CLINTON’S ECONOMIC PACKAGE : How the Clinton Tax Package Affects Americans

President Clinton’s tax package, if enacted as proposed, would have an impact on virtually all Americans making more than $30,000 a year. The bulk of the new taxes, though, would be paid by upper-income wage earners. The following examples, which do not include state or local taxes, illustrate the changes on individuals and families of all income levels. Taxable income reflects income after deductions and exemptions.

Family of four (two adults, two children):

Wages: $400,000

Interest and dividends: $85,000

Total income: $485,000

Taxable income: $391,784

Taxes: $113,982

Taxes under Clinton plan: $133,386 (includes estimate of $350 for energy tax)

Increase: $19,405

Family of four (two adults, two children):

Wages: $73,500

Interest and dividends: $1,500

Taxable income: $49,101

Taxes: $8,951

Taxes Under Clinton plan: $9,096 (includes estimate of $145 for energy tax)

Increase: $145

Family of four (two adults, two children):

Wages: $50,000

Interest and dividends: $5,000

Total income: $55,000

Taxable income: $34,560

Taxes: $5,184

Taxes under Clinton plan: $5,314 (includes estimate of $130 for energy tax)

Increase: $130

Family of five (two adults, three children):

Wages: $190,000

Interest and dividends: 10,000

Total income: $200,000

Taxable income: $149,693

Taxes: $38,933

Taxes under Clnton plan: $40,460 (includes estimate of $245 for energy tax)

Increase: $1,527

Widow

Income: $50,000

Social Security: $13,000

Interest and dividends: $37,000

Adjusted gross income: 43,500

Adjusted gross income under Clinton plan: $48,050 (more Social Security benefits taxable)

Taxable Income: $36,550

Taxable under Clinton plan: $41,100

Taxes: $7,361

Taxes under Clinton plan: $8,760 (includes estimate of $125 for energy tax)

Increase: $1,399

Widow

Social Security: $13,000

Interest and dividends: $2,000

Adjusted gross income: $2,000 (Social Security not taxable)

Taxes: 0

Taxes under Clinton plan: $85 (estimated impact of energy tax)

Increase: $85

Source: Coopers & Lybrand for Los Angeles Times