Summary
A group of Democratic senators has introduced the Working Americans’ Tax Cut Act. This plan aims to remove federal income tax for many low-income Americans and reduce taxes for middle-income households, funded by a surtax on millionaires. The proposal's goal is to provide financial relief to around 130 million working Americans.
Key Facts
- The plan would eliminate federal income tax for many singles earning less than $46,000 a year.
- The bill includes higher exemptions for heads of households and married couples filing jointly.
- The tax cut bill would be paid for by adding a surtax on incomes over $1 million.
- The surtax would be 5% for income above $1 million, 10% above $2 million, and 12% above $5 million.
- The proposal suggests indexing exemptions and surtax thresholds to inflation.
- The Tax Foundation estimates a federal tax revenue reduction of $86 billion between 2026 and 2035 due to the proposal.
- This measure could reduce taxes significantly for millions, with examples showing tax cuts of thousands of dollars for typical households.
- Democratic Senators Chris Van Hollen, Mark Kelly, Kirsten Gillibrand, Cory Booker, and Andy Kim are among the bill's sponsors.
