Press Releases

U.S. Representative Don Beyer (D-VA) today introduced the Working Americans’ Tax Cut Act to ensure the wealthiest pay their fair share through a tiered surtax on income above a million dollars. The revenue generated by this surtax will provide much-needed tax relief for millions of working Americans who are struggling to afford the cost of living as prices rise. Additionally, the bill eliminates federal income taxes for Americans who make under the $46,000 median cost of living and provides a significant tax break to individuals making between $46,000 to $80,500, with proportionally higher rates for heads of households and married couples. Companion legislation was introduced in the Senate by U.S. Senator Chris Van Hollen (D-MD). 

This legislation has been endorsed by a broad range of organizations including: AFL-CIO, American Federation of Teachers (AFT), Americans for Tax Fairness, Community Change Action, Demos, Get Out the Vote PAC, Indivisible, Institute for Policy Studies, MoveOn, National Education Association (NEA), NETWORK Lobby for Catholic Social Justice, Oxfam US, Patriotic Millionaires, People’s Action, Public Citizen, Social Security Works, Strong Economy for All Coalition, SURJ, Take on Wall Street, and United for a Fair Economy.

“For decades, our tax code has been tilted to benefit the wealthiest Americans – especially those making millions of dollars each year from investments and capital gains. Our bill would restore balance and fairness to our tax code by asking the wealthiest Americans to contribute more through a tiered surtax on income above one million dollars. That revenue will deliver meaningful tax relief for working Americans trying to afford basic necessities like groceries, rent, child care, and gas,” said Representative Beyer.

“Far too many Americans are working hard for their paychecks but still having trouble making ends meet. These Americans who are earning just enough to get by – to meet their basic living expenses – should not have to pay a federal income tax. Our bill would ensure just that – and it would provide a significant tax break to millions of other working Americans, so folks can keep more of their hard-earned money in their pockets,” said Senator Van Hollen.

The Working Americans’ Tax Cut Act implements a tiered surtax on millionaires. The bill applies an additional 5 percent tax to the first dollar an individual makes over $1 million and the first dollar a married couple earns over $1.5 million annually; an additional 10 percent tax to the first dollar an individual makes over $2 million and a married couple makes over $3 million annually; and an additional 12 percent tax to the first dollar an individual makes over $5 million and a married couple makes over $7.5 million annually. This surtax would apply equally to wages and salaries as well as to capital gains and other investment income. The Yale Budget Lab has estimated that this surtax would impact 615,000 tax filers and raise $1.46 trillion over ten years. 

The revenue generated through this surtax will fund needed tax relief for working Americans – whether they are a single adult, a head of household, or a married couple filing jointly – by reducing their federal income taxes based on their income to help ensure they can afford their cost of living expenses.

• The median cost of living for a single adult with no children in the United States is estimated to be $46,000 a year, based on county-level data aggregated by the Living Wage Institute. Individuals who earn less than that will not pay federal income taxes. 

• For individuals with income ranging from $46,000 to $80,500, the legislation provides a significant tax break to also combat cost of living expenses. It phases out this cost-of-living exemption at 175% of the median cost of living for a single adult with no children. As a result, a person making between $46,000 and $80,500 a year would have a lower tax rate using this exemption than they do under the current tax system. To illustrate, a single person who makes $50,000 would typically receive a tax cut of approximately $2,800.

• The bill includes a larger exemption for heads of households, 140% of the single exemption or $64,400; and for married couples filing jointly, 200% of the single exemption or $92,000.
  • These exemptions will also phase out at higher rates, with heads of households making between $64,400 and $112,700 a year and married couples making between $92,000 and $161,000 a year receiving a tax cut under this legislation. For example, a family of four who earns $95,000 would typically receive a tax cut of approximately $6,000  due to the cost-of-living exemption.

According to an analysis by the Institute for Taxation and Economic Policy, nearly 130 million people, including over 25 million children, would receive a tax cut through this legislation.

“Working people are one medical bill, one car repair, one bad break from not making rent,” said AFL-CIO President Liz Shuler. “They are working longer hours than ever and still struggling to put food on the table, while paying more in taxes than the billionaires. As we continue to fight for universal affordable health care, universal child care, and livable wages, the Working Americans’ Tax Cut Act is an important step toward getting working people some real relief.”

“The Working Americans’ Tax Act is one of the most important concrete actions Congress can take to ease the squeeze on working families. Right now, workers can’t pay the bills. Their wallets are being drained by a severe affordability crisis caused by the current administration and aggravated by the ‘Big, Ugly Bill’, which doubled down on tax cuts for billionaires, while stripping healthcare and nutrition assistance away from everyone else. This long-overdue legislation puts cash back in the pockets of millions of Americans who are being forced to choose between paying the rent and putting food on the table. It is a meaningful down payment on a solution that actually works for workers and the AFT is proud to be leading on it,” said Randi Weingarten, President of the American Federation of Teachers.

“At this point in American life, both parties want to be the party of the working class. Over the summer, Republicans tried to prove themselves by putting forward a budget bill that only offers tax relief for the 3% of working people who rely on tips. But today, Senator Van Hollen and his Democratic colleagues made their pitch to wear the label by introducing a bill that provides help to ALL working people. To us, it’s abundantly clear who actually deserves it,” said Morris Pearl, Chair of Patriotic Millionaires. “This is a watershed moment that would offer economic stability to a vast majority of the country. Millionaires like me will be better off paying a little more in taxes so that all of the workers we depend on can afford to provide for their families. That’s why the Patriotic Millionaires are thrilled to see Senator Van Hollen, Senator Kelly, Representative Beyer, and their colleagues introduce the Working Americans’ Tax Cut Act to get our country on a better and more sustainable path for the sake of our economy and democracy.”

Text of the Working Americans’ Tax Cut Act is available here.