Top Tax Rate on Personal Income Would Be Highest in OECD under New Build Back Better Framework

Under the latest iteration of the House Build Back Better Act (BBBA), the average top tax rate on personal income would reach 57.4 percent, giving the U.S. the highest rate in the Organisation for Economic Co-operation and Development (OECD). All 50 states plus the District of Columbia would have top tax rates on personal income exceeding 50 percent.

High-income taxpayers would face a surcharge on modified adjusted gross income (MAGI), defined as adjusted gross income less investment interest expense. The surcharge would equal 5 percent on MAGI in excess of $10 million plus 3 percent on MAGI above $25 million, for a total surcharge of 8 percent. The plan would also redefine the tax base to which the 3.8 percent net investment income tax (NIIT) applies to include the “active” part of pass-through income—all taxable income above $400,000 (single filer) or $500,000 (joint filer) would be subject to tax of 3.8 percent due to the combination of NIIT and Medicare taxes. Under current law, the top marginal tax rate on ordinary income is scheduled to increase from 37 percent to 39.6 percent starting in 2026. Overall, the top marginal tax rate on personal income at the federal level would rise to 51.4 percent.

Democrats Top Income Tax Rate Would Be Among Highest in OECD (taxfoundation.org)

FWIW

I don’t understand all all of that but I’m not surprised taxes will go up.

Showtalk said...

I don’t understand all all of that but I’m not surprised taxes will go up.

Whether you fully understand it or not... Biden promised not to raise taxes on the middle class.

Well, guess what... he lied yet again.

FWIW

Everyone knew Biden’s financial advisers were going forms tax on the middle class. They chose to ignore it when they voted.  They got what they voted for not what he promised.

Showtalk said...

Everyone knew Biden’s financial advisers were going forms tax on the middle class. They chose to ignore it when they voted.  They got what they voted for not what he promised.

I wonder how many now are really happy that they voted for Biden?

FWIW

Voters are wildly happy.  That is why his approval rating is so high. And Harris was at 28% in the last poll