Summary: We estimate the budgetary and distributional effects of permanently forgiving the September to December 2020 payroll tax deferral under President Trump's August executive order. We project that this forgiveness would cost $122 billion dollars.
| Including corporate income tax burden | |||||||
|---|---|---|---|---|---|---|---|
| Income Group | Average Tax Change | Share With A Tax Cut | Average Tax Cut for Those with a Tax Change | Percent Change In After Tax Income | Share Of Tax Change | Share Of Federal Taxes Paid | |
| Before Tax Cut | After Tax Cut | ||||||
| Bottom quintile | -83 | 43% | -195 | 4% | 3% | -2.5% | -3.6% |
| Second quintile | -458 | 89% | -515 | 5% | 10% | 0.9% | -1.1% |
| Middle quintile | -862 | 90% | -955 | 6% | 19% | 9.3% | 7.2% |
| Fourth quintile | -1,405 | 86% | -1,627 | 5% | 26% | 18.7% | 17.0% |
| 80-90% | -2,357 | 92% | -2,555 | 6% | 18% | 15.5% | 14.9% |
| 90-95% | -2,968 | 94% | -3,152 | 5% | 11% | 11.9% | 12.1% |
| 95-99% | -3,355 | 94% | -3,572 | 4% | 10% | 17.8% | 19.5% |
| 99-99.9% | -3,325 | 94% | -3,527 | 1% | 2% | 13.9% | 16.4% |
| Top 0.1% | -3,490 | 93% | -3,767 | 0% | 0% | 14.3% | 17.3% |