Cost of Living Tax Cut Act
Sponsored By: Representative Gillen, Laura [D-NY-4]
Introduced
Summary
This bill would add regional cost-of-living adjustments to individual income tax brackets. It would change how bracket dollar amounts are set by applying area-specific multipliers tied to local cost indexes for tax years beginning after 2026.
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- Residents of high-cost metropolitan areas would see bracket thresholds adjusted using a multiplier equal to 90% of the area's cost-of-living differential when that differential exceeds 125%. This changes bracket cutoffs but does not change the tax rates themselves.
- Residents of moderate-cost areas where local costs are 97–125% of the U.S. average would have bracket thresholds multiplied by 1.05, effectively increasing their bracket cutoffs by 5%.
- Residents in lower-cost areas (at or below 97% of the U.S. average) and areas outside metropolitan boundaries would use a multiplier of 1, leaving bracket cutoffs unchanged.
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Bill Overview
Analyzed Economic Effects
1 provisions identified: 1 benefits, 0 costs, 0 mixed.
Lower taxes in high-cost areas
This bill would change individual income tax bracket dollar limits based on where you live, starting for tax years after December 31, 2026. The Commerce Department would publish a cost-of-living index each year for every metropolitan area and for non-metropolitan parts of each state. The Treasury would set an annual multiplier for each area by December 15 to adjust bracket dollar amounts. If an area's cost-of-living is over 125% of the U.S. average, the multiplier would be 90% of that percent; if it is between 97% and 125% the multiplier would be 1.05; otherwise the multiplier would be 1. Rates would not change. Adjusted bracket amounts would be rounded to the nearest $50.
Sponsors & CoSponsors
Sponsor
Gillen, Laura [D-NY-4]
NY • D
Cosponsors
Rep. Lawler, Michael [R-NY-17]
NY • R
Sponsored 6/8/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov