One look at the Bush Tax Cuts

I recently posted a WSJ article on my facebook page which has spurred some discussion among my friends. I always enjoy a good discussion!

The big news of the day is the expiration of the ’01 and ’03 tax cuts at the end of the year, absent Congressional action. So, I decided to dive into the data. I went on tax stats, and downloaded the Individual Complete Report (Publication 1304), Table 1.2 for tax years 1996, 1999, 2002, and 2006.

For the purposes of the charts below, I used the number of returns filed each year based on categories of adjusted gross income, or AGI. Not to spend too much of my lunch time on it, I just chose to use single filers, the data of which is in column 40 and later 66 (for the ’06 data.)

The smallest category was $1 to $5,000 in adjusted gross income, and the highest category was $1,000,000 or more (in ’06 it broke things down into even higher categories, but for the purposes of exercise, I totaled them as $1,000,000 or more.)

I made a few line graph charts showing the relative percentage of each of the four categories below as a percentage of all returns filed for the category of single filers.

$1 under $25,000
$25,000 under $100,000
$100,000 under $1,000,000
$1,000,000 or more…..

To the charts:

Now, as you’ll see in chart 1, the percentage of single filers whose AGI was between $1 and under $25k decreased, almost relative to the percentage of filers whose AGI was between $25k and under $100k increased.

The $1 and under $25k category represented about 73% of all single filers in 1996, but comprised about 64% of filers in 2006, a drop of nearly 9%.

The $25k and under $100k category represented about 25% of all single filers in 1996, and as of 2006, it represented about 37%, an increase of nearly 12%.

(Keep in mind that number of filers increased in this category from 52.3 million in 1996 to 61.8 million in 2006.)

Similarly, those filers who make over $100k but under $1 million increased by about 2% between 1996 and 2006, moving from just over 1% in 1996, to just over 3% in 2006.

Those who made over a million dollars, as single filers, represented about .03% of the returns in the single filer category in 1996. In 2006, this figure more than doubled, representing about .07% of single filers.

In conclusion, you can add the whole “correlation does not equal causation” disclaimer, blah, blah, blah. This is just my analysis of the numbers with regard to percentage of returns filed among single filers in these given two years in Clinton administration, 1996 and 1999, and two years in the Bush administration after the ’01 and ’03 tax cuts.

One last disclaimer, this is only for the single filers category for individual income taxes. I picked this category because it was easier than married couples filing jointly, and would have less baggage in terms of what the changes in data might mean.

Hope my lunch exercise was of interest to you. Data is here (xls).

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