House Democrats propose top 39.6% tax rate at these income levels – CNBC

Uploaded by on September 14, 2021 at 9:24 am

House Democrats have proposed a top marginal income tax rate of 39.6% for individuals, part of a sweeping change to the tax code to fund climate investments and an expansion of the U.S. safety net.

That rate, an increase from the current 37% levy for the wealthiest taxpayers, would kick in for single individuals with taxable income over $400,000, according to a legislative outline issued by the House Ways and Means Committee on Monday.

It would also apply to married individuals filing a joint tax return whose taxable income exceeds $450,000; to heads of households over $425,000; to married individuals filing separate returns over $225,000; and to estates and trusts over $12,500.

If the plan became law, the changes would start in 2022. They would raise $170 billion over the next decade, according to a Joint Committee on Taxation estimate issued Monday.

The current top 37% rate kicks in at higher income thresholds than the ones House Democrats have now proposed. In 2021, they apply to single filers and heads of household when income exceeds $523,600 and for married joint filers over $628,300, for example.