Selected historical and other data - Illustration

Statistics of Income Bulletin, Fall, 2003

[28] For 1980 and 1985 data, "taxable income" includes the "zero bracket amount," repealed effective 1987 and partially replaced by standard deductions, which were subtracted in computing taxable income. A standard deduction was similarly used prior to 1980. For the percentages of AGI used for the standard deduction and the limitation on the deduction, see Statistics of Income--Individual Income Tax Returns.

[29] Includes "alternative minimum tax" (AMT), starting with 2000. For previous years, AMT was excluded and was reflected only in "total income tax" (see in Table 1).

[30] Different tax rate structures for the regular income tax applied to Tax Years 1979-1981, 1982-1986, 1987, 1988-1990, 1991-1992, 19932000, and 2001. Indexing of tax rate boundaries for inflation was introduced, starting with 1985.

The preferential maximum tax rate on net long-term capital gains under "alternative tax" was revised over the years. Alternative tax was abolished, effective 1987, but a maximum capital gain tax rate less than the maximum regular tax rate continued to apply under certain conditions, starting with 1991; the maximum rate was further reduced, effective 1997. For additional information on changes affecting tax computations, see Table A of the appendix to the historical section of this report and Statistics of Income--Individual Income Tax Returns.

[31] Includes that portion of the "earned income credit" used to offset income tax before credits. See also footnotes 37 and 40. Earned income credit is shown below in Table 1.

[32] Includes credits not shown separately, such as the political contributions credit (repealed effective 1987), earned income credit (see below in Table 1; see also footnote 37), low-income housing credit (introduced effective 1987), child adoption credit (introduced effective 1997), and "empowerment zone employment" (EZE) credit (introduced effective 1994). For changes in credits allowed for earlier years, see Statistics of Income-Individual Income Tax Returns.

[33] Allowable credit per child was increased, starting with 1999.

[34] "Investment credit" was included in the more inclusive "general business tax credit," starting with 1984. With exceptions, investment credit was repealed, effective 1986.

[35] The statistics for all years shown are comparable. However, prior to Tax Year 2000, total income tax is the sum of two components, income tax after credits and "minimum tax" or "alternative minimum tax (AMT)"; see footnote 36. Starting with Tax Year 2000, total income tax is, in general, the same as income tax after credits, which was redefined to include AMT. (The small difference between the two amounts for 2000 is due mainly to the inclusion in the statistics for Tax Year 2000 of prior-year returns filed in Calendar Year 2001 that were used as proxies for Tax Year 2000 returns filed after 2001; the AMT on these returns was included in total income tax, but not in income tax before or after credits, consistent with the reporting sequence on the tax return forms for these years. The same is true for Tax Year 2001 for prior returns filed in Calendar Year 2002 for Tax Year 1999 and earlier. To a far lesser extent, the difference between total income tax and income tax after credits represents the tax on accumulation distributions of trusts, which was included in total income tax only.