Working Americans’ Tax Cut Act

The Working Americans’ Tax Cut Act aims to restructure the federal income tax system to provide relief for low- and middle-income households. The bill proposes a "cost-of-living exemption" that would effectively eliminate federal income taxes for single filers earning less than $46,000 per year, which is the estimated national median cost of living. For married couples filing jointly, this exemption would increase to $92,000. Individuals earning between the exemption amount and approximately $80,500 would also receive significant tax reductions through a new alternative tax calculation.

To offset the cost of these tax cuts, the legislation would introduce a tiered surtax on high-income earners. This includes a 5% tax on income between $1 million and $2 million, a 10% tax on income between $2 million and $5 million, and a 12% tax on income exceeding $5 million. These surtaxes are intended to make the bill budget-neutral while shifting the tax burden toward the wealthiest Americans.

If enacted, the bill would impact approximately 130 million working Americans by either eliminating their federal income tax liability or reducing their overall tax bill. The proposal is designed to ensure that income required for basic living expenses is not taxed, helping families keep more of their paychecks as the cost of living rises. The bill has been referred to the Senate Committee on Finance for further consideration.