax Rates, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Table 8. Personal Exemptions, Standard Deductions,
and Statutory Tax Rates, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Table 9. Personal Exemptions, Standard Deductions,
and Statutory Tax Rates, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Table 10. Personal Exemptions, Standard Deductions,
and Statutory Tax Rates, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Table 11. Personal Exemptions, Standard Deductions,
and Statutory Tax Rates, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Table 12. Personal Exemptions, Standard Deductions,
and Statutory Tax Rates, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Table 13. Personal Exemptions, Standard Deductions,
and Statutory Tax Rates, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Table 14. Personal Exemptions, Standard Deductions,
and Statutory Tax Rates, 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Table 15. Personal Exemptions, Standard Deductions,
and Statutory Tax Rates, 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Table 16. Personal Exemptions, Standard Deductions,
and Statutory Tax Rates, 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Table 17. Personal Exemptions and Standard Deductions, 2002 . . . . . . . . . . . . 28
Table 18. Statutory Marginal Tax Rates, 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Table 19. Statutory Marginal Tax Rates, 2003 Under Prior Law . . . . . . . . . . . . 30
Table 20. Personal Exemptions and Standard Deductions, Limitation
on Itemized Deductions, and the Personal Exemption Phase-out, 2003 . . . 31
Table 21. Statutory Marginal Income Tax Rates, 2003 . . . . . . . . . . . . . . . . . . . 32
Table 22. Personal Exemptions and Standard Deductions, Limitation
on Itemized Deductions, and the Personal Exemption Phase-out, 2004 . . . 33
Table 23. Statutory Marginal Income Tax Rates, 2004 . . . . . . . . . . . . . . . . . . . 34
Table 24. Personal Exemptions, Standard Deductions,
Limitation on Itemized Deductions and the
Personal Exemption Phase-out Thresholds, 2005 . . . . . . . . . . . . . . . . . . . . 35
Table 25. Statutory Marginal Income Tax Rates, 2005 . . . . . . . . . . . . . . . . . . . 36
Table 26. Personal Exemptions, Standard Deductions,
Limitation on Itemized Deductions and the
Personal Exemption Phase-out Thresholds, 2006 . . . . . . . . . . . . . . . . . . . . 37
Table 27. Statutory Marginal Income Tax Rates, 2006 . . . . . . . . . . . . . . . . . . . 38
Table 28. Personal Exemptions, Standard Deductions,
Limitation on Itemized Deductions and the
Personal Exemption Phase-out Thresholds, 2007 . . . . . . . . . . . . . . . . . . . . 39
Table 29. Statutory Marginal Income Tax Rates, 2007 . . . . . . . . . . . . . . . . . . . 40
Table 30. Personal Exemptions, Standard Deductions,
Limitation on Itemized Deductions and the
Personal Exemption Phase-out Thresholds, 2008 . . . . . . . . . . . . . . . . . . . . 41
Table 31. Statutory Marginal Income Tax Rates, 2008 . . . . . . . . . . . . . . . . . . . 42
Table 32. Personal Exemptions, Standard Deductions,
Limitation on Itemized Deductions and the
Personal Exemption Phase-out Thresholds, 2009 . . . . . . . . . . . . . . . . . . . . 43
Table 33. Statutory Marginal Income Tax Rates, 2009 . . . . . . . . . . . . . . . . . . . 44
Statutory Individual Income Tax Rates and
Other Elements of the Tax System: 1988
through 2009
Various Concepts of Tax Rates and
Distinctions Among Them
Statutory individual income tax rates, also referred to as “statutory marginal tax
rates,” are the rates of tax prescribed by law that are applicable to the last (marginal)
increment of taxable income. For many policymakers and taxpayers the level of
statutory marginal tax rates is one of the most conspicuous features of the tax system.
It is important to distinguish between real (or, effective) and statutory rates.
While they sound confusingly similar, each designates a very different economic
concept. Statutory rates are simply the tax rates written into law for specified tiers
of taxable income. Real marginal tax rates are the rates that actually apply to the last
(marginal) increment of income.
Real and statutory marginal tax rates may diverge considerably for some
taxpayers, but in many cases they do coincide and in many others they are
interconnected.1 For example, some taxpayers facing 10% statutory rate, were
subject to real marginal rate in excess of 31%. At the same time, “most taxpayers
face effective marginal rates of 15 percent or less,”2 often coinciding or nearlycoinciding with the statutory rate. Some of the elements of the tax system that give
rise to the difference between the real and statutory rates include the earned income
tax credit (EITC) phase-ins and phase-outs,3 the alternative minimum tax (AMT),4
the phase-outs of personal exemptions and deductions,5 and other provisions.
1
For more information, see U.S. Congressional Budget Office, Effective Marginal Tax Rates
on Labor Income, Nov. 2005, available at [http://cbo.gov/ftpdocs/68xx/doc6854/
11-10-LaborTaxation.pdf].
2
Ibid., p. 1.
3
For more information see CRS Report RL31768, The Earned Income Tax Credit (EITC):
An Overview, by Christine Scott.
4
For more information see CRS Report RL30149, The Alternative Minimum Tax for
Individuals, by Steven Maguire.
5
For more details see CRS Report RS22464, The PEP and Pease Provisions of the Federal
Individual Income Tax, by Gregg A. Esenwein.
CRS-2
Economists believe that taxpayers change their behavior in response to effective
(real), not statutory, marginal tax rates. It means that when deciding, say, whether
to work more, taxpayers consider by how much their real after-tax income would
actually change as a result of this decision. The concept may be extended beyond
individual income tax to an overall tax, or even overall fiscal, system, which includes
other federal and sub-federal taxes and payments.6 This broader analysis, however,
goes beyond the scope of this report.
In contrast, average tax rates describe the total tax burden, but do not directly
affect individuals’ economic decision-making. Average tax rates express total tax
liability as a percentage of income. Unlike”marginal” variables, they do not reflect
how a taxpayer’s economic position change in response to his or her actions.
Major Legislation Affecting the Statutory Rates
Over the past decades, there have been several major changes in federal
individual statutory marginal income tax rates. The Tax Reform Act of 1986
(TRA86; P.L. 99-514) is a starting point from which the modern tax structure
evolved. TRA86, among other things, created a tax rate structure that consisted of
just two statutory individual income tax rates: 15% and 28%. However, TRA86 also
legislated a 5% surcharge on the taxable income of certain upper-income households,
which effectively created a third marginal tax rate of 33%.
The Omnibus Budget Reconciliation Act of 1990 (OBRA90; P.L. 101-508)
eliminated the 5-percent surcharge and created a marginal tax rate structure
consisting of three statutory marginal tax rates of 15%, 28%, and 31%. However,
OBRA90 also contained a provision limiting the amount of itemized deductions that
upper-income households could claim and a provision modifying the phase-out of the
tax benefits of personal exemptions for upper-income households. These provisions
increased effective marginal tax rates over the statutory marginal tax rates for
affected taxpayers.
The Omnibus Budget Reconciliation Act of 1993 (OBRA93; P.L. 103-66) added
two new marginal income tax brackets, at 36% and 39.6% rates, at the upper end of
the income scale. It also delayed indexation of the two new tax brackets for one year.
In addition, OBRA93 made permanent the limitation on itemized deductions and the
phase-out of the personal exemption.
The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA;
P.L. 107-16) created a new 10% marginal income tax bracket. It also reduced the top
four marginal tax rates to 25%, 28%, 33%, and 35% with the changes phased-in over
the period 2001 through 2006. Additional provisions of the act affected tax brackets
and limitations on personal exemptions and deductions for higher income taxpayers.
The Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA; P.L.
6
For an example of such analysis, see S. D. Holt and J. L. Romich, (2007), Marginal Tax
Rates Facing Low- and Moderate-Income Workers Who Participate in Means-Tested
Transfer Programs, National Tax Journal, vol. 60, no. 2, June 2007, p. 253.
CRS-3
108-27), and the Working Families Tax Relief Act of 2004 (WFTRA; P.L. 108-311)
accelerated and extended the tax rate reductions originally enacted under EGTRRA.7
Under current law, however, most of these changes are scheduled to expire at the end
of 2010.
The following sections of this report describe each of these major acts in more
detail.
Tax Reform Act of 1986
Among its many changes, the Tax Reform Act of 1986 (TRA86; P.L. 99-514)
instituted a rather simple marginal tax rate structure for tax years after 1987. It
consisted of two statutory tax rates: 15% and 28%. Table 3 shows the elements of
the 1988 tax structure. These rates applied to capital income as well as to labor
income. By comparison, in 1986, there had been 14 non-zero marginal tax brackets
and the top statutory marginal tax rate reached 50%.8
Although the TRA86 specified that there were only two statutory individual
marginal income tax rates, it also adopted a 5% surcharge on the taxable income of
certain upper-income households. This surcharge effectively created a third marginal
tax rate of 33% (28% statutory marginal tax rate plus 5% surcharge).
Because the surcharge was first phased in and then phased out as incomes
increased, marginal tax rates rose to 33% but then fell back to 28%, producing what
came to be known as the tax rate “bubble.” The surcharge was adopted so that the
TRA86 would not change the distribution of the income tax burden relative to its
distribution under pre-1986 tax law and would meet the revenue targets. The
surcharge allowed for characterization of the TRA86 as having only two statutory
marginal tax rates, while meeting these other goals.
The surcharge was designed to eliminate the tax benefits of the 15% tax bracket
and the tax benefits of the personal exemptions for upper-income households. For
joint returns in 1988, the phase-out of the 15% tax rate started when taxable income
exceeded $71,900 and ended when taxable income reached $149,250, and the phaseout of the exemptions followed from that point on. For single returns, the phase-out
of the 15% tax bracket occurred over the taxable income range of $47,050 to
$97,620. For heads of households, the phase-out occurred over the taxable income
range of $67,200 to $134,930. The phase-out of the exemptions followed the phaseout of the 15% tax bracket for all filing statuses, but the range of income over which
it occurred depended on the number of exemptions claimed by a taxpayer.
To demonstrate how the 5% surcharge worked to “phase out” the tax benefits
of the 15% tax bracket consider the following example based on joint returns for
7
For more details see CRS Report RL34425, Expiration and Extension of the Individual
Income Tax Cuts Enacted in 2001 Through 2007, by Maxim Shvedov.
8
For historical rates and brackets in 1986 and other years see Tax Policy Center, Tax Facts,
Individual Income Tax Brackets, 1945-2008, Excel file, at
[http://taxpolicycenter.org/taxfacts/Content/Excel/individual_rates.xls].
CRS-4
1988. The difference between taxing the first $29,750 of taxable income at 28%
instead of 15% was $3,867.50 (obtained as $29,750 multiplied by 13%, the
difference between 28% and 15%). Five percent of the difference between the upper
and lower phase-out limits was also $3,867.50 ($149,250 less $71,900 multiplied by
5%). Hence, assessing the 5% surcharge on taxable income between $78,400 and
$162,770 was equivalent to having taxed the first $32,450 of taxable income at 28%
rather than 15%.
A 5% surcharge was also used to phase out the tax benefits of the personal
exemption for upper-income households. In 1988, each personal exemption was
worth $1,950 and produced a tax savings for a household in the 28% marginal tax
rate bracket of $546 ($1,950 times 28%). To recapture this tax savings a 5%
surcharge was assessed against $10,920 of taxable income for each personal
exemption claimed. A 5% surcharge against this amount of taxable income increased
tax liability by $546 ($10,920 times 5%), which exactly offset the tax savings from
the personal exemption.
The phase-out of personal exemptions started immediately after the phase-out
of the 15% tax bracket and the phase-out of each exemption occurred sequentially.
This meant that the taxable income range over which the 5% surcharge offset
personal exemptions depended on the number of personal exemptions claimed on the
tax return. For example, on a joint return claiming two personal exemptions, the 5%
surcharge would apply to taxable income between $149,250 and $171,090 ($149,250
plus two times $10,920). On a joint return with four personal exemptions, the 5%
surcharge would apply to taxable income between $149,250 and $192,930 ($149,250
plus four times $10,920).
Omnibus Budget Reconciliation Act of 1990
The Omnibus Budget Reconciliation Act of 1990 (OBRA90; P.L. 101-508)
created a three-tiered statutory marginal income tax rate structure with rates of 15%,
28%, and 31%, effective in tax years beginning in 1991, as shown in Table 5.
OBRA90 eliminated the tax bubble created under TRA86, but replaced it with a
limitation on itemized deductions and a new approach to phasing out the tax benefits
of the personal exemption for upper-income households.
OBRA90 reintroduced a tax-rate differential on capital gains income. OBRA90
contained a provision which limited the tax on capital gains income to a maximum
of 28%. This provision was effective starting in tax year 1991. Under TRA86,
capital gains had been treated as ordinary income and taxed at regular rates of up to
33%.
The OBRA90 limitation on itemized deductions worked as follows. For tax
years starting in 1991, otherwise allowable deductions were reduced by 3% of the
amount by which a taxpayer’s adjusted gross income (AGI) exceeded $100,000 (or
$50,000 in the case of married couples filing separate returns). For example, in 1991,
if a taxpayer’s AGI was $110,000, then his otherwise allowable itemized deductions
would be reduced by $300 ($110,000 less $100,000 times 3%). This provision
effectively raised the marginal income tax rate of those taxpayers affected by
approximately one percentage point. A dollar of income in excess of $100,000 was
CRS-5
taxed as if it were $1.03, since in addition to the tax on an extra dollar of income, the
taxpayer lost tax deductions by giving up $0.03 of itemized deductions.
This limitation was scheduled to expire after tax year 1995 under OBRA90, but
was later extended. Allowable deductions for medical expenses, casualty and theft
losses, and investment interest were not subject to this limitation. For tax years after
1991, the $100,000 threshold was indexed for inflation.
The phase-out of the tax benefits of the personal exemption worked as follows.
Each personal exemption was phased out by a factor of 2% for each $2,500 (or
fraction thereof) by which a taxpayer’s AGI exceeded a given threshold amount. In
1991, the threshold amount for a joint return was $150,000; for a single return the
threshold was $100,000; and for heads of households the threshold was $125,000.
For example, in 1991, a joint household whose AGI was $183,000 would lose
28% of their total personal exemptions claimed. The AGI amount in excess of the
threshold in this instance would be $33,000, $183,000 AGI less $150,000 threshold
limit. The $33,000 excess divided by $2,500 would produce a factor of 13.2 which
when rounded up would equal 14. This figure is multiplied by 2% to arrive at the
final disallowance amount of 28%. Hence, if the family had claimed two personal
exemptions, which at $2,150 each would total $4,300, they would only be allowed
to deduct $3,096 ($4,300 total personal exemptions less the $1,204 disallowance,
which is 28% of the total).
For tax years after 1991, these income threshold amounts were indexed for
inflation. The personal exemptions phase-out provision was also scheduled to expire
after tax year 1995.
Omnibus Budget Reconciliation Act of 1993
The Omnibus Budget Reconciliation Act of 1993 (OBRA93; P.L. 103-66) made
several changes in the individual marginal income tax rate structure. First, it added
two new marginal tax rates, 36% and 39.6%, at the upper end of the income
spectrum. The 39.6% marginal tax rate bracket was created by imposing a “10%
surtax” on high-income taxpayers (39.6=36 + 3.6, which is 10% of 36).
Although OBRA93 was enacted in August of 1993, the increase in the top
marginal tax rates was made effective retroactively to January 1, 1993. Affected
taxpayers, however, were not assessed penalties for underpayment of 1993 taxes
resulting from the tax rate increase. Taxpayers were also allowed to pay any
additional 1993 taxes in three equal installments over a two-year period.
Second, OBRA93 delayed indexation of the new top marginal income tax
brackets for one year. Hence, the nominal dollar tax brackets for the 36% and 39.6%
marginal tax rates remained at the same level for both tax years 1993 and 1994.
Finally, OBRA93 made permanent both the itemized deduction limitation and
the phase-out of the tax benefits from personal exemptions.
CRS-6
Economic Growth and Tax Relief Reconciliation Act of 2001
The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA;
P.L. 107-16) made several major changes to the marginal tax rate structure. Many
of the act’s provisions were set to phase-in over a period of time, but subsequent
2003 and 2004 legislation, described in the next section, overrode the schedule
originally set by EGTRRA. Table 1 shows the time line of changes related to the
marginal tax rate structure enacted under EGTRRA and subsequent bills, discussed
below.
First, the 2001 Act created a new 10% bracket. It applied, beginning in tax year
2002, to the first $12,000 of taxable income for married couples filing jointly, the
first $10,000 of taxable income for heads of households, and the first $6,000 of
taxable income for single individuals. For tax year 2001, the act created a “rate
reduction tax credit,” mimicking the effects of the 10% tax rate bracket for most
taxpayers.9
In tax years 2003-2007, these provisions of EGTRRA were superseded by
subsequent legislation. In 2008, EGTRRA set the 10% marginal tax rate bracket at
$7,000 and $14,000 for single and married taxpayers, respectively. Starting with tax
year 2009, these bracket amounts are scheduled to be indexed for inflation.
Second, the 2001 Act gradually reduced the top four marginal income tax rates.
Under prior income tax law, the top four marginal tax rates were 28%, 31%, 36% and
39.6%. When fully phased in, the 2001 Act reduced the top four marginal income
tax rates to 25%, 28%, 33% and 35%. Under EGTRRA the reductions were
scheduled to take place in 2001 through 2006, but subsequent legislation accelerated
the EGTRRA phase-in schedule.
Third, EGTRRA also repealed the limitation on itemized deductions and
personal exemptions for high-income taxpayers. The repeal was scheduled to be
phased in between 2006 and 2009. The limitation was completely repealed for 2010,
but it would reappear again in 2011, once the EGTRRA’s tax cuts expire.
Fourth, some of the act’s measures designed to reduce the marriage penalty
affected the rate bracket structure. The act increased the width of the 15% tax
bracket for married couples filing joint returns to twice the width of the 15% tax
bracket for single returns. Under EGTRRA this provision was scheduled for phasein over a four-year time period starting in 2005, but subsequent legislation
accelerated this time line. Under EGTRRA, the end point of the 15% tax bracket for
joint returns was scheduled to be 180% of the end point of the 15% tax bracket for
single returns in 2005, 187% in 2006, 193% in 2007, and 200% in 2008 and
subsequent years.10
9
For more information see CRS Report RS21171, The Rate Reduction Tax Credit — ‘The
Tax Rebate’ — in the Economic Growth and Tax Relief Reconciliation Act of 2001: A Brief
Explanation, by Steven Maguire.
10
For more information on these changes see CRS Report RL34425, Expiration and
(continued...)
CRS-7
Finally, the 2001 Act increased the standard deduction for joint returns to twice
the size of the standard deduction for single returns. The change was scheduled to
be phased in over a five-year period, 2005 to 2009, but it was accelerated by the
subsequent bills as well. This had an effect, as far as tax rate brackets were
concerned, of raising the lower threshold of the lowest tax bracket for married
taxpayers filing joint returns.
Jobs and Growth Tax Relief Reconciliation Act of 2003 and
the Working Families Tax Relief Act of 2004
Among the several acts extending provisions in EGTRRA, the Jobs and Growth
Tax Relief Reconciliation Act of 2003 (JGTRRA; P.L. 108-27) and the Working
Families Tax Relief Act of 2004 (WFTRA; P.L. 108-311) directly affected statutory
income tax rates.
JGTRRA accelerated several changes to the individual income tax rate structure
first enacted under EGTRRA. It moved forward to 2003 the tax rate reductions,
expansion in the 10% tax bracket, and widening of the 15% tax bracket for joint
returns to twice the width of the 15% tax bracket for single returns. Under EGTRRA
some of these changes would not have been fully phased in until 2009.
WFTRA extended several tax provisions of the JGTRRA that were scheduled
to expire at the end of 2004. Among other things, the WFTRA extended the increase
in the 10% income tax bracket through 2007, at which point EGTRRA’s relevant
provisions were fully phased in, maintaining a constant level of the tax relief.
The 2004 act also extended marriage penalty relief through 2008. The standard
deduction and 15% tax bracket for joint returns were set at twice their level for single
returns. In 2009 and 2010, EGTRRA provisions apply, maintaining the same level
of tax relief.
Both acts also established a more preferential treatment of long-term capital
gains and dividends. They reduced the tax rates applicable to these kinds of income
to 15%, or even 0% for certain taxpayers.
10
(...continued)
Extension of the Individual Income Tax Cuts Enacted in 2001 Through 2007, by Maxim
Shvedov.
CRS-8
Table 1. Phase-in and Expiration of Select Provisions Under EGTRRA and Subsequent Legislation
Provision
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Tax Rates and Brackets
Create 10 percent tax
bracket
Reduce tax rates in top
four tax brackets
Reduce tax rates on
capital gains and
dividends
EGTRRA: $12,000 /
$6,000 brackets for
couples / singles.
JGTRRA: $14,000 /
$7,000 for couples /
singles. Index in 2004.
WFTRA: $14,000 / $7,000 for couples
/ singles.
EGTRRA: $14,000 / $7,000 for
couples / singles. Index in 2009.
Bracket
expires.
EGTRRA:
EGTRRA:
JGTRRA:
EGTRRA:
Reverts to:
39.1%
38.6%
35%
35%
39.6%
35.5%
35%
33%
33%
36%
30.5%
30%
28%
28%
31%
27.5%
27%
25%
25%
28%
No change.
JGTRRA: 15% or 5% rate depending on income.
JGTRRA:
15% / 0%
TIPRA: 15% / 0%
Up to 20%
or regular
tax rates.
Limits on Itemized Deductions and Personal Exemptions
Reduce or eliminate
limits on itemized
deductions and personal
exemptions
EGTRRA: Reduce limits
by one-third.
No change.
EGTRRA:
Repeal
limits.
Limits
reinstated.
EGTRRA: Deduction for
couples is 200% of the
deduction for singles.
Reverts to
167%.
EGTRRA: Reduce limits
by two-thirds.
Marriage Penalty Relief
Increase standard
deduction for married
couples
No change.
JGTRRA: Deduction for
couples is 200% of the
deduction for singles.
WFTRA: Deduction for couples is 200% of the
deduction for singles.
Expand 15 percent
JGTRRA: Top of the
WFTRA: Top of the bracket for
bracket for married
No change.
bracket for couples is
couples is 200% of that for singles.
couples
200% of that for singles.
Source: CRS adaptation of Congressional Budget Office and Joint Committee on Taxation tables and publications.
EGTRRA: Top of the bracket for
couples is 200% of that for singles.
Reverts to
167%.
Note: EGTRRA — Economic Growth and Tax Relief Reconciliation Act of 2001 (P.L. 107-16, 2001, introduced as H.R. 1836); JGTRRA — Jobs and Growth Tax Relief Reconciliation
Act of 2003 (P.L. 108-27, 2003, introduced as H.R. 2); WFTRA — Working Families Tax Relief Act of 2004 (P.L. 108-311, 2004, introduced as H.R. 1308); TIPRA — Tax Increase
Prevention and Reconciliation Act of 2005 (P.L. 109-222, 2006, introduced as H.R. 4297).
CRS-9
Effects of Inflation on Income Tax Liabilities
During periods of inflation, a progressive tax structure designated on a nominaldollar basis produces automatic tax increases and unintended changes in the
distribution of the tax burden. It occurs, because nominal incomes rise faster than the
real incomes, leading to a heavier tax burden imposed on taxpayers compared to what
lawmakers intended at the time of their policy considerations.
The federal individual income tax system in the United States is progressive.
That is, as incomes rise, income tax liabilities as a share of income also rise. In
addition, the income tax is calculated on the basis of current dollar amounts. Absent
periodic indexation of the tax system elements, a larger share of taxpayers would be
subject to higher tax liabilities, simply because their nominal income increased,
regardless of how their real income had changed.
The effects of inflation on income tax liabilities could be substantial even in
periods of low inflation, such as the last two decades. Still, according to the Bureau
of Labor Statistics, $1,000 in 1989 is worth about $1,707, or almost 71% more, in
2008.11 Year-to-year changes might appear negligible, but over a period of several
years, it compounds to make a substantial difference.
Consider a hypothetical example of what lack of indexation would have implied
for a taxpayer, if the 1989 tax structure applied without indexation in 2008. For
illustration consider a four-person family with adjusted gross income (AGI) of
$35,000 in 1989, a rounded up 1989 family median income of $34,213, according to
the Census.12 If we assume that the family used the standard deduction, then its
taxable income would have been $21,800 ($35,000 less standard deduction of $5,200
and four personal exemptions at $2,000 apiece), and the tax liability — $3,270. This
translates into an after-tax income of $31,730 ($35,000 less $3,270), or an average
tax rate of 9.3% ($3,270 divided by $35,000 income).
Now consider what would have happened in 2008 if this family’s nominal
income just kept up with inflation. The AGI would have been approximately
$60,000. If the tax structure were not indexed for inflation, the family’s taxable
income would have been $46,800. The tax liability would have increased to
approximately $9,081 in current 2008 dollars, or $5,319 in constant 1989 dollars
($9,081 adjusted for cumulative inflation of about 71%). This would represent a tax
liability increase of 63% in real terms. The family’s after-tax income would be
$50,919 in current 2008 dollars, or $29,826 in constant 1989 dollars ($50,919
adjusted for the cumulative inflation of about 71%), a decrease of 6%. Its average
tax rate would have increased from 9.3% to 15.1%.
11
12
BLS, CPI Inflation Calculator, web page, at [http://data.bls.gov/cgi-bin/cpicalc.pl].
U.S. Census, Historical Income Tables — Families, Table F-5. Race and Hispanic Origin
of Householder — Families by Median and Mean Income: 1947 to 2005, web page, at
[http://www.census.gov/hhes/www/income/histinc/f05.html].
CRS-10
This example illustrates how this family’s real after-tax income declined by 6%,
because of the so-called, “bracket creep.” Its income tax burden increased by 63%
in real terms between 1989 and 2008. This effect would be even more pronounced
in the periods of a high inflation.
Under an indexed tax system, the family would have experienced no change in
their real after-tax income. For instance, under an indexed system the value of the
standard deduction for a joint return would have increased from $5,200 in 1989 to
$8,877 in 2008. The personal exemption would have increased from $2,000 to
$3,414. Under these circumstances the family’s 2008 taxable income would have
been $37,465 ($60,000 income less standard deduction and personal exemptions).
Tax brackets would have adjusted as well. Based on this taxable income and the
adjusted brackets, their income tax liability would have been $5,620 in current 2008
dollars, or $3,291 in constant 1989 dollars — about the same as in 1989 (the
difference is due to rounding). In short, the nominal amounts might be different, but
real values would have stayed the same for this family.
Congress enacted income tax indexation as a part of an overall package of
statutory marginal tax rate reductions contained in the Economic Recovery Tax Act
of l981.
The Congress believed that “automatic” tax increases resulting from the effects
of inflation were unfair to taxpayers, since their tax burden as a percentage of
income could increase during intervals between tax reduction legislation, with
an adverse effect on incentives to work and invest. In addition, the Federal
Government was provided with an automatic increase in its aggregate revenue,
which in turn created pressure for further spending.13
There was very little debate about this aspect of the bill. The act specified
which elements of the tax system were subject to indexation. Over the years, as the
tax system changed, additional elements entered the list.
The list of the indexed elements of the tax system has been gradually expanding
over the years. For example, one of the most notable changes occurred with the
passage of the TRA86, which extended indexation to some of the newly created
elements of the tax system, such as the additional standard deductions for the elderly
and the blind, the EITC, and others. More recently, EGTRRA applied indexing to
the EITC phase-out amounts in 2008.
Table 2 lists major indexed tax items and provides the year of the first
adjustment.14 For some provisions the technicalities are too complex to be listed in
a table format. For example, as mentioned above, indexing of some elements of the
EITC started in 2008, while others have been indexed since the late 1980s.
13
U.S. Congress, Joint Committee on Taxation, General Explanation of the Economic
Recovery Tax Act of 1981, JCS-71-81, Dec. 31, 1981, as redistributed by CCH Internet Tax
Research NetWork.
14
James C. Young, “A Summary of 2007 Inflation Adjustments Impacting Individuals,” Tax
Notes, Oct. 15, 2007, p. 246.
CRS-11
Table 2. Indexed Elements of the Individual Income Tax System
Item
Standard deduction
Unearned income of minor child (base amount)
Exemptions
Educational savings bonds
Exemption phase-out
Itemized deduction limitation (3% of AGI)
Tax rate schedules:
10% bracket
15%/25%/28% brackets
33%/35% brackets
Earned income credit
Standard deduction for employed dependents
Medical savings accounts
Annual gift tax exclusion
Qualified transportation fringe benefits:
Categories 1 and 2
Category 3
HOPE, lifetime learning, and child tax credits
Education loan interest
Adoption expenses/credit
Traditional and Roth IRA income phase-outs
Section 179 expense amounts
Base Period
Adjustment
Is the 12First Occurs
Month
in Calendar
Period
Year
Ending
31-Aug-87
1989
31-Aug-87
1989
31-Aug-88
1990
31-Aug-89
1991
31-Aug-90
1992
31-Aug-90
1992
31-Aug-02
31-Aug-92
31-Aug-93
31-Aug-95
31-Aug-97
31-Aug-97
31-Aug-97
2004
1994
1995
1997
1999
1999
1999
31-Aug-01
31-Aug-98
31-Aug-00
31-Aug-01
31-Aug-01
31-Aug-05
31-Aug-06
2003
2000
2002
2003
2003
2007
2008
Source: James C. Young, “A Summary of 2007 Inflation Adjustments Impacting Individuals.”
Indexing might make the tax system somewhat more technically complex, but
this is a minor complication. The year-to-year changes in dollar amounts are usually
small, so taxpayers hardly ever face unexpected changes that might materially affect
them. On the revenue side, indexing results in lower government receipts.
Some elements of the tax system are not adjusted for inflation or are only
partially adjusted. For example, most of the amounts related to the child tax credit
are not adjusted for inflation, including the amount of the credit itself or phase-out
thresholds for higher-income taxpayers. The earned income floor used in calculating
the credit’s refundable amount is adjusted for inflation, however.15
In recent years, a problem caused by the lack of indexation of the alternative
minimum tax (AMT) parameters has garnered considerable attention of the
policymakers and the public, because of the fast-growing number of taxpayers that
could be affected by the AMT. The AMT is an alternative income tax system,
originally intended to affect only high-income taxpayers. AMT’s parameters are not
15
In 2008 the amount of the threshold was set by a special provision of the Emergency
Economic Stabilization Act of 2008 (P.L. 110-343), but this provision is effective only for
a single year.
CRS-12
adjusted for inflation. With the passage of time, as nominal incomes of taxpayers
rose across the board, the AMT affected a larger number of taxpayers at a broader
range of income levels. It is estimated that, absent congressional action, the number
of taxpayers subject to the AMT will increase from over 1 million in 2001 to about
26 million in 2008, and almost 36 million in 2017.16 In recent years, Congress has
adjusted AMT parameters to avoid this in a series of one-year adjustments, but at this
point it is not clear how this ongoing issue will be resolved in the long term.17
While the AMT is currently the most notable problem caused by the lack of
indexation, the AMT exemptions are not the only parameters in the tax system not
adjusted for inflation. Therefore it is conceivable that lack of indexation may pose
new complications in other areas of the tax system in the future.
The Mechanics of Indexation
Most provisions are indexed using the technical calculation described below.
The methodology is the same, although specific parameters may vary by provision.
In some instances, the calculation methodology differs somewhat in one way or
another. Such examples include the EITC or transportation benefits. The variations
are insignificant from an economic standpoint, as long as they do not result in
systematic deviations from the rate of inflation.
The adjustment for any given tax year is based on the percentage amount by
which the average Consumer Price Index for all urban consumers (CPI-U) for the 12month period ending on August 31 of the preceding year exceeds the average CPI-U
during a specified twelve month base period. The base period differs depending
upon the tax component under consideration, as listed in Table 2.
With the exception of the EITC and some other instances, inflation adjustments
are currently rounded down to the nearest multiple of $50. Although rounding down
affects the accuracy of any given year’s inflation adjustment, the effect is not
cumulative since each year’s adjustment is calculated to reflect the entire amount of
inflation that has occurred between the adjustment year and the base period.
For example, the adjustment factor for the standard deductions in 2008 was
calculated as follows. The average CPI-U for the base period, September 1987
through August 1988, was 116.62. The average CPI-U for the period September
2006 through August 2007 was 204.87. Given these amounts, the inflation
adjustment factor for 2008 was 1.76 (204.87/116.62).
16
U.S. Congress, Joint Committee on Taxation, Present Law and Background Relating to
the Individual Alternative Minimum Tax, JCX-38-07, June 25, 2007, pp. 11, 17.
17
For more information please see CRS Report RS21817, The Alternative Minimum Tax
(AMT): Income Entry Points and “Take Back” Effects, by Steven Maguire.
CRS-13
This inflation adjustment factor was then applied to $2,000 — the base year
value of the exemption in 1989 — resulting in $3,513. Rounding this number down
to the nearest multiple of $50 yields the final value of the exemption in 2008: $3,500.
Tax Rate Schedules for 1988 Through 2009
The following tables present the personal exemption amounts, standard
deductions, and the statutory marginal tax rates schedules for each tax year from
1988 through 2009.
CRS-14
Table 3. Personal Exemptions, Standard Deductions, and
Statutory Tax Rates, 1988
$1,950
Personal Exemptions
Standard Deductions
Joint
$5,000
Single
3,000
Head of Household
4,400
Additional Standard Deductions for the Elderly and the Blind
Joint
$600
Single/Head of Household
750
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 - $29,750
15% of the amount over $0
$29,750 - $71,900
$71,900 - $171,090a
$171,090 and over
$4,462.50 + 28% of the amount over $29,750
$16,264.50 + 33% of the amount over $71,900
$47,905.20 + 28% of the amount over $171,090
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 - $17,850
15% of the amount over $0
$17,850 - $43,150
$2,677.50 + 28% of the amount over $17,850
$43,150- $100,480a
$9,761.50 + 33% of the amount over $43,150
$100,480 and over
$28,134.40 + 28% of the amount over $100,480
Statutory Marginal Income Tax Rates, Heads of Household
If taxable income is:
$0 - $23,900
$23,900 - $61,650
$61,650 - $145,630a
$145,630 and over
Then, tax is:
15% of the amount over $0
$3,585 + 28% of the amount over $23,900
$14,155 + 33% of the amount over $61,650
$40,776.40 + 28% of the amount over $145,630
a. Implicit tax bracket, generated by the “tax bubble,” as described in text. The bracket’s upper bound
depends on the number of exemptions claimed by the taxpayer. The example in this table assumes one
exemption for single returns, two for the other statuses.
CRS-15
Table 4. Personal Exemptions, Standard Deductions, and
Statutory Tax Rates, 1989
$2,000
Personal Exemptions
Standard Deductions
Joint
$5,200
Single
3,100
Head of Household
4,550
Additional Standard Deductions for the Elderly and the Blind
Joint
$600
Single/Head of Household
750
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 - $30,950
15% of the amount over $0
$30,950 - $ 74,850
$4,642.50 + 28% of the amount over $ 30,950
$ 74,850 - $177,720a
$16,934.50 + 33% of the amount over $ 74,850
$177,720 and over
$50,881.60 + 28% of the amount over $177,720
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$ 0 - $ 18,550
15% of the amount over $0
$ 18,550 - $ 44,900
$ 2,782.50 + 28% of the amount over $ 18,550
$ 44,900 - $104,300a
$10,160.50 + 33% of the amount over $ 44,900
$104,300 and over
$29,772.40 + 28% of the amount over $104,300
Statutory Marginal Income Tax Rates, Heads of Household
If taxable income is:
$ 0 - $ 24,850
Then, tax is:
15% of the amount over $0
$ 24,850 - $ 64,200
$ 3,727.50 + 28% of the amount over $ 24,850
$ 64,200 - $151,210a
$14,745.50 + 33% of the amount over $ 64,200
$151,210 and over
$43,458.80 + 28% of the amount over $151,210
a. Implicit tax bracket, generated by the “tax bubble,” as described in text. The bracket’s upper bound
depends on the number of exemptions claimed by the taxpayer. The example in this table assumes one
exemption for single returns, two for the other statuses.
CRS-16
Table 5. Personal Exemptions, Standard Deductions, and
Statutory Tax Rates, 1990
$2,050
Personal Exemptions
Standard Deductions
Joint
$5,450
Single
3,250
Head of Household
4,750
Additional Standard Deductions for the Elderly and the Blind
Joint
$650
Single/Head of Household
800
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$ 0 - $ 32,450
15% of the amount over $0
$ 32,450 - $ 78,400
$ 4,867.50 + 28% of the amount over $ 32,450
$ 78,400 - $185,730a
$17,733.50 + 33% of the amount over $ 78,400
$185,730 and over
$53,152.40 + 28% of the amount over $185,730
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 - $ 19,450
15% of the amount over $0
$ 19,450 - $ 47,050
$ 2,917.50 + 28% of the amount over $ 19,450
$ 47,050 - $109,100a
$10,645.50 + 33% of the amount over $ 47,050
$109,100 and over
$31,122.00 + 28% of the amount over $109,100
Statutory Marginal Income Tax Rates, Heads of Households
If taxable income is:
$0 - $ 26,050
Then, tax is:
15% of the amount over $0
$ 26,050 - 67,200
$ 3,907.50 + 28% of the amount over $ 26,050
$ 67,200 - $157,890a
$15,429.50 + 33% of the amount over $ 67,200
$157,890 and over
$45,357.20 + 28% of the amount over $157,890
a. Implicit tax bracket, generated by the “tax bubble,” as described in text. The bracket’s upper bound
depends on the number of exemptions claimed by the taxpayer. The example in this table assumes one
exemption for single returns, two for the other statuses.
CRS-17
Table 6. Personal Exemptions, Standard Deductions, and
Statutory Tax Rates, 1991
$2,150
Personal Exemptions
Standard Deductions
Joint
$5,700
Single
3,400
Head of Household
5,000
Additional Standard Deductions for the Elderly and the Blind
Joint
$650
Single/Head of Household
850
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 - $ 34,000
15% of the amount over $0
$ 34,000 - $ 82,150
$ 5,100 + 28% of the amount over $ 34,000
$ 82,150 and over
$18,582 + 31% of the amount over $ 82,150
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 - $ 20,350
15% of the amount over $0
$ 20,350 - $ 49,300
$ 3,052.50 + 28% of the amount over $ 20,350
$ 49,300 and over
$11,158.50 + 31% of the amount over $ 49,300
Statutory Marginal Income Tax Rates, Heads of Households
If taxable income is:
$
0 - $ 27,300
Then, tax is:
15% of the amount over $0
$ 27,300 - $ 70,450
$ 4,095 + 28% of the amount over $ 27,300
$ 70,450 and over
$16,177 + 31% of the amount over $ 70,450
CRS-18
Table 7. Personal Exemptions, Standard Deductions, and
Statutory Tax Rates, 1992
$2,300
Personal Exemptions
Standard Deductions
Joint
$6,000
Single
3,600
Head of Household
5,250
Additional Standard Deductions for the Elderly and the Blind
Joint
$700
Single/Head of Household
900
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 - $ 35,800
15% of the amount over $0
$ 35,800 - $ 86,500
$ 5,370 + 28% of the amount over $ 35,800
$ 86,500 and over
$19,566 + 31% of the amount over $ 86,500
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 - $ 21,450
15% of the amount over $0
$ 21,450 - $ 51,900
$ 3,218 + 28% of the amount over $ 21,450
$ 51,900 and over
$11,744 + 31% of the amount over $ 51,900
Statutory Marginal Income Tax Rates, Heads of Households
If taxable income is:
$0 - $ 28,750
Then, tax is:
15% of the amount over $0
$ 28,750 - $ 74,150
$ 4,313 + 28% of the amount over $ 28,750
$ 74,150 and over
$17,235 + 31% of the amount over $ 74,150
CRS-19
Table 8. Personal Exemptions, Standard Deductions, and
Statutory Tax Rates, 1993
$2,350
Personal Exemptions
Standard Deductions
Joint
$6,200
Single
3,700
Head of Household
5,450
Additional Standard Deductions for the Elderly and the Blind
Joint
$700
Single/Head of Household
900
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 - $ 36,900
15% of the amount over $0
$ 36,900 - $ 89,150
$5,535 + 28% of the amount over $36,900
$ 89,150 - $ 140,000
$20,165 + 31% of the amount over $89,150
$ 140,000 - $ 250,000
$35,929 + 36% of the amount over $140,000
$ 250,000 and over
$75,529 + 39.6% of the amount over $250,000
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 - $ 22,100
15% of the amount over $0
$ 22,100 - $53,500
$3,315 + 28% of the amount over $22,100
$ 53,500 - $ 115,000
$12,107 + 31% of the amount over $53,500
$ 115,000 - $ 250,000
$31,172 + 36% of the amount over $115,000
$ 250,000 and over
$79,772 + 39.6% of the amount over $250,000
Statutory Marginal Income Tax Rates, Heads of Households
If taxable income is:
$0 - $ 29,600
Then, tax is:
15% of the amount over $0
$ 29,600 - $ 76,400
$4,440 + 28% of the amount over $29,600
$ 76,400 - $ 127,500
$17,544 + 31% of the amount over $76,400
$ 127,500 - $ 250,000
$33,385 + 36% of the amount over $127,500
$ 250,000 and over
$77,485 + 39.6% of the amount over $250,000
CRS-20
Table 9. Personal Exemptions, Standard Deductions, and
Statutory Tax Rates, 1994
$2,450
Personal Exemptions
Standard Deductions
Joint
$6,350
Single
3,800
Head of Household
5,600
Additional Standard Deductions for the Elderly and the Blind
Joint
$750
Single/Head of Household
950
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 - $ 38,000
15% of the amount over $0
$ 38,000 - $ 91,850
$5,700 + 28% of the amount over $38,000
$ 91,850 - $ 140,000
$20,778 + 31% of the amount over $91,850
$ 140,000 - $ 250,000
$35,705 + 36% of the amount over $140,000
$ 250,000 and over
$75,305 + 39.6% of the amount over $250,000
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 - $ 22,750
15% of the amount over $0
$ 22,750 - $ 55,100
$3,413 + 28% of the amount over $22,750
$ 55,100 - $ 115,000
$12,471 + 31% of the amount over $55,100
$ 115,000 - $ 250,000
$31,040 + 36% of the amount over $115,000
$ 250,000 and over
$79,640 + 39.6% of the amount over $250,000
Statutory Marginal Income Tax Rates, Heads of Households
If taxable income is:
$0 - $ 30,500
Then, tax is:
15% of the amount over $0
$ 30,500 - $ 78,700
$4,575 + 28% of the amount over $30,500
$ 78,700 - $ 127,500
$18,071 + 31% of the amount over $78,750
$ 127,500 - $ 250,000
$33,199 + 36% of the amount over $127,500
$ 250,000 and over
$77,299 + 39.6% of the amount over $250,000
CRS-21
Table 10. Personal Exemptions, Standard Deductions, and
Statutory Tax Rates, 1995
$2,500
Personal Exemptions
Standard Deductions
Joint
$6,550
Single
3,900
Head of Household
5,750
Additional Standard Deductions for the Elderly and the Blind
Joint
$750
Single/Head of Household
950
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 - $ 39,000
15% of the amount over $0
$ 39,000 - $ 94,250
$5,850 + 28% of the amount over $39,000
$ 94,250 - $ 143,600
$21,320 + 31% of the amount over $94,250
$ 143,600 - $ 256,500
$36,619 + 36% of the amount over $143,600
$ 256,500 and over
$77,263 + 39.6% of the amount over $256,500
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 - $ 23,350
15% of the amount over $0
$ 23,350 - $ 56,550
$3,503 + 28% of the amount over $23,350
$ 56,550 - $ 117,950
$12,799 + 31% of the amount over $56,550
$ 117,950 - $ 256,500
$31,833 + 36% of the amount over $117,950
$ 256,500 and over
$81,711 + 39.6% of the amount over $256,500
Statutory Marginal Income Tax Rates, Heads of Households
If taxable income is:
$0 - $ 31,250
Then, tax is:
15% of the amount over $0
$ 31,250 - $ 80,750
$4,688 + 28% of the amount over $31,250
$ 80,750 - $ 130,800
$18,548 + 31% of the amount over $80,750
$ 130,800 - $ 256,500
$34,063 + 36% of the amount over $130,800
$ 256,500 and over
$79,315 + 39.6% of the amount over $256,500
CRS-22
Table 11. Personal Exemptions, Standard Deductions, and
Statutory Tax Rates, 1996
$2,550
Personal Exemptions
Standard Deductions
Joint
$6,700
Single
4,000
Head of Household
5,900
Additional Standard Deductions for the Elderly and the Blind
Joint
$800
Single/Head of Household
1,000
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 - $ 40,100
15% of the amount over $0
$ 40,100 - $ 96,900
$6,015 + 28% of the amount over $40,100
$ 96,900 - $ 147,700
$21,919 + 31% of the amount over $96,900
$ 147,700 - $ 263,750
$37,667 + 36% of the amount over $147,700
$ 263,750 and over
$79,445 + 39.6% of the amount over $263,750
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 - $ 24,000
15% of the amount over $0
$ 24,000 - $ 58,150
$3,600 + 28% of the amount over $24,000
$ 58,150 - $ 121,300
$13,162 + 31% of the amount over $58,150
$ 121,300 - $ 263,750
$32,739 + 36% of the amount over $121,300
$ 263,750 and over
$84,021 + 39.6% of the amount over $263,750
Statutory Marginal Income Tax Rates, Heads of Households
If taxable income is:
$0 - $ 32,150
Then, tax is:
15% of the amount over $0
$ 32,150 - $ 83,050
$4,823 + 28% of the amount over $32,150
$ 83,050 - $ 134,500
$19,075 + 31% of the amount over $83,050
$ 134,500 - $ 263,750
$35,025 + 36% of the amount over $134,500
$ 263,750 and over
$81,555 + 39.6% of the amount over $263,750
CRS-23
Table 12. Personal Exemptions, Standard Deductions, and
Statutory Tax Rates, 1997
$2,650
Personal Exemptions
Standard Deductions
Joint
$6,900
Single
4,150
Head of Household
6,050
Additional Standard Deductions for the Elderly and the Blind
Joint
$800
Single/Head of Household
1,000
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 - $ 41,200
15% of the amount over $0
$ 41,200 - $ 99,600
$6,180 + 28% of the amount over $41,200
$ 99,600 - $ 151,750
$22,532 + 31% of the amount over $99,600
$ 151,750 - $ 271,050
$38,699 + 36% of the amount over $151,750
$ 271,050 and over
$81,647 + 39.6% of the amount over $271,050
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 - $ 24,650
15% of the amount over $0
$ 24,650 - $ 59,750
$3,698 + 28% of the amount over $24,650
$ 59,750 - $ 124,650
$13,526 + 31% of the amount over $59,750
$ 124,650 - $ 271,050
$33,645 + 36% of the amount over $124,650
$ 271,050 and over
$86,349 + 39.6% of the amount over $271,050
Statutory Marginal Income Tax Rates, Heads of Households
If taxable income is:
$0 - $ 33,050
Then, tax is:
15% of the amount over $0
$ 33,050 - $ 83,350
$4,958 + 28% of the amount over $33,050
$ 83,350 - $ 138,200
$19,602 + 31% of the amount over $85,350
$ 138,200 - $ 271,050
$35,986 + 36% of the amount over $138,200
$ 271,050 and over
$83,812 + 39.6% of the amount over $271,050
CRS-24
Table 13. Personal Exemptions, Standard Deductions, and
Statutory Tax Rates, 1998
$2,700
Personal Exemptions
Standard Deductions
Joint
$7,100
Single
4,250
Head of Household
6,250
Additional Standard Deductions for the Elderly and the Blind
Joint
$850
Single/Head of Household
1,050
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 - $ 42,350
15% of the amount over $0
$ 42,350 - $ 102,300
$6,353 + 28% of the amount over $42,350
$ 102,300 - $ 155,950
$23,139 + 31% of the amount over $102,300
$ 155,950 - $ 278,450
$39,770 + 36% of the amount over $155,950
$ 278,450 and over
$83,870 + 39.6% of the amount over $278,450
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 - $ 25,350
15% of the amount over $0
$ 25,350 - $ 61,400
$3,803 + 28% of the amount over $25,350
$ 61,400 - $ 128,100
$13,897 + 31% of the amount over $61,400
$ 128,100 - $ 278,450
$34,574 + 36% of the amount over $128,100
$ 278,450 and over
$88,700 + 39.6% of the amount over $278,450
Statutory Marginal Income Tax Rates, Heads of Households
If taxable income is:
$0 - $ 33,950
Then, tax is:
15% of the amount over $0
$ 33,950 - $ 87,700
$5,093 + 28% of the amount over $33,950
$ 87,700 - $ 142,000
$20,143 + 31% of the amount over $87,700
$ 142,000 - $ 278,450
$36,976+ 36% of the amount over $142,000
$ 278,450 and over
$86,098 + 39.6% of the amount over $278,450
CRS-25
Table 14. Personal Exemptions, Standard Deductions, and
Statutory Tax Rates, 1999
$2,750
Personal Exemptions
Standard Deductions
Joint
$7,200
Single
4,300
Head of Household
6,350
Additional Standard Deductions for the Elderly and the Blind
Joint
$850
Single/Head of Household
1,050
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 - $ 43,050
15% of the amount over $0
$ 43,050 - $ 104,050
$6,458 + 28% of the amount over $43,050
$ 104,050 - $ 158,550
$23,538 + 31% of the amount over $104,050
$ 158,550 - $ 283,150
$40,433 + 36% of the amount over $158,550
$ 283,150 and over
$85,289 + 39.6% of the amount over $283,150
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 - $ 25,750
15% of the amount over $0
$ 25,750 - $ 62,450
$3,863 + 28% of the amount over $25,750
$ 62,450 - $ 130,250
$14,139 + 31% of the amount over $62,450
$ 130,250 - $ 283,150
$35,157 + 36% of the amount over $130,250
$ 283,150 and over
$90,201 + 39.6% of the amount over $283,150
Statutory Marginal Income Tax Rates, Heads of Households
If taxable income is:
$0 - $ 34,550
Then, tax is:
15% of the amount over $0
$ 34,550 - $ 89,150
$5,183 + 28% of the amount over $34,550
$ 89,150 - $ 144,400
$20,471 + 31% of the amount over $89,150
$ 144,400 - $ 283,150
$37,598 + 36% of the amount over $144,440
$ 283,150 and over
$87,548 + 39.6% of the amount over $283,150
CRS-26
Table 15. Personal Exemptions, Standard Deductions, and
Statutory Tax Rates, 2000
$2,800
Personal Exemptions
Standard Deductions
Joint
$7,350
Single
4,400
Head of Household
6,450
Additional Standard Deductions for the Elderly and the Blind
Joint
$850
Single/Head of Household
1,100
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 - $ 43,850
15% of the amount over $0
$ 43,850 - $ 105,950
$6,578 + 28% of the amount over $43,850
$ 105,950 - $ 161,450
$23,966 + 31% of the amount over $105,950
$ 161,450 - $ 288,350
$41,171 + 36% of the amount over $161,450
$ 288,350 and over
$86,855 + 39.6% of the amount over $288,350
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 - $ 26,250
15% of the amount over $0
$ 26,250 - $ 63,550
$3,938 + 28% of the amount over $26,250
$ 63,550 - $ 132,600
$14,382 + 31% of the amount over $63,550
$ 132,600 - $ 288,350
$35,787 + 36% of the amount over $132,600
$ 288,350 and over
$91,857 + 39.6% of the amount over $288,350
Statutory Marginal Income Tax Rates, Heads of Households
If taxable income is:
$0 - $ 35,150
Then, tax is:
15% of the amount over $0
$ 35,150 - $ 90,800
$5,273 + 28% of the amount over $35,150
$ 90,800 - $ 147,050
$20,855 + 31% of the amount over $90,800
$ 147,050 - $ 288,350
$38,292 + 36% of the amount over $147,050
$ 288,350 and over
$89,160 + 39.6% of the amount over $288,350
CRS-27
Table 16. Personal Exemptions, Standard Deductions, and
Statutory Tax Rates, 2001
$2,900
Personal Exemptions
Standard Deductions
Joint
$7,600
Single
4,550
Head of Household
6,650
Additional Standard Deductions for the Elderly and the Blind
Joint
$900
Single/Head of Household
1,100
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 - $ 45,200
15% of the amount over $0
$ 45,200 - $ 109,250
$6,780 + 27.5% of the amount over $45,200
$ 109,250 - $ 166,500
$24,394 + 30.5% of the amount over $109,250
$ 166,500 - $ 297,350
$41,855 + 35.5% of the amount over $166,500
$ 297,350 and over
$88,307 + 39.1% of the amount over $297,350
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 - $ 27,050
15% of the amount over $0
$ 27,050 - $ 65,550
$4,058 + 27.5% of the amount over $27,050
$ 65,550 - $ 136,750
$14,646 + 30.5% of the amount over $65,550
$ 136,750 - $ 297,350
$36,362 + 35.5% of the amount over $136,750
$ 297,350 and over
$93,375 + 39.1% of the amount over $297,350
Statutory Marginal Income Tax Rates, Heads of Households
If taxable income is:
$0 - $ 36,250
Then, tax is:
15% of the amount over $0
$ 36,250 - $ 93,650
$5,438 + 27.5% of the amount over $36,250
$ 93,650 - $ 151,650
$21,223 + 30.5% of the amount over $93,650
$ 151,650 - $ 297,350
$38,913 + 35.5% of the amount over $151,650
$ 297,350 and over
$90,637 + 39.1% of the amount over $297,350
CRS-28
Table 17. Personal Exemptions and
Standard Deductions, 2002
Personal Exemptions
$3,000
Standard Deductions:
Joint
$7,850
Single
$4,700
Head of Household
$6,900
Additional Standard Deductions for the Elderly and the Blind:
Joint
Single/Head of Household
$900
$1,150
CRS-29
Table 18. Statutory Marginal Tax Rates, 2002
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$12,000
10% of the amount over $0
$12,000
to
$46,700
$1,200 + 15% of the amount over $12,000
$46,700
to
$112,850
$6,405 + 27% of the amount over $46,700
$112,850
to
$171,950
$24,266 + 30% of the amount over $112,850
$171,950
to
$307,050
$41,996 + 35% of the amount over $171,950
$307,050
and
over
$89,281 + 38.6% of the amount over $307,050
Single Returns
If taxable income is:
Then, tax is:
$0
to
$6,000
10% of the amount over $0
$6,000
to
$27,950
$600 + 15% of the amount over $6,000
$27,950
to
$67,700
$3,893 + 27% of the amount over $27,950
$67,700
to
$141,250
$14,626 + 30% of the amount over $67,700
$141,250
to
$307,050
$36,691 + 35% of the amount over $141,250
$307,050
and
over
$94,721 + 38.6% of the amount over $307,050
Heads of Households
If taxable income is:
Then, tax is:
$0
to
$10,000
10% of the amount over $0
$10,000
to
$37,450
$1,000 + 15% of the amount over $10,000
$37,450
to
$96,700
$5,118 + 27% of the amount over $37,450
$96,700
to
$156,600
$21,116 + 30% of the amount over $96,700
$156,600
to
$307,050
$39,086 + 35% of the amount over $156,600
$307,050
and
over
$91,744 + 38.6% of the amount over $307,050
CRS-30
Table 19. Statutory Marginal Tax Rates, 2003 Under Prior Law
(prior to enactment of the Jobs and Growth Tax Relief Reconciliation Act)
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$12,000
10% of the amount over $0
$12,000
to
$47,450
$1,200 + 15% of the amount over $12,000
$47,450
to
$114,650
$6,518 + 27% of the amount over $47,450
$114,650
to
$174,700
$24,662 + 30% of the amount over $114,650
$174,700
to
$311,950
$42,677 + 35% of the amount over $174,700
$311,950
and
over
$90,714 + 38.6% of the amount over $311,950
Standard Deduction for a joint return was $7,950
Single Returns
If taxable income is:
Then, tax is:
$0
to
$6,000
10% of the amount over $0
$6,000
to
$28,400
$600 + 15% of the amount over $6,000
$28,400
to
$68,800
$3,960 + 27% of the amount over $28,400
$68,800
to
$143,500
$14,868 + 30% of the amount over $68,800
$143,500
to
$311,950
$37,278 + 35% of the amount over $143,500
$311,950
and
over
$96,236 + 38.6% of the amount over $311,950
Standard deduction for a single return is $4,750
Heads of Households
If taxable income is:
Then, tax is:
$0
to
$10,000
10% of the amount over $0
$10,000
to
$38,050
$1,000 + 15% of the amount over $10,000
$38,050
to
$98,250
$5,208 + 27% of the amount over $38,050
$98,250
to
$159,100
$21,462 + 30% of the amount over $98,250
$159,100
to
$311,950
$39,717 + 35% of the amount over $159,100
$311,950
and
over
$93,214 + 38.6% of the amount over $311,950
Standard deduction for head of household return is $7,000
CRS-31
Table 20. Personal Exemptions and Standard Deductions,
Limitation on Itemized Deductions, and the Personal Exemption
Phase-out, 2003
(after enactment of the Jobs and Growth Tax Relief Reconciliation Act)
Personal Exemptions
$3,050
Standard Deductions:
Joint
$9,500
Single
$4,750
Head of Household
$7,000
Additional Standard Deductions for the Elderly and the Blind:
Joint
Single/Head of Household
Limitation on itemized deductions:
$950
$1,150
$139,500
Phase-out of personal exemptions:
Joint
$209,250
Head of household
$174,400
Single
$139,500
CRS-32
Table 21. Statutory Marginal Income Tax Rates, 2003
(after enactment of the Jobs and Growth Tax Relief Reconciliation Act)
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$14,000
10% of the amount over $0
$14,000
to
$56,800
$1,400 + 15% of the amount over $14,000
$56,800
to
$114,650
$7,820 + 25% of the amount over $56,800
$114,650
to
$174,700
$22,283 + 28% of the amount over $114,650
$174,700
to
$311,950
$39,097 + 33% of the amount over $174,700
$311,950
and
over
$84,390 + 35% of the amount over $311,950
Single Returns
If taxable income is:
Then, tax is:
$0
to
$7,000
10% of the amount over $0
$7,000
to
$28,400
$700 + 15% of the amount over $7,000
$28,400
to
$68,800
$3,910 + 25% of the amount over $28,400
$68,800
to
$143,500
$14,010 + 28% of the amount over $68,800
$143,500
to
$311,950
$34,926 + 33% of the amount over $143,500
$311,950
and
over
$90,515 + 35% of the amount over $311,950
Heads of Households
If taxable income is:
Then, tax is:
$0
to
$10,000
10% of the amount over $0
$10,000
to
$38,050
$1,000 + 15% of the amount over $10,000
$38,050
to
$98,250
$5,208 + 25% of the amount over $38,050
$98,250
to
$159,100
$20,258 + 28% of the amount over $98,250
$159,100
to
$311,950
$37,296 + 33% of the amount over $159,100
$311,950
and
over
$87,737 + 35% of the amount over $311,950
CRS-33
Table 22. Personal Exemptions and Standard Deductions,
Limitation on Itemized Deductions, and the Personal Exemption
Phase-out, 2004
Personal Exemptions
$3,100
Standard Deductions:
Joint
$9,700
Single
$4,850
Head of Household
$7,150
Additional Standard Deductions for the Elderly and the Blind:
Joint
Single/Head of Household
Limitation on itemized deductions:
$950
$1,200
$142,700
Phase-out of personal exemptions:
Joint
$214,050
Head of household
$178,350
Single
$142,700
CRS-34
Table 23. Statutory Marginal Income Tax Rates, 2004
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$14,300
10% of the amount over $0
$14,300
to
$58,100
$1,430 + 15% of the amount over $14,300
$58,100
to
$117,250
$8,000 + 25% of the amount over $58,100
$117,250
to
$178,650
$22,788 + 28% of the amount over $117,250
$178,650
to
$319,100
$39,980 + 33% of the amount over $178,650
$319,100
and
over
$86,328 + 35% of the amount over $319,100
Single Returns
If taxable income is:
Then, tax is:
$0
to
$7,150
10% of the amount over $0
$7,150
to
$29,050
$715 + 15% of the amount over $7,150
$29,050
to
$70,350
$4,000 + 25% of the amount over $29,050
$70,350
to
$146,750
$14,325 + 28% of the amount over $70,350
$146,750
to
$319,100
$35,717 + 33% of the amount over $146,750
$319,100
and
over
$92,593 + 35% of the amount over $319,100
Heads of Households
If taxable income is:
Then, tax is:
$0
to
$10,200
10% of the amount over $0
$10,200
to
$38,900
$1,020 + 15% of the amount over $10,200
$38,900
to
$100,500
$5,325 + 25% of the amount over $38,900
$100,500
to
$162,700
$20,725 + 28% of the amount over $100,500
$162,700
to
$319,100
$38,141 + 33% of the amount over $162,700
$319,100
and
over
$89,753 + 35% of the amount over $319,100
CRS-35
Table 24. Personal Exemptions, Standard Deductions,
Limitation on Itemized Deductions and the Personal Exemption
Phase-out Thresholds, 2005
Personal Exemptions
$3,200
Standard Deductions:
Joint
$10,000
Single
$5,000
Head of Household
$7,300
Additional Standard Deductions for the Elderly and the Blind:
Joint (each spouse)
$1,000
Single/Head of Household
$1,250
Limitation on itemized deductions:
$145,950
Phase-out of personal exemptions:
Joint
$218,950
Head of household
$182,450
Single
$145,950
CRS-36
Table 25. Statutory Marginal Income Tax Rates, 2005
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$14,600
10% of the amount over $0
$14,600
to
$59,400
$1,460 + 15% of the amount over $14,600
$59,400
to
$119,950
$8,180 + 25% of the amount over $59,400
$119,950
to
$182,800
$23,318 + 28% of the amount over $119,950
$182,800
to
$326,450
$40,916 + 33% of the amount over $182,800
$326,450
and
over
$88,321 + 35% of the amount over $326,450
Single Returns
If taxable income is:
Then, tax is:
$0
to
$7,300
10% of the amount over $0
$7,300
to
$29,700
$730 + 15% of the amount over $7,300
$29,700
to
$71,950
$4,090 + 25% of the amount over $29,700
$71,950
to
$150,150
$14,653 + 28% of the amount over $71,950
$150,150
to
$326,450
$36,549 + 33% of the amount over $150,150
$326,450
and
over
$94,728 + 35% of the amount over $326,450
Heads of Households
If taxable income is:
Then, tax is:
$0
to
$10,450
10% of the amount over $0
$10,450
to
$39,800
$1,045 + 15% of the amount over $10,450
$39,800
to
$102,800
$5,448 + 25% of the amount over $39,800
$102,800
to
$166,450
$21,198 + 28% of the amount over $102,800
$166,450
to
$326,450
$39,020 + 33% of the amount over $166,450
$326,450
and
over
$91,820 + 35% of the amount over $326,450
CRS-37
Table 26. Personal Exemptions, Standard Deductions,
Limitation on Itemized Deductions and the Personal Exemption
Phase-out Thresholds, 2006
Personal Exemptions
$3,300
Standard Deductions:
Joint
$10,300
Single
$5,150
Head of Household
$7,550
Additional Standard Deductions for the Elderly and the Blind:
Joint (each spouse)
$1,000
Single/Head of Household
$1,250
Limitation on itemized deductions:
$150,500
Phase-out of personal exemptions:
Joint
$225,750
Head of household
$188,150
Single
$150,500
CRS-38
Table 27. Statutory Marginal Income Tax Rates, 2006
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$15,100
10% of the amount over $0
$15,100
to
$61,300
$1,510 + 15% of the amount over $15,100
$61,300
to
$123,700
$8,440 + 25% of the amount over $61,300
$123,700
to
$188,450
$24,040 + 28% of the amount over $123,700
$188,450
to
$336,550
$42,170 + 33% of the amount over $188,450
$336,550
and
over
$91,043 + 35% of the amount over $336,550
Single Returns
If taxable income is:
Then, tax is:
$0
to
$7,550
10% of the amount over $0
$7,550
to
$30,650
$755 + 15% of the amount over $7,550
$30,650
to
$74,200
$4,220 + 25% of the amount over $30,650
$74,200
to
$154,800
$15,108 + 28% of the amount over $74,200
$154,800
to
$336,550
$37,676 + 33% of the amount over $154,800
$336,550
and
over
$97,653 + 35% of the amount over $336,550
Heads of Households
If taxable income is:
Then, tax is:
$0
to
$10,750
10% of the amount over $0
$10,750
to
$41,050
$1,075 + 15% of the amount over $10,750
$41,050
to
$106,000
$5,620 + 25% of the amount over $41,050
$106,000
to
$171,650
$21,858 + 28% of the amount over $106,000
$171,650
to
$336,550
$40,240 + 33% of the amount over $171,650
$336,550
and
over
$94,657 + 35% of the amount over $336,550
CRS-39
Table 28. Personal Exemptions, Standard Deductions,
Limitation on Itemized Deductions and the Personal Exemption
Phase-out Thresholds, 2007
Personal Exemptions
$3,400
Standard Deductions:
Joint
$10,700
Single
$5,350
Head of Household
$7,850
Additional Standard Deductions for the Elderly and the Blind:
Joint (each spouse)
$1,050
Single/Head of Household
$1,300
Limitation on itemized deductions:
$156,400
Phase-out of personal exemptions:
Joint
$234,600
Head of household
$195,500
Single
$156,400
CRS-40
Table 29. Statutory Marginal Income Tax Rates, 2007
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$15,650
10% of the amount over $0
$15,650
to
$63,700
$1,565 + 15% of the amount over $15,650
$63,700
to
$128,500
$8,773 + 25% of the amount over $63,700
$128,500
to
$195,850
$24,973 + 28% of the amount over $128,500
$195,850
to
$349,700
$43,831 + 33% of the amount over $195,850
$349,700
and
over
$94,601 + 35% of the amount over $349,700
Single Returns
If taxable income is:
Then, tax is:
$0
to
$7,825
10% of the amount over $0
$7,825
to
$31,850
$783 + 15% of the amount over $7,825
$31,850
to
$77,100
$4,386 + 25% of the amount over $31,850
$77,100
to
$160,850
$15,699 + 28% of the amount over $77,100
$160,850
to
$349,700
$39,149 + 33% of the amount over $160,850
$349,700
and
over
$101,469 + 35% of the amount over $349,700
Heads of Households
If taxable income is:
Then, tax is:
$0
to
$11,200
10% of the amount over $0
$11,200
to
$42,650
$1,120 + 15% of the amount over $11,200
$42,650
to
$110,100
$5,838 + 25% of the amount over $42,650
$110,100
to
$178,350
$22,700 + 28% of the amount over $110,100
$178,350
to
$349,700
$41,810 + 33% of the amount over $178,350
$349,700
and
over
$98,356 + 35% of the amount over $349,700
Table 30. Personal Exemptions, Standard Deductions,
Limitation on Itemized Deductions and the Personal Exemption
Phase-out Thresholds, 2008
Personal Exemptions
$3,500
Standard Deductions:
Joint
$10,900
Single
$5,450
Head of Household
$8,000
Additional Standard Deductions for the Elderly and the Blind:
Joint (each spouse)
$1,050
Single/Head of Household
$1,350
Limitation on itemized deductions:
$159,950
Phase-out of personal exemptions:
Joint
$239,950
Head of household
$199,900
Single
$159,950
CRS-42
Table 31. Statutory Marginal Income Tax Rates, 2008
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$16,050
10% of the amount over $0
$16,050
to
$65,100
$1,605 + 15% of the amount over $16,050
$65,100
to
$131,450
$8,962.50 + 25% of the amount over $65,100
$131,450
to
$200,300
$25,550 + 28% of the amount over $131,450
$200,300
to
$357,700
$44,828 + 33% of the amount over $200,300
$357,700
and
over
$96,770 + 35% of the amount over $357,700
Single Returns
If taxable income is:
Then, tax is:
$0
to
$8,025
10% of the amount over $0
$8,025
to
$32,550
$802.50 + 15% of the amount over $8,025
$32,550
to
$78,850
$4,481.25 + 25% of the amount over $32,550
$78,850
to
$164,550
$16,056.25 + 28% of the amount over $78,850
$164,550
to
$357,700
$40,052.25 + 33% of the amount over $164,550
$357,700
and
over
$103,791.75 + 35% of the amount over $357,700
Heads of Households
If taxable income is:
Then, tax is:
$0
to
$11,450
10% of the amount over $0
$11,450
to
$43,650
$1,145 + 15% of the amount over $11,450
$43,650
to
$112,650
$5,975 + 25% of the amount over $43,650
$112,650
to
$182,400
$23,225 + 28% of the amount over $112,650
$182,400
to
$357,700
$42,755 + 33% of the amount over $182,400
$357,700
and
over
$100,604 + 35% of the amount over $357,700
CRS-43
Table 32. Personal Exemptions, Standard Deductions,
Limitation on Itemized Deductions and the Personal Exemption
Phase-out Thresholds, 2009
Personal Exemptions
$3,650
Standard Deductions:
Joint
$11,400
Single
$5,700
Head of Household
$8,350
Additional Standard Deductions for the Elderly and the Blind:
Joint (each spouse)
$1,100
Single/Head of Household
$1,400
Limitation on itemized deductions:
$166,800
Phase-out of personal exemptions:
Joint
$250,200
Head of household
$208,500
Single
$166,800
CRS-44
Table 33. Statutory Marginal Income Tax Rates, 2009
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$16,700
10% of the amount over $0
$16,700
to
$67,900
$1,670 + 15% of the amount over $16,700
$67,900
to
$137,050
$9,350 + 25% of the amount over $67,900
$137,050
to
$208,850
$26,637.50 + 28% of the amount over $137,050
$208,850
to
$372,950
$46,741.50 + 33% of the amount over $208,850
$372,950
and
over
$100,894.50 + 35% of the amount over $372,950
Single Returns
If taxable income is:
Then, tax is:
$0
to
$8,350
10% of the amount over $0
$8,350
to
$33,950
$835 + 15% of the amount over $8,350
$33,950
to
$82,250
$4,675 + 25% of the amount over $33,950
$82,250
to
$171,550
$16,750 + 28% of the amount over $82,250
$171,550
to
$372,950
$41,754 + 33% of the amount over $171,550
$372,950
and
over
$108,216 + 35% of the amount over $372,950
Heads of Households
If taxable income is:
Then, tax is:
$0
to
$11,950
10% of the amount over $0
$11,950
to
$45,500
$1,195 + 15% of the amount over $11,950
$45,500
to
$117,450
$6,227.50 + 25% of the amount over $45,500
$117,450
to
$190,200
$24,215 + 28% of the amount over $117,450
$190,200
to
$372,950
$44,585 + 33% of the amount over $190,200
$372,950
and
over
$104,892.50 + 35% of the amount over $372,950to 2013
Summary
Statutory individual income tax rates are the tax rates that apply by law to various amounts of
taxable income. Statutory rates lay the foundation for marginal and average effective tax rates,
which most economists believe have a greater impact on the economic behavior of companies and
individuals than statutory rates. Marginal effective rates reflect the net effect of special tax
provisions on statutory rates. They are to be distinguished from average effective rates, which
measure someone’s tax burden.
Current statutory and effective individual tax rates are the result of the Tax Reform Act of 1986
(TRA86; P.L. 99-514) and several tax laws that have been enacted since 1986. Of particular
importance are the Omnibus Budget Reconciliation Act of 1990 (OBRA90; P.L. 101-508), the
Omnibus Budget Reconciliation Act of 1993 (OBRA93; P.L. 103-66), the Economic Growth and
Tax Relief Reconciliation Act of 2001 (EGTRRA; P.L. 107-16), the Tax Relief, Unemployment
Insurance Reauthorization, and Job Creation Act of 2010 (TRUC; P.L. 111-312), and the
American Taxpayer Relief Act of 2012 (ATRA, P.L. 112-240). TRA86 made major changes in the
income tax rate structure. EGTRRA established what are referred to as the Bush-era tax cuts for
individuals. TRUC extended those cuts for another two years, through 2012. And ATRA
permanently extended the Bush-era tax rates for taxpayers with taxable incomes below $400,000
for single filers and $450,000 for joint filers but reinstated the 39.6% top rate established by
OBRA93 for taxpayers with taxable incomes equal to or above those amounts.
There are seven statutory individual income tax rates in 2013 for ordinary income: 10%, 15%,
25%, 28%, 33%, 35%, and 39.6%. Income from long-term capital gains and dividends is taxed at
0% for individuals subject to the 15% tax bracket; 15% for individuals subject to the 25%, 28%,
33%, or 35% brackets; and 20% for taxpayers taxed at 39.6%. Starting in 2013, a 3.8% tax is
imposed on the lesser of net investment income received by individuals, estates, or trusts, or the
amount of their modified adjusted gross incomes above the threshold amounts of $250,000 for
joint filers and $125,000 for single filers. In addition, the individual alternative minimum tax
(AMT), which functions like a separate income tax in that its rate structure is more compressed
and tax base wider than those of the regular income tax, taxes income above exemption amounts
of $80,800 for joint filers and $51,900 for single filers in 2013 at rates of 26% and 28%.
Tax rates and the income brackets to which they apply are not the only elements of the individual
income tax that determine the tax liabilities of taxpayers. Personal exemptions, exclusions,
deductions, credits, and certain other elements have an effect as well.
Some of these elements are indexed for inflation. Congress added annual indexation to the
individual income tax in 1981. The primary advantage of such a mechanism is that it helps
prevent real tax increases and unintended shifts in the distribution of the tax burden driven by
inflation alone. Indexed elements include tax rate brackets, personal exemptions and their
phaseout thresholds, standard deductions, the itemized deduction limitation threshold, and the
AMT exemption amounts.
This report summarizes the tax brackets and other key elements of the individual income tax that
help determine taxpayers’ marginal and average effective tax rates going back to 1988. It is
updated annually to reflect the most recent indexation adjustments and any statutory changes.
Congressional Research Service
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Contents
Three Commonly Used Concepts of Tax Rates and How They Differ ............................................ 1
Major Legislation Affecting Statutory Rates Since 1986 ................................................................ 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 ................................................. 5
Jobs and Growth Tax Relief Reconciliation Act of 2003 and Subsequent Legislation ............. 6
Effects of Inflation on Income Tax Liabilities ............................................................................... 10
The Mechanics of Indexation ........................................................................................................ 13
Tax Rate Schedules for 1988 Through 2013.................................................................................. 14
Tables
Table 1. Phase-in and Expiration of Select Provisions Under EGTRRA and Subsequent
Legislation .................................................................................................................................... 8
Table 2. Indexed Elements of the Individual Income Tax System ................................................. 11
Table 3. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1988................... 14
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 ............................................................................... 27
Table 19. Statutory Marginal Tax Rates, 2003 Under Prior Law ................................................... 28
Table 20. Personal Exemptions and Standard Deductions, Limitation on Itemized
Deductions, and the Personal Exemption Phaseout, 2003 .......................................................... 29
Table 21. Statutory Marginal Income Tax Rates, 2003 .................................................................. 29
Congressional Research Service
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 22. Personal Exemptions and Standard Deductions, Limitation on Itemized
Deductions, and the Personal Exemption Phaseout, 2004 .......................................................... 30
Table 23. Statutory Marginal Income Tax Rates, 2004 .................................................................. 31
Table 24. Personal Exemptions, Standard Deductions, Limitation on Itemized Deductions
and the Personal Exemption Phaseout Thresholds, 2005 ........................................................... 32
Table 25. Statutory Marginal Income Tax Rates, 2005 .................................................................. 32
Table 26. Personal Exemptions, Standard Deductions, Limitation on Itemized Deductions
and the Personal Exemption Phaseout Thresholds, 2006 ........................................................... 33
Table 27. Statutory Marginal Income Tax Rates, 2006 .................................................................. 34
Table 28. Personal Exemptions, Standard Deductions, Limitation on Itemized Deductions
and the Personal Exemption Phaseout Thresholds, 2007 ........................................................... 35
Table 29. Statutory Marginal Income Tax Rates, 2007 .................................................................. 35
Table 30. Personal Exemptions, Standard Deductions, Limitation on Itemized Deductions
and the Personal Exemption Phaseout Thresholds, 2008 ........................................................... 36
Table 31. Statutory Marginal Income Tax Rates, 2008 .................................................................. 37
Table 32. Personal Exemptions, Standard Deductions, Limitation on Itemized Deductions
and the Personal Exemption Phaseout Thresholds, 2009 ........................................................... 38
Table 33. Statutory Marginal Income Tax Rates, 2009 .................................................................. 38
Table 34. Personal Exemptions, Standard Deductions, Limitation on Itemized
Deductions, and the Personal Exemption Phaseout Thresholds, 2010 ....................................... 39
Table 35. Statutory Marginal Income Tax Rates, 2010 .................................................................. 39
Table 36. Personal Exemptions, Standard Deductions, Limitation on Itemized
Deductions, and the Personal Exemption Phaseout Thresholds, 2011 ....................................... 40
Table 37. Statutory Marginal Income Tax Rates, 2011 .................................................................. 41
Table 38. Personal Exemptions, Standard Deductions, Limitation on Itemized
Deductions, and the Personal Exemption Phaseout Thresholds, 2012 ....................................... 42
Table 39. Statutory Marginal Income Tax Rates, 2012 .................................................................. 42
Table 40. Personal Exemptions, Standard Deductions, Limitation on Itemized
Deductions, and the Personal Exemption Phaseout Thresholds, 2013 ....................................... 43
Table 41. Statutory Marginal Income Tax Rates, 2013 .................................................................. 44
Contacts
Author Contact Information........................................................................................................... 44
Acknowledgments ......................................................................................................................... 45
Congressional Research Service
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Three Commonly Used Concepts of Tax Rates and
How They Differ
In discussing U.S. individual income tax rates, one should be clear about which rates are being
discussed. Three common measures of the tax rates people pay on their income are statutory
rates, marginal effective rates, and average effective rates. Each has its own meaning. Those
interested in how income taxes affect the economic behavior of households would benefit from
having a clear understanding of the ways in which the three rates differ and the implications of
these differences for the economic analysis of income taxes.
Statutory individual income tax rates (STRs) are the rates prescribed by law that apply to
specified tiers or brackets of taxable income. The applicable rate depends on the size of a person’s
taxable income. Since the federal income tax is progressive in nature, taxpayers with relatively
low taxable incomes face lower STRs than do taxpayers with relatively high taxable incomes.
Marginal effective tax rates (MERs) indicate the percentage of an additional dollar of income that
is paid in taxes. This means that the rates take into account any tax provisions (e.g., special
deductions or exemptions) that modify the applicable statutory rates.
By contrast, a taxpayer’s average effective rate (AER) is her income tax liability divided by some
measure of her total income. The tax liability is assumed to incorporate any special tax provisions
that modified her taxable income or taxes paid in a tax year.
MERs, AERs, and STRs may differ considerably for some taxpayers. According to a 2005 report
by the Congressional Budget Office (CBO) on marginal effective tax rates for labor income, a
married couple with two children and a gross income in 2005 of between $14,370 and $35,263
faced an STR of 10% but an MER of 31.06%, owing to the phaseout of the earned income tax
credit (EITC).1 But in many cases, the STRs and MERs are the same or nearly so. In the same
report, CBO found that most taxpayers faced MERs of 15% or less; less than 20% faced rates
above 25%; and about 7% faced rates above 30%.2 Still, for many individuals, the interaction
between special provisions in the tax code and their personal circumstances leads to differences
between their effective and statutory rates. Among the provisions that can drive a wedge between
the two rates are the EITC,3 the alternative minimum tax (AMT),4 and personal exemptions and
deductions.5 Personal circumstances that can cause MERs to diverge from STRs include the
sources of a taxpayer’s income, itemized deductions, the number of children (if any) eligible for
the child tax credit and EITC, and filing status.6
1
See U.S. Congressional Budget Office, Effective Marginal Tax Rates on Labor Income, November 2005, p. 2;
available at http://cbo.gov/ftpdocs/68xx/doc6854/11-10-LaborTaxation.pdf.
2
Ibid., p. 1.
3
For more information see CRS Report RL31768, The Earned Income Tax Credit (EITC): An Overview, by Christine
Scott.
4
For more information see CRS Report RL30149, The Alternative Minimum Tax for Individuals, by Steven Maguire.
5
For more details see CRS Report R40508, Personal Exemption Phaseout (PEP) and Limitation on Itemized
Deductions (Pease), by Gary Guenther.
6
Congressional Budget Office, Effective Marginal Tax Rates on Labor Income, p. 3.
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Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Most economists believe that taxpayers change their economic behavior in response to MERs, not
to statutory rates. Drawing on their standard model of consumer behavior, they argue that a
person’s MER influences many different decisions concerning whether and how much to work,
how much to spend, and how much to save. For example, someone’s MER may help determine
whether he takes on an overtime shift, bargains for wages and benefits, takes a second job, or
even enters the labor force. The idea that MERs affect an individual’s economic behavior can be
extended beyond the individual income tax to encompass an entire tax system, such as federal
payroll and excise taxes, as well as state and local taxes.7 A broader analysis along these lines,
however, is, beyond the scope of this report.
Major Legislation Affecting Statutory Rates Since
1986
The current income tax is a product of the Tax Reform Act of 1986 (TRA86; P.L. 99-514).
Among other things, the act reduced the individual tax rate structure to two statutory rates: 15%
and 28%. TRA86 also included a 5% surcharge on the taxable income of certain upper-income
households, effectively adding a third marginal tax rate of 33%.
In the 27 or so years since the enactment of TRA86, several other major changes in the federal
individual income tax rate structure have been made. The Omnibus Budget Reconciliation Act of
1990 (OBRA90; P.L. 101-508) eliminated the 5% surcharge and replaced it with a statutory rate
of 31%. In addition, OBRA90 imposed a limit on the amount of itemized deductions upperincome households could claim and accelerated the phaseout of personal exemptions for upperincome households. These provisions had the effect of raising effective tax rates above statutory
tax rates for affected taxpayers.
The Omnibus Budget Reconciliation Act of 1993 (OBRA93; P.L. 103-66) added two new
statutory rates (36% and 39.6%) at the upper end of the income scale. It also delayed indexation
of the two new tax brackets for one year and permanently extended the limitation on itemized
deductions and the accelerated phaseout of the personal exemption from OBRA90.
The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA; P.L. 107-16)
created a new 10% statutory rate. It also included a phased-in reduction in the top four statutory
rates to 25%, 28%, 33%, and 35%. Several other provisions of the act modified tax brackets and
limitations on personal exemptions and deductions for higher income taxpayers. The Jobs and
Growth Tax Relief Reconciliation Act of 2003 (JGTRRA; P.L. 108-27), Working Families Tax
Relief Act of 2004 (WFTRA; P.L. 108-311), and the Tax Increase Prevention and Reconciliation
Act of 2005 (TIPRA; P.L. 109-222) collectively accelerated and extended the tax rate reductions
originally enacted under EGTRRA through 2010.8 Under a last-minute agreement reached
between President Obama and congressional leaders from both parties, Congress passed a
measure (the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of
7
For an example of such analysis, see S. D. Holt and J. L. Romich, (2007), “Marginal Tax Rates Facing Low- and
Moderate-Income Workers Who Participate in Means-Tested Transfer Programs,” National Tax Journal, vol. 60, no. 2,
June 2007, p. 253.
8
For more details see CRS Report R41111, Expiration and Extension of the Individual Income Tax Cuts First Enacted
in 2001 and 2003: Background and Analysis, by James M. Bickley.
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Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
2010, TRUC, P.L. 111-312) that extended the Bush-era individual income tax cuts through 2012.
Facing the unwanted prospect of an across-the-board increase in all STRs, the 112th Congress
passed a measure (American Taxpayer Relief Act of 2012 (ATRA, P.L. 112-240) permanently
extending each of the Bush-era STRs with one exception: the top rate increased from 35% to
39.6%. Each of these major acts is described in more detail below.
Tax Reform Act of 1986
Among its many changes, TRA86 simplified the individual income tax rate structure for tax years
after 1987 by replacing the 14 non-zero statutory rates that applied to the 1985 and 1986 tax years
with two such rates: 15% and 28%. Table 3 shows the key elements of the 1988 tax rate structure.
These rates applied to capital income as well as to labor income.
Although TRA86 established only two statutory individual marginal income tax rates, it also
adopted a 5% surcharge on the taxable income of certain upper-income households. This
surcharge effectively created a third statutory tax rate of 33% (a 28% statutory tax rate plus a 5%
surcharge).
Because the surcharge phased in over a certain range of income and then phased out as incomes
increased, statutory tax rates rose to 33% but then fell back to 28%, producing what was known
as the tax rate “bubble.” The intent of the surcharge was two-fold: (1) to prevent TRA86 from
changing the distribution of the income tax burden among income groups relative to its
distribution under pre-1986 tax law, and (2) to meet specified revenue targets.
More specifically, the surcharge was designed to eliminate the tax benefits of both the 15% tax
bracket and the personal exemptions for upper-income households. For joint returns in 1988, the
phaseout of the 15% tax rate started when taxable income exceeded $71,900 and ended when
taxable income reached $149,250; the phaseout of the exemptions followed from that point on.
For single returns, the phaseout of the 15% tax bracket occurred when taxable income was
between $47,050 and $97,620. For heads of households, the phaseout occurred when taxable
income fell in the range of $67,200 to $134,930. The phaseout of the exemptions followed the
phaseout of the 15% tax bracket for all filers, but the range of income over which it took place
depended on the number of exemptions claimed by a taxpayer.
To demonstrate how the 5% surcharge worked to “phase out” the tax benefits of the 15% tax
bracket consider the following example based on joint returns for 1988. The difference between
taxing the first $29,750 of taxable income at 28% instead of 15% was $3,867.50 (obtained as
$29,750 multiplied by 13%, the difference between 28% and 15%). Five percent of the difference
between the upper and lower phaseout limits also equaled $3,867.50 ($149,250 less $71,900
multiplied by 5%). Hence, assessing the 5% surcharge on taxable income between $78,400 and
$162,770 was equivalent to taxing the first $32,450 of taxable income at 28% rather than 15%.
A 5% surcharge was also used to phase out the tax benefit from the personal exemption for upperincome households. In 1988, each personal exemption was worth $1,950 and produced a tax
savings for a household in the 28% tax rate bracket of $546 ($1,950 times 28%). To recapture
these tax savings, a 5% surcharge was assessed against $10,920 of taxable income for each
personal exemption claimed. The result was an increase in tax liability of $546 ($10,920 times
5%), the same amount as the tax savings from the personal exemption.
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Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
The phaseout of personal exemptions started immediately after the phaseout of the 15% tax
bracket and occurred sequentially for each exemption. This meant that the taxable income range
over which the 5% surcharge offset personal exemptions depended on the number of personal
exemptions claimed on the tax return. For example, on a joint return claiming two personal
exemptions, the 5% surcharge would apply to taxable income between $149,250 and $171,090
($149,250 plus two times $10,920). On a joint return with four personal exemptions, the 5%
surcharge would apply to taxable income between $149,250 and $192,930 ($149,250 plus four
times $10,920).
Omnibus Budget Reconciliation Act of 1990
The Omnibus Budget Reconciliation Act of 1990 (OBRA90) created a three-tiered statutory
marginal income tax rate structure with rates of 15%, 28%, and 31%, effective in tax years
beginning in 1991, as shown in Table 5. OBRA90 eliminated the tax bubble created under
TRA86, but replaced it with a limitation on itemized deductions and a new approach to phasing
out the tax benefits of the personal exemption for upper-income households.
OBRA90 reintroduced a tax-rate differential on capital gains income. OBRA90 contained a
provision which limited the tax on capital gains income to a maximum of 28%. This provision
was effective starting in tax year 1991. Under TRA86, capital gains had been treated as ordinary
income and taxed at regular rates of up to 33%.
The OBRA90 limitation on itemized deductions worked as follows. For tax years starting in
1991, otherwise allowable deductions were reduced by 3% of the amount by which a taxpayer’s
adjusted gross income (AGI) exceeded $100,000 (or $50,000 in the case of married couples filing
separate returns). For example, in 1991, if a taxpayer’s AGI was $110,000, then his otherwise
allowable itemized deductions would be reduced by $300 ($110,000 less $100,000 times 3%).
This provision effectively raised the marginal income tax rate of those taxpayers affected by
approximately one percentage point. A dollar of income in excess of $100,000 was taxed as if it
were $1.03, since in addition to the tax on an extra dollar of income, the taxpayer lost tax
deductions by giving up $0.03 of itemized deductions.
This limitation was scheduled to expire after tax year 1995 under OBRA90, but was later
extended. Allowable deductions for medical expenses, casualty and theft losses, and investment
interest were not subject to this limitation. For tax years after 1991, the $100,000 threshold was
indexed for inflation.
The phaseout of the tax benefits of the personal exemption worked as follows. Each personal
exemption was phased out by a factor of 2% for each $2,500 (or fraction thereof) by which a
taxpayer’s AGI exceeded a given threshold amount. In 1991, the threshold amount for a joint
return was $150,000; for a single return the threshold was $100,000; and for heads of households
the threshold was $125,000.
For example, in 1991, a joint household whose AGI was $183,000 would lose 28% of their total
personal exemptions claimed. The AGI amount in excess of the threshold in this instance would
be $33,000, $183,000 AGI less $150,000 threshold limit. The $33,000 excess divided by $2,500
would produce a factor of 13.2, which when rounded up would equal 14. This figure is multiplied
by 2% to arrive at the final disallowance amount of 28%. Hence, if the family had claimed two
personal exemptions, which at $2,150 each would total $4,300, they would only be allowed to
Congressional Research Service
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Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
deduct $3,096 ($4,300 total personal exemptions less the $1,204 disallowance, which is 28% of
the total).
For tax years after 1991, these income threshold amounts were indexed for inflation. The personal
exemptions phaseout provision was also scheduled to expire after tax year 1995.
Omnibus Budget Reconciliation Act of 1993
The Omnibus Budget Reconciliation Act of 1993 (OBRA93) made several changes in the
individual marginal income tax rate structure. First, it added two new marginal tax rates, 36% and
39.6%, at the upper end of the income spectrum. The 39.6% tax bracket was the result of adding a
10% surtax to the 36% rate for taxpayers with taxable incomes over $250,000 in 1993.
Although OBRA93 was enacted in August of 1993, the increase in the top marginal tax rates was
made effective retroactively to January 1, 1993. Affected taxpayers, however, were not assessed
penalties for underpayment of 1993 taxes resulting from the tax rate increase. Taxpayers were
also allowed to pay any additional 1993 taxes in three equal installments over a two-year period.
Second, OBRA93 delayed indexation of the new top marginal income tax brackets for one year.
Hence, the nominal dollar tax brackets for the 36% and 39.6% marginal tax rates remained at the
same level for both tax years 1993 and 1994.
Finally, OBRA93 made permanent both the itemized deduction limitation and the phaseout of the
tax benefits from personal exemptions.
Economic Growth and Tax Relief Reconciliation Act of 2001
The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) made several
major changes to the marginal tax rate structure. Many of the act’s provisions were set to phase in
over a period of time, but subsequent legislation, described in the next section, overrode the
schedule originally set by EGTRRA. Table 1 shows the time line of changes related to the
marginal tax rate structure enacted under EGTRRA and the subsequent bills. All of the EGTRRA
provisions, as amended, expire at the end of 2010.
First, the 2001 act created a new 10% bracket. It applied, beginning in tax year 2002, to the first
$12,000 of taxable income for married couples filing jointly, the first $10,000 of taxable income
for heads of households, and the first $6,000 of taxable income for single individuals. For tax
year 2001, the act created a “rate reduction tax credit,” mimicking the effects of the 10% tax rate
bracket for most taxpayers.9
EGTRRA gradually phased in and expanded the bracket over several years, but in 2003-2007,
these provisions of EGTRRA were accelerated by subsequent legislation. In 2008, EGTRRA
became effective again, setting the 10% marginal tax rate bracket at $7,000 and $14,000 for
single and married taxpayers, respectively. Starting with tax year 2009, these bracket amounts are
indexed for inflation.
9
For more information see CRS Report RS21171, The Rate Reduction Tax Credit - “The Tax Rebate” - in the
Economic Growth and Tax Relief Reconciliation Act of 2001: A Brief Explanation, by Steven Maguire.
Congressional Research Service
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Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Second, the 2001 act gradually reduced the top four marginal income tax rates. Under prior
income tax law, the top four marginal tax rates were 28%, 31%, 36%, and 39.6%. When fully
phased in, the 2001 act reduced the top four marginal income tax rates to 25%, 28%, 33%, and
35%. Once again, under EGTRRA the reductions were scheduled to take place in 2001 through
2006, but subsequent legislation accelerated the EGTRRA phase-in schedule.
Third, EGTRRA also repealed the limitation on itemized deductions and personal exemptions for
high-income taxpayers. The repeal was phased in between 2006 and 2009. The limitation is
completely repealed for 2010, but it would reappear again in 2011, once the EGTRRA’s tax cuts
expire.
Fourth, some of the act’s measures designed to reduce the marriage penalty affected the rate
bracket structure. The act increased the width of the 15% tax bracket for married couples filing
joint returns to twice the width of the 15% tax bracket for single returns. Under EGTRRA this
provision was scheduled for phase-in over a four-year time period starting in 2005, but
subsequent legislation accelerated this time line. Under EGTRRA, the end point of the 15% tax
bracket for joint returns was scheduled to be 180% of the end point of the 15% tax bracket for
single returns in 2005, 187% in 2006, 193% in 2007, and 200% in 2008 and subsequent years.10
Finally, the 2001 act increased the standard deduction for joint returns to twice the size of the
standard deduction for single returns. The change was scheduled to be phased in over a five-year
period, 2005 to 2009, but it was accelerated by the subsequent bills as well. This had an effect, as
far as tax rate brackets were concerned, of raising the lower threshold of the lowest tax bracket
for married taxpayers.
Jobs and Growth Tax Relief Reconciliation Act of 2003 and
Subsequent Legislation
Among the several acts extending provisions of EGTRRA, the following directly affected
statutory income tax rates: the Jobs and Growth Tax Relief Reconciliation Act of 2003
(JGTRRA), the Working Families Tax Relief Act of 2004 (WFTRA), the Tax Increase Prevention
and Reconciliation Act of 2005 (TIPRA), the Tax Relief, Unemployment Insurance
Reauthorization, and Job Creation Act of 2010 (TRUC), and the American Taxpayer Relief Act of
2012.
JGTRRA accelerated several changes to the individual income tax rate structure first enacted
under EGTRRA. It moved forward to 2003 the tax rate reductions, the expansion of the 10% tax
bracket, and the widening of the 15% tax bracket for joint returns to make it double the width of
the 15% tax bracket for single returns. Under EGTRRA, some of these changes would not have
been fully phased in until 2009.
WFTRA extended several tax provisions of JGTRRA that were scheduled to expire at the end of
2004. Among other things, it extended the increase in the 10% income tax bracket through 2007,
at which point EGTRRA’s relevant provisions were fully phased in, maintaining a constant level
of the tax relief.
10
For more information on these changes see CRS Report R41111, Expiration and Extension of the Individual Income
Tax Cuts First Enacted in 2001 and 2003: Background and Analysis, by James M. Bickley.
Congressional Research Service
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Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
WFTRA also extended marriage penalty relief through 2008. The standard deduction and 15% tax
bracket for joint returns were set at twice their level for single returns. In 2009 and 2010,
EGTRRA provisions applied, maintaining the same level of tax relief.
JGTRRA also established a more preferential tax rates for long-term capital gains and dividends.
It reduced the rates applicable to these kinds of income to 15%, and even 0% for certain lowincome taxpayers. These changes were set to expire at the end of 2008, but TIPRA extended them
through the end of 2010.
A last-minute agreement in 2010 between President Obama and congressional leaders of both
parties cleared the way for an extension of all the Bush-era individual tax cuts through the end of
2012. TRUC was the legislative vehicle for the extension.
Under the threat of a return of each statutory tax rate to its level before the enactment of
EGTRRA starting January 1, 2013, Congress and President Obama agreed on legislation (ATRA)
to extend permanently each of the Bush-era rates and raise the top marginal tax rate to its preEGTTRA level of 039.6%. The act also permanently extends the repeal of the phaseout of the
personal exemption included in EGTRRA, but it restricts the phaseout to taxpayers with AGIs of
$250,000 or less for single filers and $300,000 or less for married couples filing jointly.
Taxpayers with AGIs above these inflation-adjusted amounts are subject to the phaseout. The
same rule applies to the repeal under EGTRRA of the so-called Pease limitation on the amount of
itemized deductions an upper-income taxpayer could take.
Congressional Research Service
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Statutory Individual Income Tax Rates and Other Elements of the Tax System: 1988 throu
Table 1. Phase-in and Expiration of Select Provisions Under EGTRRA and Subsequent Legislation
Provision
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Tax Rates and Brackets
Create 10% tax bracket
EGTRRA: $12,000 /
$6,000 brackets for
couples / singles.
EGTRRA:
EGTRRA:
JGTRRA:
$14,000 /
$7,000 for
couples /
singles. Index
in 2004.
WFTRA: $14,000 /
$7,000 for couples /
singles.
EGTRRA: $14,000 / $7,000
for couples / singles. Index in
2009.
JGTRRA:
EGTRRA:
TRUC
extended the
bracket
through
2012.
TRUC:
ATRA:
Permanently
extended
these
brackets.
39.6%
Reduce tax rates in top four tax
brackets
Reduce tax rates on capital gains
and dividends
ATRA:
Permanently
extended
the bracket.
39.1%
38.6%
35%
35%
35%
35%
35.5%
35%
33%
33%
33%
33%
30.5%
30%
28%
28%
28%
28%
27.5%
27%
25%
25%
25%
25%
TRUC: 15%/0
ATRA: 0%
for
taxpayers in
10%
bracket;
15% for
taxpayers in
25% to 35%
brackets;
and 20% for
taxpayers in
39.6%
bracket.
TRUC:
ATRA:
No change.
JGTRRA: 15% or 5% rate depending
on income.
JGTRRA:
15% / 0%
TIPRA: 15% / 0%
Limits on Itemized Deductions and Personal Exemptions
Reduce or eliminate limits on
CRS-8
No change.
EGTRRA:
EGTRRA:
EGTRRA:
Statutory Individual Income Tax Rates and Other Elements of the Tax System: 1988 throu
Provision
2001
2002
2003
2004
2005
itemized deductions and personal
exemptions
2006
2007
Reduce limits
by one-third.
2008
2009
Reduce limits by
two-thirds.
2010
Repeal
limits.
2011
2012
2013
Extended
repeal until
2012.
Limits
permanently
reinstated
for
taxpayers
with
incomes
above
$250,000
for single
filers and
$300,000
for joint
filers.
EGTRRA:
Deduction for
couples is 200%
of the deduction
for singles.
TRUC:
Extended the
EGTRRA
deduction
through
2012.
ATRA:
Permanently
extended
JGTRRA
relief.
EGTRRA: Top of the bracket
for couples is 200% of that
for singles.
TRUC:
Extended the
expanded
15% bracket
for couples
through
2012.
ATRA:
Permanently
extended
JGTRRA
relief.
Marriage Penalty Relief
Increase standard deduction for
married couples
Expand 15% bracket for married
couples
No change.
JGTRRA:
Deduction
for couples is
200% of the
deduction for
singles.
No change.
JGTRRA: Top
of the
bracket for
couples is
200% of that
for singles.
WFTRA: Deduction for couples is
200% of the deduction for singles.
WFTRA: Top of the
bracket for couples is
200% of that for
singles.
Source: CRS adaptation of Congressional Budget Office and Joint Committee on Taxation tables and publications.
Note: EGTRRA—Economic Growth and Tax Relief Reconciliation Act of 2001 (P.L. 107-16, 2001, introduced as H.R. 1836); JGTRRA—Jobs and Growth Tax Relief
Reconciliation Act of 2003 (P.L. 108-27, 2003, introduced as H.R. 2); WFTRA—Working Families Tax Relief Act of 2004 (P.L. 108-311, 2004, introduced as H.R. 1308);
TIPRA—Tax Increase Prevention and Reconciliation Act of 2005 (P.L. 109-222, 2006, introduced as H.R. 4297); and ATRA—American Taxpayer Relief Act of 2012 (P.L.
112-240, 2012, introduced as H.R. 8).
CRS-9
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Effects of Inflation on Income Tax Liabilities
During periods of inflation, a progressive income tax structure based on tax brackets set in
nominal dollars can lead to automatic tax increases and unintended changes in the income
distribution of the tax burden. This is because nominal incomes rise faster than real incomes, all
other things being equal. As a result, tax burdens for taxpayers become larger than what
lawmakers intended when they passed the laws setting existing statutory tax rates. In the absence
of periodic indexation of the key elements of the tax code determining the tax burdens of
individuals, a greater share of taxpayers will face growing tax liabilities because their nominal
incomes will increase, irrespective of what happens to their real incomes.
The effects of inflation on income tax liabilities can be substantial, even in periods of low
inflation, such as the last two decades or so. Still, according to the Bureau of Labor Statistics,
$1,000 in 1988 is worth about $1,941 in 2012.11 Year-to-year changes might appear negligible,
but over a decade or so, those annual changes can add up to make a substantial difference through
the power of compounding.
A hypothetical example can illustrate the implications over time of a lack of indexation for the tax
burdens of individual taxpayers. Assume that the tax structure from 1988 applied without
indexation or any other changes in 2012. Also assume that a family of four had an adjusted gross
income (AGI) of $35,000 in 1988. If the family took the standard deduction, then its taxable
income would have been $22,200 ($35,000 minus the standard deduction of $5,000 and four
personal exemptions at $1,950 apiece), and its tax liability—$3,330. This translates into an aftertax income of $31,670 ($35,000 less $3,330), or an average tax rate of 9.5% ($3,270 divided by
$35,000 income).
Now consider what would have happened to the family’s tax burden in 2012 if the same family’s
nominal income had kept up with inflation but the 1988 tax structure had remained intact, with no
indexation for inflation. The family’s AGI would have been $67,929: $35,000 x 1.94 rise in the
general price level as measured by the Consumer Price Index for all Urban Consumers. Its taxable
income would have been $55,129, and its tax liability would have increased to $11,569 in 2012
dollars, or $5,961 in 1988 dollars ($11,569 adjusted for cumulative inflation of about 49%). This
would have represented a 79% increase in the family’s real tax liability (measured in 1988
dollars). The family’s after-tax income would have been $56,360 in 2012 dollars, or $29,025 in
1988 dollars ($56,360 adjusted for a cumulative rise in the cost of living of about 49%), or a
decrease of over 8% from 1988. Its average tax rate would have increased from 9.5 % to 17.0%.
So in the absence of the indexation, the family’s real after-tax income would have declined by
8%, and its real income tax burden would have risen by 79% from 1988 to 2012. This striking
discrepancy exemplifies what is known as “bracket creep.” Such an effect would be even more
pronounced during periods of high inflation.
Under an indexed income tax, the family would have experienced no change in their real after-tax
income. With indexation, the value of the standard deduction for a joint return would have
increased from $5,000 in 1988 to $9,700 in 2012, and the personal exemption for each family
11
BLS, CPI Inflation Calculator, website, at http://www.bls.gov/data/inflation_calculator.htm/.
Congressional Research Service
10
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
member would have increased from $1,950 to $3,783. Under these circumstances, the family’s
2012 taxable income would have been $43,079 ($67,929 income less standard deduction and
personal exemptions). Tax brackets would have adjusted as well. Based on this taxable income
and the adjusted brackets, their income tax liability would have been $6,465, or $3,329 in 1988
dollars—about the same as it was in 1988 (the difference is due to rounding). In short, the
nominal amounts would have risen, but the real values would have stayed the same for this
family.
Congress added indexation to the individual income tax as a part of the overall package of
statutory tax rate reductions contained in the Economic Recovery Tax Act of l981. The U.S. rate
of inflation was unusually high at the time.
The Congress believed that “automatic” tax increases resulting from the effects of inflation
were unfair to taxpayers, since their tax burden as a percentage of income could increase
during intervals between tax reduction legislation, with an adverse effect on incentives to
work and invest. In addition, the Federal Government was provided with an automatic
increase in its aggregate revenue, which in turn created pressure for further spending.12
Since 1981, the list of indexed elements has gradually expanded and now consists of more than
three dozen tax parameters. One notable expansion occurred with TRA86, which extended
indexation to some newly created elements of the tax code, including the standard deductions for
the elderly and the blind and the EITC. More recently, EGTRRA indexed the phaseout amounts
for the EITC, starting in 2008.
Table 2 lists the major indexed tax items and provides the first year of for the adjustment.13
Table 2. Indexed Elements of the Individual Income Tax System
Base Period Is the 12-Month
Period Ending
Adjustment First Occurs in
Calendar Year
Standard deduction
31-Aug-87
1989
Unearned income of minor child (base
amount)
31-Aug-87
1989
Exemptions
31-Aug-88
1990
Educational savings bonds
31-Aug-89
1991
Exemption phaseout
31-Aug-90
1992
Itemized deduction limitation (3% of AGI)
31-Aug-90
1992
10% bracket
31-Aug-02
2004
15%, 25%, 28% brackets
31-Aug-92
1994
33%, 35%, 39.6% brackets
31-Aug-93
1995
Item
Tax rate schedules:
12
U.S. Congress, Joint Committee on Taxation, General Explanation of the Economic Recovery Tax Act of 1981, JCS71-81, December 31, 1981, as redistributed by CCH Internet Tax Research NetWork.
13
James C. Young, “A Summary of 2007 Inflation Adjustments Impacting Individuals,” Tax Notes, Oct. 15, 2007, p.
246.
Congressional Research Service
11
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Base Period Is the 12-Month
Period Ending
Adjustment First Occurs in
Calendar Year
31-Aug-13
2014
Base amounts and maximum earned
income amount
31-Aug-95
1997
Married phaseout base
31-Aug-08
2010
Standard deduction for employed
dependents
31-Aug-97
1999
Medical savings accounts
31-Aug-97
1999
Annual gift tax exclusion
31-Aug-97
1999
Categories 1 and 2
31-Aug-01
2003
Category 3
31-Aug-98
2000
HOPE, lifetime learning, and child tax
credits
31-Aug-00
2002
Education loan interest
31-Aug-01
2003
Credit/exclusion amount
31-Aug-09
2011
Phaseout base
31-Aug-01
2003
Income phaseout
31-Aug-05
2007
Contribution Limit
31-Aug-07
2009
Section 179 expense amounts
31-Aug-06
2008
Item
Alternative minimum tax:
Exemption amounts for single and
joint filers
Earned income credit:
Qualified transportation fringe benefits:
Adoption expenses/credit
Traditional and Roth IRAs
Source: James C. Young, “Inflation Adjustments Affecting Individual Taxpayers in 2012,” Tax Notes, Dec. 5, 2011
Indexing may compound the complexity of the individual income tax, but given its benefits to
taxpayers over time, this is a minor matter. The year-to-year changes in dollar amounts are
usually small, so taxpayers seldom, if ever, face unexpected changes that might materially affect
them. On the revenue side, indexing results in lower government receipts.
But some key elements of the tax remain unadjusted for inflation, giving rise to significant policy
challenges from time to time. One such element is the child tax credit. Under current law, the
amount of the credit itself and the phaseout thresholds for higher-income taxpayers are not
adjusted for inflation. But the earned income floor used in calculating the credit’s refundable
amount is adjusted for inflation.14 Consequently, inflation would erode the value of the credit and
reduce the number of eligible taxpayers at both ends of the income spectrum in the long run under
14
In 2008-2010 the amount of the threshold was set by special provisions of the Emergency Economic Stabilization
Act of 2008 (P.L. 110-343) and the American Recovery and Reinvestment Act of 2009 (P.L. 111-5), but these
provisions are currently set to expire at the end of 2010.
Congressional Research Service
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Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
current law. Another element not indexed for inflation is the threshold amounts for determining
who pays the 3.8% tax on net investment income that takes effect in 2013.
The Mechanics of Indexation
Most elements are indexed using the technical calculation described below. In some instances, the
calculation methodology differs somewhat in one way or another. Examples include the EITC or
transportation benefits. The variations are insignificant, as long as they do not result in systematic
deviations from the rate of inflation.
The adjustment for any given tax year is based on the percentage amount by which the average
Consumer Price Index for all items for all urban consumers (CPI-U) for the 12-month period
ending on August 31 of the preceding year exceeds the average CPI-U during a 12-month base
period. Not all indexed tax elements use the same base period, as shown in Table 2.
With the exception of the EITC, inflation adjustments are rounded down to the nearest multiple of
$50. Although rounding down affects the accuracy of any given year’s inflation adjustment, the
effect is not cumulative since each year’s adjustment reflects the entire amount of inflation that
has occurred between the adjustment year and the base period.
For example, the adjustment factor for the personal exemption in 2012 was calculated as follows.
By law, the base period for this factor is September 1987 through August 1988, when the average
CPI-U was 116.6. The average CPI-U for the period September 2010 through August 2011, on
which the 2012 value is based, was 222.4. Thus, the inflation adjustment factor in 2012 was 1.91
(222.4/116.6). This factor was then applied to $2,000, the value of the exemption in 1989,
resulting in $3,820. Rounding this number down to the nearest multiple of $50 yielded the final
value of the exemption in 2012: $3,800.
Since the onset of the Great Recession in late 2007, the U.S. inflation rate has fluctuated between
-0.4% and 3.2%, as measured by the CPI-U on a year-to-year basis. Negative inflation, or
deflation, occurred in 2009 relative to 2008. Deflation denotes a decrease in the general price
level. As a result, the inflation adjustments in 2010 were either very small or non-existent. Several
other federal programs experienced similar situations, even though they do not use the same
indexing methodology. For example, there was no cost-of-living adjustment for Social Security
benefits in 2010.15
If the United States were to experience a sustained deflation, the income tax elements could be
reduced in real dollars. By law, however, the elements cannot fall below their base-year values.
Since their current values are much higher than their base values, which were established years
ago, it is unlikely this limitation will come into play anytime soon for most indexed elements.
15
For more information please see CRS Report R40561, Interactions Between the Social Security COLA and Medicare
Part B Premiums, by Jim Hahn.
Congressional Research Service
13
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Tax Rate Schedules for 1988 Through 2013
The following tables present the personal exemption amounts, standard deductions, and the
statutory marginal tax rates schedules for each tax year from 1988 through 2013.
Table 3. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1988
Personal Exemptions
$1,950
Standard Deductions
Joint
$5,000
Single
$3,000
Head of Household
$4,400
Additional Standard Deduction for the Elderly or the Blind
Joint
$600
Single/Head of Household
$750
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 to $29,750
15% of the amount over $0
over $29,750 to $71,900
$4,462.50 + 28% of the amount over $29,750
$16,264.50 + 33% of the amount over $71,900
over $71,900 to $171,090a
over $171,090
$47,905.20 + 28% of the amount over $171,090
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 to $17,850
15% of the amount over $0
over $17,850 to $43,150
$2,677.50 + 28% of the amount over $17,850
over $43,150 to $100,480a
$9,761.50 + 33% of the amount over $43,150
over $100,480
$28,134.40 + 28% of the amount over $100,480
Statutory Marginal Income Tax Rates, Head-of-Household Returns
If taxable income is:
$0 to $23,900
over $23,900 to $61,650
over $61,650 to $145,630a
over $145,630
a.
Then, tax is:
15% of the amount over $0
$3,585 + 28% of the amount over $23,900
$14,155 + 33% of the amount over $61,650
$40,776.40 + 28% of the amount over $145,630
Implicit tax bracket, generated by the “tax bubble,” as described in text. The bracket’s upper bound
depends on the number of exemptions claimed by the taxpayer. The example in this table assumes one
exemption for single returns, two for the other statuses.
Table 4. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1989
Personal Exemptions
$2,000
Standard Deductions
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14
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Joint
$5,200
Single
$3,100
Head of Household
$4,550
Additional Standard Deduction for the Elderly or the Blind
Joint
$600
Single/Head of Household
$750
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 to $30,950
15% of the amount over $0
over $30,950 to $ 74,850
$4,642.50 + 28% of the amount over $30,950
$16,934.50 + 33% of the amount over $74,850
over $ 74,850 to $177,720a
over $177,720
$50,881.60 + 28% of the amount over $177,720
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 to $18,550
15% of the amount over $0
over $18,550 to $ 44,900
over $44,900 to
$2,782.50 + 28% of the amount over $18,550
$10,160.50 + 33% of the amount over $44,900
$104,300a
over $104,300
$29,772.40 + 28% of the amount over $104,300
Statutory Marginal Income Tax Rates, Head-of-Household Returns
If taxable income is:
Then, tax is:
$0 to $24,850
15% of the amount over $0
over $24,850 to $ 64,200
$ 3,727.50 + 28% of the amount over $ 24,850
over $64,200 to $151,210a
$14,745.50 + 33% of the amount over $ 64,200
over $151,210
$43,458.80 + 28% of the amount over $151,210
a.
Implicit tax bracket, generated by the “tax bubble,” as described in text. The bracket’s upper bound
depends on the number of exemptions claimed by the taxpayer. The example in this table assumes one
exemption for single returns, two for the other statuses.
Table 5. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1990
Personal Exemptions
$2,050
Standard Deductions
Joint
$5,450
Single
$3,250
Head of Household
$4,750
Additional Standard Deductions for the Elderly or the Blind
Joint
$650
Single/Head of Household
$800
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Congressional Research Service
Then, tax is:
15
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
$0 to $32,450
15% of the amount over $0
over $32,450 to $78,400
over $78,400 to
$ ,867.50 + 28% of the amount over $32,450
$17,733.50 + 33% of the amount over $78,400
$185,730a
over $185,730
$53,152.40 + 28% of the amount over $185,730
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 to $19,450
15% of the amount over $0
over $19,450 to $47,050
$2,917.50 + 28% of the amount over $19,450
$10,645.50 + 33% of the amount over $47,050
over $47,050 to $109,100a
over $109,100
$31,122.00 + 28% of the amount over $109,100
Statutory Marginal Income Tax Rates, Head-of-Household Returns
If taxable income is:
Then, tax is:
$0 to $26,050
15% of the amount over $0
over $ 26,050 to $67,200
$3,907.50 + 28% of the amount over $26,050
over $67,200 to $157,890a
$15,429.50 + 33% of the amount over $67,200
over $157,890
a.
$45,357.20 + 28% of the amount over $157,890
Implicit tax bracket, generated by the “tax bubble,” as described in text. The bracket’s upper bound
depends on the number of exemptions claimed by the taxpayer. The example in this table assumes one
exemption for single returns, two for the other statuses.
Table 6. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1991
Personal Exemptions
$2,150
Standard Deductions
Joint
$5,700
Single
$3,400
Head of Household
$5,000
Additional Standard Deductions for the Elderly or the Blind
Joint
$650
Single/Head of Household
$850
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 to $34,000
15% of the amount over $0
over $34,000 to $82,150
$5,100 + 28% of the amount over $34,000
over $82,150
$18,582 + 31% of the amount over $82,150
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
$0 to $20,350
over $20,350 to $49,300
over $49,300
Congressional Research Service
Then, tax is:
15% of the amount over $0
$3,052.50 + 28% of the amount over $20,350
$11,158.50 + 31% of the amount over $ 49,300
16
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Statutory Marginal Income Tax Rates, Head-of-Household Returns
If taxable income is:
Then, tax is:
$0 to $27,300
15% of the amount over $0
over $27,300 - $70,450
$4,095 + 28% of the amount over $27,300
over $70,450
$16,177 + 31% of the amount over $70,450
Table 7. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1992
Personal Exemptions
$2,300
Standard Deductions
Joint
$6,000
Single
$3,600
Head of Household
$5,250
Additional Standard Deductions for the Elderly or the Blind
Joint
$700
Single/Head of Household
$900
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 to $35,800
15% of the amount over $0
over $35,800 to $86,500
$5,370 + 28% of the amount over $35,800
over $86,500
$19,566 + 31% of the amount over $86,500
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 - $21,450
15% of the amount over $0
over $21,450 to $51,900
$3,218 + 28% of the amount over $21,450
over $51,900
$11,744 + 31% of the amount over $51,900
Statutory Marginal Income Tax Rates, Head-of-Household Returns
If taxable income is:
$0 - $28,750
over $28,750 to $ 74,150
over $ 4,150
Congressional Research Service
Then, tax is:
15% of the amount over $0
$4,313 + 28% of the amount over $28,750
$17,235 + 31% of the amount over $74,150
17
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 8. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1993
Personal Exemptions
$2,350
Standard Deductions
Joint
$6,200
Single
$3,700
Head of Household
$5,450
Additional Standard Deductions for the Elderly or the Blind
Joint
$700
Single/Head of Household
$900
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 to $36,900
15% of the amount over $0
over $36,900 to $89,150
$5,535 + 28% of the amount over $36,900
over $89,150 to $140,000
$20,165 + 31% of the amount over $89,150
over $140,000 to $250,000
$35,929 + 36% of the amount over $140,000
over $250,000
$75,529 + 39.6% of the amount over $250,000
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 to $22,100
15% of the amount over $0
over $22,100 to $53,500
$3,315 + 28% of the amount over $22,100
over $53,500 to $115,000
$12,107 + 31% of the amount over $53,500
over $115,000 to $250,000
$31,172 + 36% of the amount over $115,000
over $250,000
$79,772 + 39.6% of the amount over $250,000
Statutory Marginal Income Tax Rates, Head-of-Household Returns
If taxable income is:
$0 to $29,600
Then, tax is:
15% of the amount over $0
over $29,600 to $76,400
$4,440 + 28% of the amount over $29,600
over$76,400 to $127,500
$17,544 + 31% of the amount over $76,400
over $127,500 to $250,000
over $250,000
Congressional Research Service
$33,385 + 36% of the amount over $127,500
$77,485 + 39.6% of the amount over $250,000
18
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 9. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1994
Personal Exemptions
$2,450
Standard Deductions
Joint
$6,350
Single
$3,800
Head of Household
$5,600
Additional Standard Deductions for the Elderly or the Blind
Joint
$750
Single/Head of Household
$950
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 to $38,000
15% of the amount over $0
over $38,000 to $91,850
$5,700 + 28% of the amount over $38,000
over $ 91,850 to $140,000
$20,778 + 31% of the amount over $91,850
over $140,000 to $250,000
$35,705 + 36% of the amount over $140,000
over $250,000
$75,305 + 39.6% of the amount over $250,000
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 to $22,750
15% of the amount over $0
over $22,750 to $55,100
$3,413 + 28% of the amount over $22,750
over $55,100 to $115,000
$12,471 + 31% of the amount over $55,100
over $115,000 to $250,000
$31,040 + 36% of the amount over $115,000
over $250,000
$79,640 + 39.6% of the amount over $250,000
Statutory Marginal Income Tax Rates, Head-of-Household Returns
If taxable income is:
$0 to $30,500
Then, tax is:
15% of the amount over $0
over $30,500 to $78,700
$4,575 + 28% of the amount over $30,500
over $78,700 to $127,500
$18,071 + 31% of the amount over $78,750
over $127,500 to $250,000
$33,199 + 36% of the amount over $127,500
over $250,000
Congressional Research Service
$77,299 + 39.6% of the amount over $250,000
19
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 10. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1995
Personal Exemptions
$2,500
Standard Deductions
Joint
$6,550
Single
$3,900
Head of Household
$5,750
Additional Standard Deductions for the Elderly or the Blind
Joint
$750
Single/Head of Household
$950
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 to $39,000
15% of the amount over $0
over $39,000 to $94,250
$5,850 + 28% of the amount over $39,000
over $94,250 to $143,600
$21,320 + 31% of the amount over $94,250
over $143,600 to $256,500
$36,619 + 36% of the amount over $143,600
over $256,500
$77,263 + 39.6% of the amount over $256,500
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 to $23,350
15% of the amount over $0
over $23,350 to $56,550
$3,503 + 28% of the amount over $23,350
over $56,550 to $117,950
$12,799 + 31% of the amount over $56,550
over $117,950 to $256,500
$31,833 + 36% of the amount over $117,950
over $256,500
$81,711 + 39.6% of the amount over $256,500
Statutory Marginal Income Tax Rates, Head-of-Household Returns
If taxable income is:
$0 to $31,250
Then, tax is:
15% of the amount over $0
over $31,250 to $80,750
$4,688 + 28% of the amount over $31,250
over $80,750 to $130,800
$18,548 + 31% of the amount over $80,750
over $130,800 to $256,500
$34,063 + 36% of the amount over $130,800
over $256,500
Congressional Research Service
$79,315 + 39.6% of the amount over $256,500
20
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 11. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1996
Personal Exemptions
$2,550
Standard Deductions
Joint
$6,700
Single
$4,000
Head of Household
$5,900
Additional Standard Deductions for the Elderly or the Blind
Joint
$800
Single/Head of Household
$1,000
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 to $40,100
15% of the amount over $0
over $40,100 to $96,900
$6,015 + 28% of the amount over $40,100
over $96,900 to $147,700
$21,919 + 31% of the amount over $96,900
over $147,700 to $263,750
$37,667 + 36% of the amount over $147,700
over $263,750
$79,445 + 39.6% of the amount over $263,750
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 to $24,000
15% of the amount over $0
over $24,000 to $58,150
$3,600 + 28% of the amount over $24,000
over $58,150 to $121,300
$13,162 + 31% of the amount over $58,150
over $121,300 to $263,750
$32,739 + 36% of the amount over $121,300
over $263,750
$84,021 + 39.6% of the amount over $263,750
Statutory Marginal Income Tax Rates, Head-of-Household Returns
If taxable income is:
$0 to $32,150
Then, tax is:
15% of the amount over $0
over $32,150 to $83,050
$4,823 + 28% of the amount over $32,150
over $83,050 to $134,500
$19,075 + 31% of the amount over $83,050
over $134,500 to $263,750
$35,025 + 36% of the amount over $134,500
over $263,750
Congressional Research Service
$81,555 + 39.6% of the amount over $263,750
21
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 12. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1997
Personal Exemptions
$2,650
Standard Deductions
Joint
$6,900
Single
$4,150
Head of Household
$6,050
Additional Standard Deductions for the Elderly or the Blind
Joint
$800
Single/Head of Household
$1,000
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 to $41,200
15% of the amount over $0
over $41,200 to $99,600
$6,180 + 28% of the amount over $41,200
over $99,600 to $151,750
$22,532 + 31% of the amount over $99,600
over $151,750 to $271,050
$38,699 + 36% of the amount over $151,750
over $271,050
$81,647 + 39.6% of the amount over $271,050
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 to $ 24,650
15% of the amount over $0
over $24,650 to $ 59,750
$3,698 + 28% of the amount over $24,650
over $59,750 to $ 124,650
$13,526 + 31% of the amount over $59,750
over $124,650 to $ 271,050
$33,645 + 36% of the amount over $124,650
over $271,050
$86,349 + 39.6% of the amount over $271,050
Statutory Marginal Income Tax Rates, Head-of-Household Returns
If taxable income is:
$0 to $33,050
Then, tax is:
15% of the amount over $0
over $33,050 to $83,350
$4,958 + 28% of the amount over $33,050
over $83,350 to $138,200
$19,602 + 31% of the amount over $85,350
over $138,200 to $271,050
$35,986 + 36% of the amount over $138,200
over $271,050
Congressional Research Service
$83,812 + 39.6% of the amount over $271,050
22
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 13. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1998
Personal Exemptions
$2,700
Standard Deductions
Joint
$7,100
Single
$4,250
Head of Household
$6,250
Additional Standard Deductions for the Elderly or the Blind
Joint
$850
Single/Head of Household
$1,050
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 to $42,350
15% of the amount over $0
over $42,350 to $102,300
$6,353 + 28% of the amount over $42,350
over $102,300 to $155,950
$23,139 + 31% of the amount over $102,300
over $155,950 to $278,450
$39,770 + 36% of the amount over $155,950
over $278,450
$83,870 + 39.6% of the amount over $278,450
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 to $25,350
15% of the amount over $0
over $25,350 to $61,400
$3,803 + 28% of the amount over $25,350
over $61,400 to $128,100
$13,897 + 31% of the amount over $61,400
over $128,100 to $278,450
$34,574 + 36% of the amount over $128,100
over $278,450
$88,700 + 39.6% of the amount over $278,450
Statutory Marginal Income Tax Rates, Head-of-Household Returns
If taxable income is:
$0 to $33,950
Then, tax is:
15% of the amount over $0
over $33,950 to $87,700
$5,093 + 28% of the amount over $33,950
over $87,700 to $142,000
$20,143 + 31% of the amount over $87,700
over $142,000 to $278,450
$36,976+ 36% of the amount over $142,000
over $278,450
Congressional Research Service
$86,098 + 39.6% of the amount over $278,450
23
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 14. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 1999
Personal Exemptions
$2,750
Standard Deductions
Joint
$7,200
Single
$4,300
Head of Household
$6,350
Additional Standard Deductions for the Elderly or the Blind
Joint
$850
Single/Head of Household
$1,050
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 to $43,050
15% of the amount over $0
over $43,050 to $104,050
$6,458 + 28% of the amount over $43,050
over $104,050 to $158,550
$23,538 + 31% of the amount over $104,050
over $158,550 to $283,150
$40,433 + 36% of the amount over $158,550
over $283,150
$85,289 + 39.6% of the amount over $283,150
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 to $25,750
15% of the amount over $0
over $25,750 to $62,450
$3,863 + 28% of the amount over $25,750
over $62,450 to $130,250
$14,139 + 31% of the amount over $62,450
over $130,250 to $283,150
$35,157 + 36% of the amount over $130,250
over $283,150
$90,201 + 39.6% of the amount over $283,150
Statutory Marginal Income Tax Rates, Head-of-Household Returns
If taxable income is:
$0 to $34,550
Then, tax is:
15% of the amount over $0
over $34,550 to $89,150
$5,183 + 28% of the amount over $34,550
over $89,150 to $144,400
$20,471 + 31% of the amount over $89,150
over $144,400 to $283,150
$37,598 + 36% of the amount over $144,440
over $283,150
Congressional Research Service
$87,548 + 39.6% of the amount over $283,150
24
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 15. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 2000
Personal Exemptions
$2,800
Standard Deductions
Joint
$7,350
Single
$4,400
Head of Household
$6,450
Additional Standard Deductions for the Elderly or the Blind
Joint
$850
Single/Head of Household
$1,100
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 to $43,850
15% of the amount over $0
over $43,850 to $105,950
$6,578 + 28% of the amount over $43,850
over $105,950 to $161,450
$23,966 + 31% of the amount over $105,950
over $161,450 to $288,350
$41,171 + 36% of the amount over $161,450
over $288,350
$86,855 + 39.6% of the amount over $288,350
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 to $26,250
15% of the amount over $0
over $26,250 to $63,550
$3,938 + 28% of the amount over $26,250
over $63,550 to $132,600
$14,382 + 31% of the amount over $63,550
over $132,600 to $288,350
$35,787 + 36% of the amount over $132,600
over $288,350
$91,857 + 39.6% of the amount over $288,350
Statutory Marginal Income Tax Rates, Head-of-Household Returns
If taxable income is:
$0 to $35,150
Then, tax is:
15% of the amount over $0
over $35,150 to $90,800
$5,273 + 28% of the amount over $35,150
over $90,800 to $147,050
$20,855 + 31% of the amount over $90,800
over $147,050 to $288,350
$38,292 + 36% of the amount over $147,050
over $288,350
Congressional Research Service
$89,160 + 39.6% of the amount over $288,350
25
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 16. Personal Exemptions, Standard Deductions, and Statutory Tax Rates, 2001
Personal Exemptions
$2,900
Standard Deductions
Joint
$7,600
Single
$4,550
Head of Household
$6,650
Additional Standard Deductions for the Elderly or the Blind
Joint
$900
Single/Head of Household
$1,100
Statutory Marginal Income Tax Rates, Joint Returns
If taxable income is:
Then, tax is:
$0 to $45,200
15% of the amount over $0
over $45,200 to $109,250
$6,780 + 27.5% of the amount over $45,200
over $109,250 to $166,500
$24,394 + 30.5% of the amount over $109,250
over $166,500 to $297,350
$41,855 + 35.5% of the amount over $166,500
over $297,350
$88,307 + 39.1% of the amount over $297,350
Statutory Marginal Income Tax Rates, Single Returns
If taxable income is:
Then, tax is:
$0 to $27,050
15% of the amount over $0
over $27,050 to $65,550
$4,058 + 27.5% of the amount over $27,050
over $65,550 to $136,750
$14,646 + 30.5% of the amount over $65,550
over $136,750 to $297,350
$36,362 + 35.5% of the amount over $136,750
over $297,350
$93,375 + 39.1% of the amount over $297,350
Statutory Marginal Income Tax Rates, Head-of-Household Returns
If taxable income is:
$0 to $36,250
Then, tax is:
15% of the amount over $0
over $36,250 to $93,650
$5,438 + 27.5% of the amount over $36,250
over $93,650 to $151,650
$21,223 + 30.5% of the amount over $93,650
over $151,650 to $297,350
$38,913 + 35.5% of the amount over $151,650
over $297,350
$90,637 + 39.1% of the amount over $297,350
Congressional Research Service
26
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 17. Personal Exemptions and
Standard Deductions, 2002
Personal Exemptions
$3,000
Standard Deductions:
Joint
$7,850
Single
$4,700
Head of Household
$6,900
Additional Standard Deductions for the Elderly or the Blind:
Joint
$900
Single/Head of Household
$1,150
Table 18. Statutory Marginal Tax Rates, 2002
Joint Returns
If taxable income is:
Then, tax is:
$0 to
to
$12,000
10% of the amount over $0
over $12,000
to
$46,700
$1,200 + 15% of the amount over $12,000
over $46,700
to
$112,850
$6,405 + 27% of the amount over $46,700
over $112,850
to
$171,950
$24,266 + 30% of the amount over $112,850
over $171,950
to
$307,050
$41,996 + 35% of the amount over $171,950
over $307,050
$89,281 + 38.6% of the amount over $307,050
Single Returns
If taxable income is:
Then, tax is:
$0
to
$6,000
10% of the amount over $0
over $6,000
to
$27,950
$600 + 15% of the amount over $6,000
over $27,950
to
$67,700
$3,893 + 27% of the amount over $27,950
over $67,700
to
$141,250
$14,626 + 30% of the amount over $67,700
over $141,250
to
$307,050
$36,691 + 35% of the amount over $141,250
over $307,050
$94,721 + 38.6% of the amount over $307,050
Head-of-Household Returns
If taxable income is:
Then, tax is:
$0
to
$10,000
10% of the amount over $0
over $10,000
to
$37,450
$1,000 + 15% of the amount over $10,000
over $37,450
to
$96,700
$5,118 + 27% of the amount over $37,450
over $96,700
to
$156,600
$21,116 + 30% of the amount over $96,700
over $156,600
to
$307,050
$39,086 + 35% of the amount over $156,600
over $307,050
Congressional Research Service
$91,744 + 38.6% of the amount over $307,050
27
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 19. Statutory Marginal Tax Rates, 2003 Under Prior Law
(prior to enactment of the Jobs and Growth Tax Relief Reconciliation Act)
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$12,000
10% of the amount over $0
over $12,000
to
$47,450
$1,200 + 15% of the amount over $12,000
over $47,450
to
$114,650
$6,518 + 27% of the amount over $47,450
over $114,650
to
$174,700
$24,662 + 30% of the amount over $114,650
over $174,700
to
$311,950
$42,677 + 35% of the amount over $174,700
over $311,950
$90,714 + 38.6% of the amount over $311,950
Standard Deduction for a joint return was $7,950
Single Returns
If taxable income is:
Then, tax is:
$0
to
$6,000
10% of the amount over $0
over $6,000
to
$28,400
$600 + 15% of the amount over $6,000
over $28,400
to
$68,800
$3,960 + 27% of the amount over $28,400
over $68,800
to
$143,500
$14,868 + 30% of the amount over $68,800
over $143,500
to
$311,950
$37,278 + 35% of the amount over $143,500
over $311,950
$96,236 + 38.6% of the amount over $311,950
Standard deduction for a single return is $4,750
Head-of-Household Returns
If taxable income is:
Then, tax is:
$0
to
$10,000
10% of the amount over $0
over $10,000
to
$38,050
$1,000 + 15% of the amount over $10,000
over $38,050
to
$98,250
$5,208 + 27% of the amount over $38,050
over $98,250
to
$159,100
$21,462 + 30% of the amount over $98,250
over $159,100
to
$311,950
$39,717 + 35% of the amount over $159,100
over $311,950
$93,214 + 38.6% of the amount over $311,950
Standard deduction for head of household return is $7,000
Congressional Research Service
28
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 20. Personal Exemptions and Standard Deductions, Limitation on Itemized
Deductions, and the Personal Exemption Phaseout, 2003
(after enactment of the Jobs and Growth Tax Relief Reconciliation Act)
Personal Exemptions
$3,050
Standard Deductions:
Joint
$9,500
Single
$4,750
Head of Household
$7,000
Additional Standard Deductions for the Elderly or the Blind and Limitation on Itemized Deductions:
Joint
$950
Single/Head of Household
$1,150
Limitation on itemized deductions:
$139,500
Phaseout of Personal Exemptions:
Joint
$209,250
Head of household
$174,400
Single
$139,500
Table 21. Statutory Marginal Income Tax Rates, 2003
(after enactment of the Jobs and Growth Tax Relief Reconciliation Act)
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$14,000
10% of the amount over $0
over $14,000
to
$56,800
$1,400 + 15% of the amount over $14,000
over $56,800
to
$114,650
$7,820 + 25% of the amount over $56,800
over $114,650
to
$174,700
$22,283 + 28% of the amount over $114,650
over $174,700
to
$311,950
$39,097 + 33% of the amount over $174,700
over $311,950
$84,390 + 35% of the amount over $311,950
Single Returns
If taxable income is:
Then, tax is:
$0
to
$7,000
10% of the amount over $0
over $7,000
to
$28,400
$700 + 15% of the amount over $7,000
over $28,400
to
$68,800
$3,910 + 25% of the amount over $28,400
over $68,800
to
$143,500
$14,010 + 28% of the amount over $68,800
over $143,500
to
$311,950
$34,926 + 33% of the amount over $143,500
over $311,950
Congressional Research Service
$90,515 + 35% of the amount over $311,950
29
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Head-of-Household Returns
If taxable income is:
Then, tax is:
$0
to
$10,000
10% of the amount over $0
over $10,000
to
$38,050
$1,000 + 15% of the amount over $10,000
over $38,050
to
$98,250
$5,208 + 25% of the amount over $38,050
over $98,250
to
$159,100
$20,258 + 28% of the amount over $98,250
over $159,100
to
$311,950
$37,296 + 33% of the amount over $159,100
over $311,950
$87,737 + 35% of the amount over $311,950
Table 22. Personal Exemptions and Standard Deductions, Limitation on Itemized
Deductions, and the Personal Exemption Phaseout, 2004
Personal Exemptions
$3,100
Standard Deductions:
Joint
$9,700
Single
$4,850
Head of Household
$7,150
Additional Standard Deductions for the Elderly or the Blind and Limitation on Itemized Deductions:
Joint
Single/Head of Household
Limitation on itemized deductions:
$950
$1,200
$142,700
Phaseout of Personal Exemptions:
Joint
$214,050
Head of household
$178,350
Single
$142,700
Congressional Research Service
30
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 23. Statutory Marginal Income Tax Rates, 2004
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$14,300
10% of the amount over $0
over $14,300
to
$58,100
$1,430 + 15% of the amount over $14,300
over $58,100
to
$117,250
$8,000 + 25% of the amount over $58,100
over $117,250
to
$178,650
$22,788 + 28% of the amount over $117,250
over $178,650
to
$319,100
$39,980 + 33% of the amount over $178,650
over $319,100
$86,328 + 35% of the amount over $319,100
Single Returns
If taxable income is:
Then, tax is:
$0
to
$7,150
10% of the amount over $0
over $7,150
to
$29,050
$715 + 15% of the amount over $7,150
over $29,050
to
$70,350
$4,000 + 25% of the amount over $29,050
over $70,350
to
$146,750
$14,325 + 28% of the amount over $70,350
over $146,750
to
$319,100
$35,717 + 33% of the amount over $146,750
over $319,100
$92,593 + 35% of the amount over $319,100
Head-of-Household Returns
If taxable income is:
Then, tax is:
$0
to
$10,200
10% of the amount over $0
over $10,200
to
$38,900
$1,020 + 15% of the amount over $10,200
over $38,900
to
$100,500
$5,325 + 25% of the amount over $38,900
over $100,500
to
$162,700
$20,725 + 28% of the amount over $100,500
over $162,700
to
$319,100
$38,141 + 33% of the amount over $162,700
over $319,100
Congressional Research Service
$89,753 + 35% of the amount over $319,100
31
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 24. Personal Exemptions, Standard Deductions, Limitation on Itemized
Deductions and the Personal Exemption Phaseout Thresholds, 2005
Personal Exemptions
$3,200
Standard Deductions:
Joint
$10,000
Single
$5,000
Head of Household
$7,300
Additional Standard Deductions for the Elderly or the Blind and Limitation on Itemized Deductions:
Joint (each spouse)
$1,000
Single/Head of Household
$1,250
Limitation on itemized deductions:
$145,950
Phaseout of Personal Exemptions:
Joint
$218,950
Head of household
$182,450
Single
$145,950
Table 25. Statutory Marginal Income Tax Rates, 2005
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$14,600
10% of the amount over $0
over $14,600
to
$59,400
$1,460 + 15% of the amount over $14,600
over $59,400
to
$119,950
$8,180 + 25% of the amount over $59,400
over $119,950
to
$182,800
$23,318 + 28% of the amount over $119,950
over $182,800
to
$326,450
$40,916 + 33% of the amount over $182,800
over $326,450
$88,321 + 35% of the amount over $326,450
Single Returns
If taxable income is:
Then, tax is:
$0
to
$7,300
10% of the amount over $0
over $7,300
to
$29,700
$730 + 15% of the amount over $7,300
over $29,700
to
$71,950
$4,090 + 25% of the amount over $29,700
over $71,950
to
$150,150
$14,653 + 28% of the amount over $71,950
over $150,150
to
$326,450
$36,549 + 33% of the amount over $150,150
over $326,450
Congressional Research Service
$94,728 + 35% of the amount over $326,450
32
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Head-of-Household Returns
If taxable income is:
Then, tax is:
$0
to
$10,450
10% of the amount over $0
over $10,450
to
$39,800
$1,045 + 15% of the amount over $10,450
over $39,800
to
$102,800
$5,448 + 25% of the amount over $39,800
over $102,800
to
$166,450
$21,198 + 28% of the amount over $102,800
over $166,450
to
$326,450
$39,020 + 33% of the amount over $166,450
over $326,450
$91,820 + 35% of the amount over $326,450
Table 26. Personal Exemptions, Standard Deductions, Limitation on Itemized
Deductions and the Personal Exemption Phaseout Thresholds, 2006
Personal Exemptions
$3,300
Standard Deductions:
Joint
$10,300
Single
$5,150
Head of Household
$7,550
Additional Standard Deductions for the Elderly or the Blind and Limitation on Itemized Deductions:
Joint (each spouse)
$1,000
Single/Head of Household
$1,250
Limitation on itemized deductions:
$150,500
Phaseout of Personal Exemptions:
Joint
$225,750
Head of household
$188,150
Single
$150,500
Congressional Research Service
33
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 27. Statutory Marginal Income Tax Rates, 2006
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$15,100
10% of the amount over $0
over $15,100
to
$61,300
$1,510 + 15% of the amount over $15,100
over $61,300
to
$123,700
$8,440 + 25% of the amount over $61,300
over $123,700
to
$188,450
$24,040 + 28% of the amount over $123,700
over $188,450
to
$336,550
$42,170 + 33% of the amount over $188,450
over $336,550
$91,043 + 35% of the amount over $336,550
Single Returns
If taxable income is:
Then, tax is:
$0
to
$7,550
10% of the amount over $0
over $7,550
to
$30,650
$755 + 15% of the amount over $7,550
over $30,650
to
$74,200
$4,220 + 25% of the amount over $30,650
over $74,200
to
$154,800
$15,108 + 28% of the amount over $74,200
over $154,800
to
$336,550
$37,676 + 33% of the amount over $154,800
over $336,550
$97,653 + 35% of the amount over $336,550
Head-of-Household Returns
If taxable income is:
Then, tax is:
$0
to
$10,750
10% of the amount over $0
over $10,750
to
$41,050
$1,075 + 15% of the amount over $10,750
over $41,050
to
$106,000
$5,620 + 25% of the amount over $41,050
over $106,000
to
$171,650
$21,858 + 28% of the amount over $106,000
over $171,650
to
$336,550
$40,240 + 33% of the amount over $171,650
over $336,550
Congressional Research Service
$94,657 + 35% of the amount over $336,550
34
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 28. Personal Exemptions, Standard Deductions, Limitation on Itemized
Deductions and the Personal Exemption Phaseout Thresholds, 2007
Personal Exemptions
$3,400
Standard Deductions:
Joint
$10,700
Single
$5,350
Head of Household
$7,850
Additional Standard Deductions for the Elderly or the Blind:
Joint (each spouse)
$1,050
Single/Head of Household
$1,300
Limitation on itemized deductions:
$156,400
Phaseout of Personal Exemptions:
Joint
$234,600
Head of household
$195,500
Single
$156,400
Table 29. Statutory Marginal Income Tax Rates, 2007
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$15,650
10% of the amount over $0
over $15,650
to
$63,700
$1,565 + 15% of the amount over $15,650
over $63,700
to
$128,500
$8,773 + 25% of the amount over $63,700
over $128,500
to
$195,850
$24,973 + 28% of the amount over $128,500
over $195,850
to
$349,700
$43,831 + 33% of the amount over $195,850
over $349,700
$94,601 + 35% of the amount over $349,700
Single Returns
If taxable income is:
Then, tax is:
$0
to
$7,825
10% of the amount over $0
over $7,825
to
$31,850
$783 + 15% of the amount over $7,825
over $31,850
to
$77,100
$4,386 + 25% of the amount over $31,850
over $77,100
to
$160,850
$15,699 + 28% of the amount over $77,100
over $160,850
to
$349,700
$39,149 + 33% of the amount over $160,850
over $349,700
Congressional Research Service
$101,469 + 35% of the amount over $349,700
35
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Head-of-Household Returns
If taxable income is:
Then, tax is:
$0
to
$11,200
10% of the amount over $0
over $11,200
to
$42,650
$1,120 + 15% of the amount over $11,200
over $42,650
to
$110,100
$5,838 + 25% of the amount over $42,650
over $110,100
to
$178,350
$22,700 + 28% of the amount over $110,100
over $178,350
to
$349,700
$41,810 + 33% of the amount over $178,350
over $349,700
$98,356 + 35% of the amount over $349,700
Table 30. Personal Exemptions, Standard Deductions, Limitation on Itemized
Deductions and the Personal Exemption Phaseout Thresholds, 2008
Personal Exemptions
$3,500
Standard Deductions:
Joint
$10,900
Single
$5,450
Head of Household
$8,000
Additional Standard Deductions for the Elderly or the Blind:
Joint (each spouse)
$1,050
Single/Head of Household
$1,350
Limitation on itemized deductions:
$159,950
Phaseout of personal exemptions:
Joint
$239,950
Head of household
$199,900
Single
$159,950
Congressional Research Service
36
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 31. Statutory Marginal Income Tax Rates, 2008
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$16,050
10% of the amount over $0
over $16,050
to
$65,100
$1,605 + 15% of the amount over $16,050
over $65,100
to
$131,450
$8,962.50 + 25% of the amount over $65,100
over $131,450
to
$200,300
$25,550 + 28% of the amount over $131,450
over $200,300
to
$357,700
$44,828 + 33% of the amount over $200,300
over $357,700
$96,770 + 35% of the amount over $357,700
Single Returns
If taxable income is:
Then, tax is:
$0
to
$8,025
10% of the amount over $0
over $8,025
to
$32,550
$802.50 + 15% of the amount over $8,025
over $32,550
to
$78,850
$4,481.25 + 25% of the amount over $32,550
over $78,850
to
$164,550
$16,056.25 + 28% of the amount over $78,850
over $164,550
to
$357,700
$40,052.25 + 33% of the amount over $164,550
over $357,700
$103,791.75 + 35% of the amount over $357,700
Head-of-Household Returns
If taxable income is:
Then, tax is:
$0
to
$11,450
10% of the amount over $0
over $11,450
to
$43,650
$1,145 + 15% of the amount over $11,450
over $43,650
to
$112,650
$5,975 + 25% of the amount over $43,650
over $112,650
to
$182,400
$23,225 + 28% of the amount over $112,650
over $182,400
to
$357,700
$42,755 + 33% of the amount over $182,400
over $357,700
Congressional Research Service
$100,604 + 35% of the amount over $357,700
37
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 32. Personal Exemptions, Standard Deductions, Limitation on Itemized
Deductions and the Personal Exemption Phaseout Thresholds, 2009
Personal Exemptions
$3,650
Standard Deductions:
Joint
$11,400
Single
$5,700
Head of Household
$8,350
Additional Standard Deductions for the Elderly or the Blind:
Joint (each spouse)
$1,100
Single/Head of Household
$1,400
Limitation on itemized deductions:
$166,800
Phaseout of personal exemptions:
Joint
$250,200
Head of household
$208,500
Single
$166,800
Table 33. Statutory Marginal Income Tax Rates, 2009
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$16,700
10% of the amount over $0
over $16,700
to
$67,900
$1,670 + 15% of the amount over $16,700
over $67,900
to
$137,050
$9,350 + 25% of the amount over $67,900
over $137,050
to
$208,850
$26,637.50 + 28% of the amount over $137,050
over $208,850
to
$372,950
$46,741.50 + 33% of the amount over $208,850
over $372,950
$100,894.50 + 35% of the amount over $372,950
Single Returns
If taxable income is:
Then, tax is:
$0
to
$8,350
10% of the amount over $0
over $8,350
to
$33,950
$835 + 15% of the amount over $8,350
over $33,950
to
$82,250
$4,675 + 25% of the amount over $33,950
over $82,250
to
$171,550
$16,750 + 28% of the amount over $82,250
over $171,550
to
$372,950
$41,754 + 33% of the amount over $171,550
over $372,950
Congressional Research Service
$108,216 + 35% of the amount over $372,950
38
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Head-of-Household Returns
If taxable income is:
Then, tax is:
$0
to
$11,950
10% of the amount over $0
over $11,950
to
$45,500
$1,195 + 15% of the amount over $11,950
over$45,500
to
$117,450
$6,227.50 + 25% of the amount over $45,500
over $117,450
to
$190,200
$24,215 + 28% of the amount over $117,450
over $190,200
to
$372,950
$44,585 + 33% of the amount over $190,200
over $372,950
$104,892.50 + 35% of the amount over $372,950
Table 34. Personal Exemptions, Standard Deductions, Limitation on Itemized
Deductions, and the Personal Exemption Phaseout Thresholds, 2010
Personal Exemptions
$3,650
Standard Deductions:
Joint
$11,400
Single
$5,700
Head of Household
$8,400
Additional Standard Deductions for the Elderly or the Blind:
Joint (each spouse)
$1,100
Single/Head of Household
$1,400
Limitation on itemized deductions:
Terminated on Dec. 31, 2009
Phaseout of personal exemptions:
Joint
Terminated on Dec. 31, 2009
Head of household
Terminated on Dec. 31, 2009
Single
Terminated on Dec. 31, 2009
Table 35. Statutory Marginal Income Tax Rates, 2010
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$16,750
10% of the amount over $0
over $16,750
to
$68,000
$1,675 + 15% of the amount over $16,750
over $68,000
to
$137,300
$9,362.50 + 25% of the amount over $68,000
over $137,300
to
$209,250
$26,687.50 + 28% of the amount over $137,300
over $209,250
to
$373,650
$46,833.50 + 33% of the amount over $209,250
over $373,650
Congressional Research Service
$100,894.50 + 35% of the amount over $373,650
39
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Single Returns
If taxable income is:
Then, tax is:
$0
to
$8,375
10% of the amount over $0
over $8,375
to
$34,000
$837.50 + 15% of the amount over $8,375
over $34,000
to
$82,400
$4,681.25 + 25% of the amount over $34,000
over $82,400
to
$171,850
$16,781.25 + 28% of the amount over $82,400
over $171,850
to
$373,650
$41,827.25 + 33% of the amount over $171,850
over $373,650
$108,421.25 + 35% of the amount over $373,650
Head-of-Household Returns
If taxable income is:
Then, tax is:
$0
to
$11,950
10% of the amount over $0
over $11,950
to
$45,550
$1,195 + 15% of the amount over $11,950
over $45,550
to
$117,650
$6,235 + 25% of the amount over $45,550
over $117,650
to
$190,550
$24,215 + 28% of the amount over $117,650
over $190,550
to
$373,650
$44,672 + 33% of the amount over $190,550
over $373,650
$105,095 + 35% of the amount over $373,650
Table 36. Personal Exemptions, Standard Deductions, Limitation on Itemized
Deductions, and the Personal Exemption Phaseout Thresholds, 2011
Personal Exemptions
$3,700
Standard Deductions:
Joint
$11,600
Single
$5,800
Head of Household
$8,500
Additional Standard Deduction for the Elderly or the Blind:
Joint (each spouse)
$1,150
Single/Head of Household
$1,450
Limitation on itemized deductions:
Terminated on Dec. 31, 2009
Phaseout of personal exemptions:
Joint
Terminated on Dec. 31, 2009
Head of household
Terminated on Dec. 31, 2009
Single
Terminated on Dec. 31, 2009
Congressional Research Service
40
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 37. Statutory Marginal Income Tax Rates, 2011
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$17,000
10% of the amount over $0
over $17,000
to
$69,000
$1,700 + 15% of the amount over $17,000
over $69,000
to
$139,350
$9,.500 + 25% of the amount over $69,000
over $139,350
to
$212,300
$27,087.50 + 28% of the amount over $139,350
over $212,300
to
$379,150
$47,513.50 + 33% of the amount over $212,300
over $379,150
$102,574 + 35% of the amount over $379,150
Single Returns
If taxable income is:
Then, tax is:
$0
to
$8,500
10% of the amount over $0
over $8,500
to
$34,500
$850 + 15% of the amount over $8,500
over $34,500
to
$83,600
$4,750 + 25% of the amount over $34,500
over $83,600
to
$174,400
$17,025 + 28% of the amount over $83,600
over $174,400
to
$379,150
$42,449 + 33% of the amount over $174,400
over $379,150
$110,016.50 + 35% of the amount over $379,150
Head-of-Household Returns
If taxable income is:
Then, tax is:
$0
to
$12,150
10% of the amount over $0
over $12,150
to
$46,250
$1,215 + 15% of the amount over $12,150
over $46,250
to
$119,400
$6,330 + 25% of the amount over $46,250
over $119,400
to
$193,350
$24,617.50 + 28% of the amount over $119,400
over $193,350
to
$379,150
$45,322.50 + 33% of the amount over $193,350
over $379,150
Congressional Research Service
$106,637.50 + 35% of the amount over $379,150
41
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 38. Personal Exemptions, Standard Deductions, Limitation on Itemized
Deductions, and the Personal Exemption Phaseout Thresholds, 2012
Personal Exemptions
$3,800
Standard Deductions:
Joint
$11,900
Single
$5,950
Head of Household
$8,700
Additional Standard Deduction for the Elderly or the Blind:
Joint (each spouse)
$1,150
Single/Head of Household
$1,450
Limitation on itemized deductions:
Terminated on Dec. 31, 2009
Phaseout of personal exemptions:
Joint
Terminated on Dec. 31, 2009
Head of household
Terminated on Dec. 31, 2009
Single
Terminated on Dec. 31, 2009
Table 39. Statutory Marginal Income Tax Rates, 2012
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$17,400
10% of the amount over $0
over $17,400
to
$70,700
$1,700 + 15% of the amount over $17,000
over $70,700
to
$142,700
$9,500 + 25% of the amount over $69,000
over $142,700
to
$217,450
$27,087.50 + 28% of the amount over $139,350
over $217,450
to
$388,350
$47,513.50 + 33% of the amount over $212,300
over $388,350
$102,574 + 35% of the amount over $379,150
Single Returns
If taxable income is:
Then, tax is:
$0
to
$8,700
10% of the amount over $0
over $8,700
to
$35,350
$850 + 15% of the amount over $8,500
over $35,350
to
$85,650
$4,750 + 25% of the amount over $34,500
over $85,650
to
$178,650
$17,025 + 28% of the amount over $83,600
over $178,650
to
$388,350
$42,449 + 33% of the amount over $174,400
over $388,350
Congressional Research Service
$110,016.50 + 35% of the amount over $379,150
42
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Head-of-Household Returns
If taxable income is:
Then, tax is:
$0
to
$12,400
10% of the amount over $0
over $12,400
to
$47,350
$1,215 + 15% of the amount over $12,150
over $47,350
to
$122,300
$6,330 + 25% of the amount over $46,250
over $122,300
to
$198,050
$24,617.50 + 28% of the amount over $119,400
over $198,050
to
$388,350
$45,322.50 + 33% of the amount over $193,350
over $388,350
$106,637.50 + 35% of the amount over $379,150
Table 40. Personal Exemptions, Standard Deductions, Limitation on Itemized
Deductions, and the Personal Exemption Phaseout Thresholds, 2013
Personal
Exemptions
$3,900
Standard Deductions:
Joint
$12,200
Single
$6,100
Head of Household
$8,950
Additional Standard Deduction for the Elderly or the Blind:
Joint (each spouse)
$1,200
Single/Head of
Household
$1,500
Limitation on
Itemized
Deductions:
Reduction in itemized deduction equal to the lesser of 3% of the excess of
adjusted gross income above the following threshold amount, or 80% of the
amount of itemized deductions otherwise allowable:
Joint
$300,000
Head of Household
$275,000
Single
$250,000
Phaseout of
personal
exemptions:
Complete phaseout occurs at the following adjusted gross incomes:
Joint
$422,501
Head of household
$397,501
Single
$372,501
Tax on Net
Investment
Income:
3.8% of the lesser of any excess of gross income from interest, dividends,
annuities, royalties, rents, and net capital gains over allowable deductions for this
income, or the amount of modified adjusted gross income above the following
threshold amounts:
Joint
$250,000
Head of Household
$200,000
Single
$125,000
Congressional Research Service
43
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Table 41. Statutory Marginal Income Tax Rates, 2013
Joint Returns
If taxable income is:
Then, tax is:
$0
to
$17,850
10% of the amount over $0
over $17,850
to
$72,500
$1,785 + 15% of the amount over $17,850
over $72,500
to
$146,400
$9,982.50 + 25% of the amount over $72,500
over $146,400
to
$223,050
$28,457.50 + 28% of the amount over $146,400
over $223,050
to
$398,350
$49,919.50 + 33% of the amount over $223,050
over $398,350
to
$450,000
$107,768.50 + 35% of the amount over $398,350
over $450,000
$125,846 + 39.6% of the amount over $50,000
Single Returns
If taxable income is:
Then, tax is:
$0
to
$8,925
10% of the amount over $0
over $8,925
to
$36,250
$892.50 + 15% of the amount over $8,925
over $36,250
to
$87,850
$4,991.25 + 25% of the amount over $36,250
over $87,850
to
$183,250
$17,891.25 + 28% of the amount over $87,850
over $183,250
to
$398,350
$44,603.25 + 33% of the amount over $183,250
over $398,350
to
$400,000
$115,586.25 + 35% of the amount over $398,350
over $400,000
$116,163.75 + 39.6% of the amount over$400,000
Head-of-Household Returns
If taxable income is:
Then, tax is:
$0
to
$12,750
10% of the amount over $0
over $12,750
to
$48,600
$1,275 + 15% of the amount over $12,750
over $48,600
to
$125,450
$6,652.50 + 25% of the amount over $48,600
over $125,450
to
$203,150
$25,865 + 28% of the amount over $125,450
over $203,150
to
$398,350
$47,621 + 33% of the amount over $203,150
over $398,350
to
$425,000
$112,037 + 35% of the amount over $398,350
over $425,000
$121,364.50 + 39.6% of the amount over $425,000
Author Contact Information
Gary Guenther
Analyst in Public Finance
gguenther@crs.loc.gov, 7-7742
Congressional Research Service
44
Individual Income Tax Rates and Other Elements of the Tax System: 1988 to 2013
Acknowledgments
Greg Esenwein, a former CRS analyst, was the original author of this report. Max Shvedov, another former
CRS analyst, also made significant contributions to it.
Congressional Research Service
45