S 4083 — Working Americans’ Tax Cut Act

Bill Text

• Introduced Introduced in Senate Current html March 12, 2026

AI-generated reading aid from the bill's amendatory text — verify against the official bill.

The bill establishes a new alternative maximum tax for low- and middle-income individuals and introduces a surcharge on high-income individuals under the Internal Revenue Code.

• Part I of subchapter A of chapter 1 of the Internal Revenue Code of 1986

  SEC. 1A. ALTERNATIVE MAXIMUM TAX FOR LOW- AND MIDDLE-INCOME INDIVIDUALS. (a) In General.--In the case of a qualified individual, the tax imposed under section 1 for any taxable year shall not exceed 25.5 percent of the excess of-- (1) the taxpayer's modified adjusted gross income for such taxable year, over (2) the cost-of-living exemption for such taxable year. (b) Qualified Individual.-- (1) In general.--For purposes of this section, the term `qualified individual' means, with respect to any taxable year, any individual if the taxpayer's modified adjusted gross income for such taxable year is less than 175 percent of the cost-of-living exemption for such taxable year. (2) Exception.--The term `qualified individual' shall not include any person described in section 63(c)(6). (c) Cost-of-Living Exemption.--For purposes of this section-- (1) In general.--The term `cost-of-living exemption' means, with respect to any taxable year-- (A) in the case of a taxpayer not described in subparagraph (B) or (C), 100 percent of the annualized cost-of-living wage, (B) in the case of a joint return, 200 percent of the annualized cost-of-living wage, and (C) in the case of a head of household, 140 percent of the annualized cost-of-living wage. (2) Annualized cost of living wage.-- (A) In general.--The term `annualized cost-of-living wage' means, with respect to any taxable year, an amount equal to $46,000, multiplied by the ratio of-- (i) the CPI-U for the calendar year preceding the calendar year in which such taxable year begins, to (ii) the CPI-U for the calendar year preceding the calendar year of the date of enactment of the Working Americans' Tax Cut Act. (B) CPI-U.--For purposes of this paragraph, the term `CPI-U' means, when used with respect to a calendar year, the Consumer Price Index for all urban consumers, as published by the Bureau of Labor Statistics, for September of such year. (d) Modified Adjusted Gross Income.--For purposes of this section, the term `modified adjusted gross income' means adjusted gross income increased by-- (1) any amount excluded from gross income under section 911, 931, or 933, and (2) an amount equal to the portion of the taxpayer's social security benefits (as defined in section 86(d)) which is not included in gross income under section 86 for the taxable year.

  This provision creates a new alternative maximum tax structure aimed at reducing tax burdens for qualified low- and middle-income individuals.

• Subchapter A of chapter 1 of the Internal Revenue Code of 1986

  PART VIII--SURCHARGE ON HIGH INCOME INDIVIDUALS SEC. 59B. SURCHARGE ON HIGH INCOME INDIVIDUALS. (a) General Rule.--In the case of a taxpayer other than a corporation, there is hereby imposed (in addition to any other tax imposed by this subtitle) a tax equal to the sum of-- (1) 5 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $1,000,000, but does not exceed $2,000,000, (2) 10 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $2,000,000, but does not exceed $5,000,000, plus (3) 12 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $5,000,000.

  This provision imposes a new surcharge on high-income individuals, increasing their tax liability based on their modified adjusted gross income.

• Subchapter A of chapter 1 of the Internal Revenue Code of 1986

  Clerical Amendment.--The table of parts for subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: Part VIII--Surcharge on High Income Individuals.

  This change adds a clerical entry to the tax code, categorizing the new surcharge on high-income individuals.

• Subchapter A of chapter 1 of the Internal Revenue Code of 1986

  Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2025.

  This provision establishes an effective date for the new tax provisions included in the bill.

Action History

1. March 12, 2026

   Introduced in Senate

2. March 12, 2026

   Read twice and referred to the Committee on Finance.

Sponsors

• Mark Kelly · Cosponsor
• Kirsten E. Gillibrand · Cosponsor
• Cory A. Booker · Cosponsor
• Andy Kim · Cosponsor
• Richard J. Durbin · Cosponsor
• Bernard Sanders · Cosponsor
• Jeff Merkley · Cosponsor
• Christopher A. Coons · Cosponsor
• Richard Blumenthal · Cosponsor
• Brian Schatz · Cosponsor
• Tammy Baldwin · Cosponsor
• Mazie K. Hirono · Cosponsor
• Martin Heinrich · Cosponsor
• King, Angus S., Jr. · Cosponsor
• Edward J. Markey · Cosponsor
• Peter Welch · Cosponsor
• Adam B. Schiff · Cosponsor
• Lisa Blunt Rochester · Cosponsor
• Ruben Gallego · Cosponsor
• John W. Hickenlooper · Cosponsor
• Chris Van Hollen · Primary

Subjects