What does Preamble of Working Americans’ Tax Cut Act do?

This bill proposes to amend the Internal Revenue Code of 1986. The stated purpose is to make modifications related to the taxation of income used to fund basic living expenses.

What does SHORT TITLE. of Working Americans’ Tax Cut Act do?

This bill is formally titled Working Americans' Tax Cut Act

What does ALTERNATIVE MAXIMUM TAX FOR LOW-INCOME INDIVIDUALS. of Working Americans’ Tax Cut Act do?

This section amends Part I of Subchapter A of Chapter 1 of the Internal Revenue Code of 1986 by inserting a new section 1A. Section 1A establishes an alternative maximum tax for low- and middle-income individuals. The alternative maximum tax would not exceed 25.5 percent of the excess of a taxpayer's modified adjusted gross income over the cost-of-living exemption. A 'qualified individual' is defined as someone whose modified adjusted gross income is less than 175 percent of the cost-of-living exemption, with an exception for individuals described in section 63(c)(6). The 'cost-of-living exemption' is determined based on filing status (single, joint, or head of household) and is a percentage of the annualized cost-of-living wage. The 'annualized cost-of-living wage' is calculated using a formula involving the Consumer Price Index for Urban Consumers (CPI-U). Modified adjusted gross income is defined as adjusted gross income increased by certain exclusions and social security benefits. The amendments apply to taxable years beginning after December 31, 2025.

What does SURCHARGE ON HIGH INCOME INDIVIDUALS. of Working Americans’ Tax Cut Act do?

This section imposes a surcharge on high income individuals. The surcharge is in addition to any other tax imposed by this subtitle. The surcharge rates are 5%, 10%, and 12% of modified adjusted gross income exceeding certain thresholds. The thresholds are $1,000,000, $2,000,000, and $5,000,000. The dollar amounts are adjusted for inflation after 2026.

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Working Americans’ Tax Cut Act

Last updated: 3/16/2026 · Introduced: 3/16/2026

Author: Donald Beyer (D-VA)

TL;DR (AI)

This bill establishes an alternative, lower maximum tax rate of up to 25.5% for low- and middle-income individuals based on a cost-of-living exemption and modified adjusted gross income.
High-income individuals with modified adjusted gross income exceeding specific thresholds ($1,000,000, $2,000,000, and $5,000,000) will be subject to an additional surcharge tax of 5%, 10%, or 12%.
The bill adjusts income thresholds and the cost-of-living exemption for inflation after 2026.

119th Congressin committeeS. 4083(In Committee)Official page

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Other Sections

Includes provisions on preamble, short title., and 2 more.

4 sections

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