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EFFECTS OF CHANGES IN TAXES AND BENEFIT PAYMENTS RESULTING FROM THE TAX EQUITY AND FISCAL RESPONSIBILITY ACT OF 1982, FOR HOUSEHOLDS IN DIFFERENT INCOME CATEGORIES
 
 
Staff Memorandum
 
 
July 1982
 
 
Prepared by the Staffs of the
Human Resources and Community Development Division
and the Tax Analysis Division

Congressional Budget Office
 
 
Pursuant to the Request of
Senator Ernest F. Hoilings
Ranking Minority Member
Senate Committee on the Budget
 
 

This study was prepared by the staffs of the Human Resources and Community Development Division and the Tax Analysis Division of the Congressional Budget Office, under the supervision of Nancy M. Gordon, Assistant Director for Human Resources and Community Development and James M. Verdier, Assistant Director for Tax Analysis. Questions regarding the analysis may be addressed to Patricia Ruggles or Joseph Minarik.
 
 


INTRODUCTION

This memorandum discusses the impact on households in different income categories of the changes in personal income and excise taxes and in benefit payments for individuals proposed in the Tax Equity and Fiscal Responsibility Act of 1982, as reported out by the Senate Committee on Finance.1 The analysis closely resembles that in a Congressional Budget Office (CBO) memorandum dated February 1982, which estimated the distributional impact of the tax and benefit reductions enacted in 1981. A more detailed presentation of general definitions and limitations, along with further discussion of the methodological problems associated with such estimates, may be found in that memorandum.

Like the earlier one, this memorandum concentrates on those changes in taxes and benefits that would directly affect household incomes. Thus, while proposed changes in the personal income tax, in excise taxes, and in benefit payments for individuals are estimated for households in various income categories, changes in business taxes and in federal expenditures other than for benefits to households are not considered. Although these changes will eventually affect household incomes, their immediate impact cannot be estimated based on the data available. In addition, no attempt has been made to take into account the possible macroeconomic effects of the proposed tax and benefit changes.

This document is available in its entirety in PDF.

1. These estimates are based on the bill as reported to the Senate by the Committee on Finance on July 19, 1982. The provisions estimated here were the same in that version of the bill and in the version passed by the Senate on July 22, however.