A key part of Democrats’ tax and spending plan involves raising levies on the top sliver of U.S. households, including restoring the top individual income rate to 39.6%.
That new top rate – which reverses part of the Trump-era Tax Cuts and Jobs Act – would apply to single individuals with taxable income of more than $452,700 and married couples with joint taxable income of $509,300, according to the president’s $6 trillion budget proposal released earlier this year.
Heads of households earning more than $481,000 and married individuals filing separate tax returns with income over $254,650 would also pay the higher rate. The current top marginal rate of 37% is currently paid by singles earning $523,601 or more and couples making $628,301 or more. Assuming the proposal becomes law – which hinges on a deeply divided Congress – the new tax rate would start to apply during the 2022 tax year.
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