Bill > HR7937

This bill, titled the "Working Americans’ Tax Cut Act," proposes changes to the Internal Revenue Code of 1986 to modify income taxation for individuals. Primarily, it introduces an "Alternative Maximum Tax for Low- and Middle-Income Individuals," which caps the tax liability for "qualified individuals" at 25.5% of their income exceeding a "cost-of-living exemption." A "qualified individual" is defined as someone whose "modified adjusted gross income" (adjusted gross income with certain foreign income and social security benefits added back) is less than 175% of this exemption. The "cost-of-living exemption" is based on an "annualized cost-of-living wage" of $46,000, adjusted for inflation using the Consumer Price Index for All Urban Consumers (CPI-U), and varies for single filers, joint filers, and heads of household. Concurrently, the bill imposes a new "Surcharge on High Income Individuals," which adds a tax of 5% to 12% on modified adjusted gross income exceeding $1 million, with higher rates applying to income above $2 million and $5 million, also adjusted for inflation and with a higher threshold for joint filers. This surcharge is intended to fund the tax relief provided to lower and middle-income individuals. Both provisions are set to take effect for taxable years beginning after December 31, 2025.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/7937/all-info