Saturday, May 31, 2003
Who will get No - $0 - benefit from the new tax cuts? 8 million households
Five million taxpayers in the 10 percent bracket who have no children and no dividend or capital gains income. This group, which constitutes 89 percent of all single taxpayers in the lowest bracket, do not benefit from the expansion of the 10 percent bracket because they are already in it. They have no children, so they do not get the child credit, and they do not benefit from the law's relief for married couples. Members of this group, who make $9,300 to $13,800 a year, now pay up to $600 in income taxes.
Next, 2.5 million taxpayers in the head-of-household filing status — mostly single parents — who have a child over 16 and who are in the two lowest tax brackets. The study found that they will not receive a tax cut, even though they pay as much as $5,200 in income taxes, because the lowest bracket is not expanded for head-of-household filers under the new law. The child credit is not available, either, because of the age of the children.
Then, a half-million additional taxpayers at all income levels who will not benefit from the new law because they fall between the cracks. They include a childless married couple in the lowest tax bracket who itemize their deductions and cannot take advantage of the increased standard deduction for couples.
Finally, about 12,000 taxpayers making more than $200,000 will also receive no benefit because they have no dividend or capital gains income, and make too much money to take advantage of the increased exemptions from the alternative minimum tax in the law.