Working Americans’ Tax Cut Act
Sponsored By: Senator Van Hollen, Chris [D-MD]
Introduced
Summary
This bill would create a new Alternative Maximum Tax for low- and middle-income individuals that limits tax for qualifying taxpayers and would add a separate tiered surcharge on very high incomes.
Show full summary
- Low- and middle-income households would have their federal tax capped at 25.5% of the income above a cost-of-living exemption if their modified adjusted gross income is under 175% of that exemption.
- Very high earners would face an extra surcharge that begins at $1 million of MAGI and rises up to 12% in the top bracket, with the brackets indexed for inflation.
- Certain charitable trusts are excluded from the surcharge and citizens or residents living abroad face special bracket adjustments.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 1 benefits, 1 costs, 0 mixed.
New surtax on very high earners
If enacted, this bill would impose an extra surtax on non-corporate taxpayers for tax years after December 31, 2025. The surtax would be 5% of MAGI over $1,000,000 up to $2,000,000, 10% of MAGI over $2,000,000 up to $5,000,000, and 12% of MAGI over $5,000,000. Dollar thresholds would be indexed for inflation for taxable years after 2026 using the BLS CPI-U for September. After indexing, joint filers' thresholds would be 50% higher. For U.S. citizens or residents abroad, thresholds would be reduced based on amounts excluded under section 911. Certain charitable trusts are exempt, and the surtax would not be treated as a tax for computing other tax credits or for the alternative minimum tax rules.
Tax cap for low and middle earners
If enacted, this bill would create an alternative maximum tax for certain low- and middle-income taxpayers for tax years after December 31, 2025. If you qualify, your tax under section 1 would not exceed 25.5% of the amount your modified adjusted gross income (MAGI) is above a cost-of-living exemption. The exemption equals a filing-status multiplier (100% for single, 200% for joint, 140% for head of household) times an annualized cost-of-living wage. The annualized wage starts at $46,000 and is adjusted using the BLS CPI-U for September of the relevant year. For this rule, MAGI adds back amounts excluded under sections 911, 931, and 933 and the portion of Social Security benefits not included in gross income. You are a "qualified individual" only if your MAGI is less than 175% of that exemption, and persons described in section 63(c)(6) are excluded.
Sponsors & CoSponsors
Sponsor
Van Hollen, Chris [D-MD]
MD • D
Cosponsors
Sen. Kelly, Mark [D-AZ]
AZ • D
Sponsored 3/12/2026
Sen. Gillibrand, Kirsten E. [D-NY]
NY • D
Sponsored 3/12/2026
Sen. Booker, Cory A. [D-NJ]
NJ • D
Sponsored 3/12/2026
Sen. Kim, Andy [D-NJ]
NJ • D
Sponsored 3/12/2026
Sen. Durbin, Richard J. [D-IL]
IL • D
Sponsored 3/12/2026
Sen. Sanders, Bernard [I-VT]
VT • I
Sponsored 3/12/2026
Sen. Merkley, Jeff [D-OR]
OR • D
Sponsored 3/12/2026
Sen. Coons, Christopher A. [D-DE]
DE • D
Sponsored 3/12/2026
Sen. Blumenthal, Richard [D-CT]
CT • D
Sponsored 3/12/2026
Sen. Schatz, Brian [D-HI]
HI • D
Sponsored 3/12/2026
Sen. Baldwin, Tammy [D-WI]
WI • D
Sponsored 3/12/2026
Sen. Hirono, Mazie K. [D-HI]
HI • D
Sponsored 3/12/2026
Sen. Heinrich, Martin [D-NM]
NM • D
Sponsored 3/12/2026
Sen. King, Angus S., Jr. [I-ME]
ME • I
Sponsored 3/12/2026
Sen. Markey, Edward J. [D-MA]
MA • D
Sponsored 3/12/2026
Peter Welch
VT • D
Sponsored 3/12/2026
Sen. Schiff, Adam B. [D-CA]
CA • D
Sponsored 3/12/2026
Sen. Blunt Rochester, Lisa [D-DE]
DE • D
Sponsored 3/12/2026
Sen. Gallego, Ruben [D-AZ]
AZ • D
Sponsored 3/19/2026
John Hickenlooper
CO • D
Sponsored 4/30/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov