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|
SPONSOR: |
Larranaga |
DATE TYPED: |
|
HB |
54 |
||
|
SHORT TITLE: |
Reduce Income Tax Rates |
SB |
|
||||
|
|
ANALYST: |
Smith |
|||||
REVENUE
|
Estimated Revenue |
Recurring or
Non-Rec |
Fund Affected |
|||
|
FY04 |
FY05 |
FY06 |
FY07 |
|
|
|
(38,900.0) |
(119,520.0) |
(245,400.0) |
(382,703.0) |
Recurring |
General
Fund |
|
|
|
|
|
|
|
(Parenthesis
( ) Indicate Revenue Decreases)
Conflicts with HB-167, SB 167, SB 226 and SB 238
Responses
Received From
TRD
SUMMARY
Synopsis
of Bill
House Bill 54 would
reduce
·
In
tax year 2003: 7.2%;
·
In
tax year 2004: 6.2%;
·
In
tax year 2005: 5.2%; and
·
In
tax year 2006 and after: 4.2%.
Significant Issues
TRD has provided the following rate table.
Current
and Proposed Personal Income Tax Rates
|
Current |
Joint |
Single |
Separate |
Head of Household |
||||
|
|
Taxable Income |
Taxable Income |
Taxable Income |
Taxable Income |
||||
|
Rate (%) |
From |
to |
From |
to |
From |
to |
From |
to |
|
1.7 |
0 |
8,000 |
0 |
5,500 |
0 |
4,000 |
0 |
7,000 |
|
3.2 |
8,001 |
16,000 |
5,501 |
11,000 |
4,001 |
8,000 |
7,001 |
14,000 |
|
4.7 |
16,001 |
24,000 |
11,001 |
16,000 |
8,001 |
12,000 |
14,001 |
20,000 |
|
6 |
24,001 |
40,000 |
16,001 |
26,000 |
12,001 |
20,000 |
20,001 |
33,000 |
|
7.1 |
40,001 |
64,000 |
26,001 |
42,000 |
20,001 |
32,000 |
33,001 |
53,000 |
|
7.9 |
64,001 |
100,000 |
42,001 |
65,000 |
32,001 |
50,000 |
53,001 |
83,000 |
|
8.2 |
101,000 |
& above |
65,001 |
& above |
50,001 |
& above |
83,001 |
& above |
|
|
|
|
|
|
|
|
|
|
|
Proposed |
Joint |
Single |
Separate |
Head of Household |
||||
|
Tax Year 2003 |
Taxable Income |
Taxable Income |
Taxable Income |
Taxable Income |
||||
|
Rate (%) |
From |
to |
From |
to |
From |
to |
From |
to |
|
1.7 |
0 |
8,000 |
0 |
5,500 |
0 |
4,000 |
0 |
7,000 |
|
3.2 |
8,001 |
16,000 |
5,501 |
11,000 |
4,001 |
8,000 |
7,001 |
14,000 |
|
4.7 |
16,001 |
24,000 |
11,001 |
16,000 |
8,001 |
12,000 |
14,001 |
20,000 |
|
6 |
24,001 |
40,000 |
16,001 |
26,000 |
12,001 |
20,000 |
20,001 |
33,000 |
|
7.1 |
40,001 |
64,000 |
26,001 |
42,000 |
20,001 |
32,000 |
33,001 |
53,000 |
|
7.2 |
64,001 |
& above |
42,001 |
& above |
32,001 |
& above |
53,001 |
& above |
|
|
|
|
|
|
|
|
|
|
|
Proposed |
Joint |
Single |
Separate |
Head of Household |
||||
|
Tax Year 2004 |
Taxable Income |
Taxable Income |
Taxable Income |
Taxable Income |
||||
|
Rate (%) |
From |
to |
From |
to |
From |
to |
From |
to |
|
1.7 |
0 |
8,000 |
0 |
5,500 |
0 |
4,000 |
0 |
7,000 |
|
3.2 |
8,001 |
16,000 |
5,501 |
11,000 |
4,001 |
8,000 |
7,001 |
14,000 |
|
4.7 |
16,001 |
24,000 |
11,001 |
16,000 |
8,001 |
12,000 |
14,001 |
20,000 |
|
6 |
24,001 |
40,000 |
16,001 |
26,000 |
12,001 |
20,000 |
20,001 |
33,000 |
|
6.2 |
40,001 |
& above |
26,001 |
& above |
20,001 |
& above |
33,001 |
& above |
|
|
|
|
|
|
|
|
|
|
|
Proposed |
Joint |
Single |
Separate |
Head of Household |
||||
|
Tax Year 2005 |
Taxable Income |
Taxable Income |
Taxable Income |
Taxable Income |
||||
|
Rate (%) |
From |
to |
From |
to |
From |
to |
From |
to |
|
1.7 |
0 |
8,000 |
0 |
5,500 |
0 |
4,000 |
0 |
7,000 |
|
3.2 |
8,001 |
16,000 |
5,501 |
11,000 |
4,001 |
8,000 |
7,001 |
14,000 |
|
4.7 |
16,001 |
24,000 |
11,001 |
16,000 |
8,001 |
12,000 |
14,001 |
20,000 |
|
5.2 |
24,001 |
& above |
16,001 |
& above |
12,001 |
& above |
20,001 |
& above |
|
|
|
|
|
|
|
|
|
|
|
Proposed |
Joint |
Single |
Separate |
Head of Household |
||||
|
Tax Year 2006 |
Taxable Income |
Taxable Income |
Taxable Income |
Taxable Income |
||||
|
Rate (%) |
From |
to |
From |
to |
From |
to |
From |
to |
|
1.7 |
0 |
8,000 |
0 |
5,500 |
0 |
4,000 |
0 |
7,000 |
|
3.2 |
8,001 |
16,000 |
5,501 |
11,000 |
4,001 |
8,000 |
7,001 |
14,000 |
|
4.2 |
16,001 |
24,000 |
11,001 |
16,000 |
8,001 |
12,000 |
14,001 |
20,000 |
TECHNICAL ISSUES
TRD notes a drafting error on page 2, line 23. The current language stipulates a rate of
7.9%, but this is probably intended to be 7.2%.
Estimates in this report were based on the 7.2 percent figure.
OTHER SUBSTANTIVE ISSUES
TRD
has provided a table showing the amount of relief by income and filing status.
|
Table 2: Effects of
Proposed Tax Reduction by Taxable Income and Filing Status |
|||||||||||||
|
(Millions of Dollars) |
|||||||||||||
|
|
Tax Year 2003 |
Tax Year 2004 |
Tax Year 2005 |
Tax Year 2006 |
|||||||||
|
Filing
Status |
Present Law Liability |
Proposed Law Liability |
Decrease
in Tax |
Present Law Liability |
Proposed Law Liability |
Decrease
in Tax |
Present Law Liability |
Proposed Law Liability |
Decrease
in Tax |
Present Law Liability |
Proposed Law Liability |
Decrease
in Tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Married
Filing Joint |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
Income ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
to 8,000 |
2.0 |
2.0 |
|
2.1 |
2.1 |
|
2.2 |
2.2 |
|
2.3 |
2.3 |
|
|
|
8,001
to 16,000 |
9.4 |
9.4 |
|
10.0 |
10.0 |
|
10.7 |
10.7 |
|
11.5 |
11.4 |
(0.1) |
|
|
16,001
to 24,000 |
18.2 |
18.2 |
|
19.6 |
19.6 |
|
21.0 |
20.8 |
(0.2) |
22.6 |
20.8 |
(1.8) |
|
|
24,001
to 40,000 |
76.2 |
76.2 |
|
81.4 |
81.1 |
(0.4) |
86.9 |
80.2 |
(6.8) |
92.9 |
74.4 |
(18.5) |
|
|
40,001
to 64,000 |
159.2 |
159.0 |
(0.1) |
169.3 |
160.0 |
(9.3) |
179.7 |
150.2 |
(29.5) |
191.2 |
134.0 |
(57.3) |
|
|
64,001
to 100,000 |
165.9 |
161.2 |
(4.7) |
175.7 |
155.0 |
(20.6) |
185.7 |
141.6 |
(44.2) |
196.7 |
123.7 |
(73.1) |
|
|
100,001 and over |
291.7 |
266.8 |
(24.9) |
306.4 |
246.3 |
(60.1) |
321.5 |
219.3 |
(102.2) |
337.8 |
187.8 |
(150.1) |
|
|
Total |
722.5 |
692.8 |
(29.7) |
764.4 |
674.1 |
(90.3) |
807.8 |
624.9 |
(182.9) |
855.1 |
554.3 |
(300.8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Single |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
Income ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
to 5,500 |
5.6 |
5.6 |
|
5.9 |
5.9 |
|
6.3 |
6.3 |
|
6.7 |
6.7 |
|
|
|
5,500 to 11,000 |
19.5 |
19.5 |
|
20.9 |
20.9 |
|
22.4 |
22.2 |
(0.2) |
24.2 |
24.2 |
|
|
|
11,000 to 16,000 |
27.9 |
27.9 |
|
29.8 |
29.8 |
|
31.8 |
29.7 |
(2.1) |
34.1 |
34.1 |
0.002 |
|
|
16,000
to 26,000 |
57.1 |
57.1 |
|
60.8 |
58.0 |
(2.8) |
64.7 |
54.9 |
(9.8) |
68.9 |
52.9 |
(16.0) |
|
|
26,000
to 42,000 |
47.2 |
46.1 |
(1.1) |
50.0 |
44.5 |
(5.5) |
52.9 |
40.8 |
(12.1) |
56.2 |
41.5 |
(14.6) |
|
|
42,000
to 65,000 |
27.2 |
25.6 |
(1.6) |
28.7 |
24.1 |
(4.6) |
30.2 |
21.7 |
(8.5) |
31.9 |
22.0 |
(9.9) |
|
|
65,000 and over |
48.2 |
43.5 |
(4.7) |
50.5 |
39.8 |
(10.7) |
52.9 |
35.2 |
(17.7) |
55.5 |
35.5 |
(20.0) |
|
|
Total |
232.7 |
225.3 |
(7.4) |
246.8 |
223.1 |
(23.7) |
261.3 |
210.8 |
(50.5) |
277.4 |
216.8 |
(60.7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Separate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
Income ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 to 4,000 |
0.0 |
0.0 |
|
0.0 |
0.0 |
|
0.0 |
0.0 |
|
0.0 |
0.0 |
|
|
|
4,000 to
8,000 |
0.1 |
0.1 |
|
0.1 |
0.1 |
|
0.1 |
0.1 |
|
0.1 |
0.1 |
|
|
|
8,000 to 12,000 |
0.2 |
0.2 |
|
0.3 |
0.2 |
|
0.3 |
0.3 |
|
0.3 |
0.3 |
|
|
|
12,000
to 20,000 |
1.0 |
1.0 |
|
1.1 |
1.1 |
|
1.1 |
1.1 |
(0.1) |
1.2 |
1.0 |
(0.2) |
|
|
20,000
to 32,000 |
1.8 |
1.8 |
|
1.9 |
1.8 |
(0.1) |
2.0 |
1.7 |
(0.3) |
2.1 |
1.5 |
(0.6) |
|
|
32,000
to 50,000 |
1.8 |
1.7 |
(0.1) |
1.9 |
1.6 |
(0.2) |
2.0 |
1.5 |
(0.5) |
2.1 |
1.3 |
(0.8) |
|
|
50,000 and over |
6.3 |
5.7 |
(0.6) |
6.6 |
5.2 |
(1.4) |
6.9 |
4.6 |
(2.3) |
7.2 |
3.9 |
(3.3) |
|
|
Total |
11.2 |
10.5 |
(0.7) |
11.8 |
10.1 |
(1.7) |
12.4 |
9.2 |
(3.2) |
13.1 |
8.1 |
(5.0) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Head
of Household |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
Income ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 to
7,000 |
1.7 |
1.7 |
|
1.8 |
1.8 |
|
1.9 |
1.9 |
|
2.0 |
2.0 |
|
|
|
7,000 to
14,000 |
4.7 |
4.7 |
|
5.0 |
5.0 |
|
5.3 |
5.3 |
|
5.7 |
5.7 |
|
|
|
14,000 to 20,000 |
6.0 |
6.0 |
|
6.5 |
6.5 |
|
7.0 |
6.9 |
(0.1) |
7.5 |
6.9 |
(0.6) |
|
|
20,000
to 33,000 |
11.5 |
11.5 |
|
12.3 |
12.2 |
|
13.1 |
12.1 |
(1.0) |
14.0 |
11.3 |
(2.7) |
|
|
33,000
to 53,000 |
12.3 |
12.3 |
|
13.1 |
12.4 |
(0.7) |
13.9 |
11.7 |
(2.2) |
14.8 |
10.4 |
(4.3) |
|
|
53,000
to 83,000 |
7.2 |
7.0 |
(0.2) |
7.6 |
6.7 |
(0.9) |
8.0 |
6.1 |
(1.9) |
8.5 |
5.3 |
(3.2) |
|
|
83,00 and over |
10.3 |
9.4 |
(0.9) |
10.8 |
8.7 |
(2.2) |
11.4 |
7.7 |
(3.7) |
11.9 |
6.6 |
(5.4) |
|
|
Total |
53.6 |
52.5 |
(1.1) |
57.0 |
53.2 |
(3.8) |
60.6 |
51.7 |
(8.9) |
64.4 |
48.2 |
(16.2) |
|
SS/njw