|
Civic Report
No. 43 August 2004
The $36 Billion Bonus
New York’s Gains from Federal Tax Cuts
Appendix A: Methodology
The estimates of direct individual tax impacts contained in this report were produced using a microsimulation model developed by the Manhattan Institute and Fiscal Economics, Inc. of Alexandria, Virginia. This model uses a large database of tax return data available from the Internal Revenue Service as well as information from the Congressional Budget Office, New York State Department of Taxation and Finance, and New York City to calculate all of the income and demographic variables needed to compute the federal income tax liabilities for statistically representative samples of the national, New York State, and New York City filing populations for each year out to 2014.
Once income and demographic data have been calculated for each observation in the samples, the model uses a tax calculation program to compute federal income tax liabilities under various regimes. Estimates of tax savings resulting from enactment of the Bush tax cuts, for example, were made by first computing a baseline estimate that assumed that federal tax law as it existed in 2000 had remained in place through 2010. These estimates were then compared against a policy estimate that took into account the various provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA). Estimates of tax revenues and changes for future years are based on the baseline national economic projections used by the Congressional Budget Office.
Estimates of changes in tax liabilities resulting from enactment of the tax proposals put forward by John Kerry were made in a similar fashion. In this case, a baseline estimate was made by assuming that the tax law as it currently exists remains in place through 2010. This estimate was then compared against a policy estimate that assumed that the Kerry tax proposals were fully enacted into law.
Appendix B: Federal Personal Income Tax Brackets
|
PRE–2001 LAW
|
2004 LAW
|
|
Single
|
|
For taxable incomes between
|
tax rate is
|
For taxable incomes between
|
tax rate is
|
|
0...
|
...29,050
|
15%
|
0...
|
...7,150
|
10%
|
|
29,050...
|
...70,350
|
28%
|
7,150...
|
...29,050
|
15%
|
|
70,350...
|
...146,750
|
31%
|
29,050...
|
...70,350
|
25%
|
|
146,750...
|
...319,100
|
36%
|
70,350...
|
...146,750
|
28%
|
|
Over 319,100
|
39.6%
|
146,750...
|
...319,100
|
33%
|
|
|
|
|
Over 319,100
|
35%
|
|
Married Filing Jointly
|
|
For taxable incomes between
|
tax rate is
|
For taxable incomes between
|
tax rate is
|
|
0...
|
...48,500
|
15%
|
0...
|
...14,300
|
10%
|
|
48,500...
|
...117,250
|
28%
|
14,300...
|
...58,100
|
15%
|
|
117,250...
|
...178,650
|
31%
|
58,100...
|
...117,250
|
25%
|
|
178,650...
|
...319,100
|
36%
|
117,250...
|
...178,650
|
28%
|
|
Over 319,100
|
39.6%
|
178,650...
|
...319,100
|
33%
|
|
|
|
|
Over 319,100
|
35%
|
|
Married Filing Separately
|
|
For taxable incomes between
|
tax rate is
|
For taxable incomes between
|
tax rate is
|
|
0...
|
...24,250
|
15%
|
0...
|
...7,150
|
10%
|
|
24,250...
|
...58,625
|
28%
|
7,150...
|
...24,250
|
15%
|
|
58,625...
|
...89,325
|
31%
|
24,250...
|
...58,625
|
25%
|
|
89,325...
|
...159,550
|
36%
|
58,625...
|
...89,325
|
28%
|
|
Over 159,550
|
39.6%
|
89,325...
|
...159,550
|
33%
|
|
|
|
|
Over 159,550
|
35%
|
|
Head of Household
|
|
For taxable incomes between
|
tax rate is
|
For taxable incomes between
|
tax rate is
|
|
0...
|
...38,900
|
15%
|
0...
|
...10,000
|
10%
|
|
38,900...
|
...100,500
|
28%
|
10,000...
|
...38,900
|
15%
|
|
100,500...
|
...162,700
|
31%
|
38,900...
|
...100,500
|
25%
|
|
162,700
|
...319,100
|
36%
|
100,500...
|
...162,700
|
28%
|
|
Over 319,100
|
39.6%
|
162,700...
|
...319,100
|
33%
|
|
|
|
|
Over 319,100
|
35%
|
|
Income thresholds for 2001 are adjusted to estimated 2004 dollar levels.
Sources: Internal Revenue Service (pre-2001), Manhattan Institute estimate (2004)
|
|
