In researching the debate over whether or not to let the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA, otherwise known as the "Bush tax cuts") expire for the top two tax brackets, I found an error in a report by the Joint Committee on Taxation (a nonpartisan, joint--that is, both House and Senate--committee charged with analyzing tax policy):
JCT's comprehensive report, Description of Revenue Provisions Contained in the President’s Fiscal Year 2011 Budget Proposal (JCS-2-10) of 16 August 2010, lists the proposed 2011 tax brackets for Married Couples Filing Jointly and Married Couples Filing Separately at $69,700 and $34,850 respectively for the upper end of the 15% tax bracket (p. 29).
However, another (much-quoted) report, Present Law and the President’s Fiscal Year 2011 Budget Proposals Related to Selected Individual Income Tax Provisions Scheduled to Expire Under the Sunset Provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (JCX-36-10) of 12 July 2010, lists these upper limits as $58,200 and $29,100 respectively (p. 9)...which is odd since that would mean the numbers shifted downwards compared to 2010, which would only happen if there was deflation. (In most cases, the brackets for each tax rate are set by the IRS based on the Consumer Price Index of inflation.)
I'm still waiting to hear back from the JCT to confirm that the comprehensive report has the correct numbers. It turns out that the error does not have any bearing on the current debate, however!
Obama Tax Calculator
I noticed the error described above while developing a Projected 2011 Tax Calculator which compares what a person would pay in taxes in 2010 (under current tax policy, including the EGTRRA or "Bush tax cuts") and 2011 (under the Obama Administration's proposal to let EGTRRA expire for the top two tax brackets, but extend it for the other brackets). Only later did I learn that NPR beat me to the punch with their much nicer calculator, which compares more apples-to-apples: what 2011 tax rates would be under full extension of EGTRRA, under the Obama plan, and allowing all EGTRAA to expire. I suppose that both calculators are useful: the NPR one is better for comparing policy options, and mine is better for a taxpayer interested in how rates might change from year to year. Mine also allows you to check my math (or make your own tax policy)!
Of note: neither calculator accounts for deductions, the Alternative Minimum Tax (AMT), or other non-wage income (e.g. dividends and capital gains), all of which also have proposed changes. Until I created the calculator, I didn't realize how tax brackets were "stepped," such that each bracket's tax percentage only applies to income in that bracket: for example, everybody (even a millionaire) gets taxed at 10% (the lowest rate) for the first $8-16k. The Center on Budget and Policy Priorities (a left-leaning but respected fiscal policy think tank) thus rightly points out that tax cuts for the working poor and middle class actually end up helping rich people, too.
Update: the Tax Foundation (a nominally "non-partisan" but actually right-leaning think tank...basically the mirror image of the CBPP) also has an excellent, detailed tax calculator that allows you to input the deductions, etc. that NPR and I ignore. Designed by Nick Kasprak, the calculator allows you to compare and contrast full expiration versus full extension of EGTRRA, as well as both the Obama Administration's plan and a similar plan advanced by House Democrats.
"(Minor) Error in Congressional Report...and Obama Tax Calculator"
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