The Paying a Fair Share Act imposes a new 30 percent minimum tax on high-income earners to ensure they pay a fair share of federal taxes. The tax applies to individuals with adjusted gross income exceeding $1 million annually (or $500,000 for those filing separately), with the threshold adjusted for inflation in future years. The legislation calculates the tax by taking 30 percent of adjusted gross income minus charitable deductions, then subtracting any regular income taxes, payroll taxes, and applicable credits the taxpayer has already paid—ensuring no one subject to the law pays less than this minimum rate. The tax takes effect for taxable years beginning after December 31, 2024, and the bill's sponsors indicate it could reduce the federal deficit by billions annually while serving as a first step toward broader tax reform. The bill is sponsored by 15 Senate Democrats, primarily from the Senate Finance Committee.
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