The Working Americans' Tax Cut Act creates two major tax changes effective for tax years beginning after December 31, 2025. First, it establishes a new tax cap for low- and middle-income individuals, limiting their federal income tax to 25.5 percent of income above a cost-of-living threshold (starting at $46,000 for single filers, adjusted annually for inflation). Second, it imposes a new surcharge on high earners: 5 percent on income between $1 million and $2 million, 10 percent on income between $2 million and $5 million, and 12 percent on income exceeding $5 million, with the threshold amounts adjusted for married couples filing jointly and indexed annually for inflation. The bill affects working Americans earning up to roughly 175 percent of the cost-of-living threshold through the tax relief provision, while imposing additional taxes on the highest earners. No specific new funding is authorized, as the surcharge revenue would offset the cost of the low-income tax relief.
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