Congress·In Committee·S. 4083

Sen. Van Hollen Introduces Working Americans’ Tax Cut Act to Slash Taxes for Workers and Tax Millionaires

Working Americans’ Tax Cut Act

12 days ago·View on Congress.gov·Read full text

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Key Points

The bill creates a "cost-of-living exemption" that shields the first $46,000 of income from federal tax for single filers, $92,000 for married couples filing jointly, and $64,400 for heads of household. These amounts rise automatically with inflation each year.
Workers earning less than about $80,500 (175% of $46,000) as single filers qualify for the new tax cap. Their total federal income tax would be limited to 25.5% of whatever they earn above the cost-of-living exemption, potentially cutting their tax bills significantly.
To offset the revenue loss, the bill imposes a new surcharge on very high earners: 5% on income between $1 million and $2 million, 10% on income between $2 million and $5 million, and 12% on income above $5 million. These thresholds are also adjusted for inflation.
For married couples filing jointly, the surcharge thresholds are 50% higher — meaning the 5% surcharge kicks in at $1.5 million instead of $1 million. Charitable trusts are exempt from the surcharge entirely.
From policy text
“In the case of any taxpayer filing a joint return under section 6013, subsection (a) shall be applied (after the application of subsection (b)) by increasing each of the dollar amounts by an amount equal to 50 percent of such dollar amount”
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Both the tax cut and the surcharge would take effect for tax years beginning after December 31, 2025 — meaning they would first apply to taxes filed in early 2027 for the 2026 tax year. The bill was introduced by Sen. Van Hollen with 18 Democratic co-sponsors.
From policy text
“The amendments made by this section shall apply to taxable years beginning after December 31, 2025.”
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TaxesEconomy Finance

Impact Analysis

Personal Impact

Who is affectedScoreImpactCertaintyScopeDurationSentiment

Scores: 1 = low, 5 = highSentiment: -5 to +5 (net benefit)

Milestones

2 milestones2 actions

Mar 12, 2026Senate

Read twice and referred to the Committee on Finance.

Mar 12, 2026

Introduced in Senate

What Happens Next

Projected impacts based on AI analysis

2026-01-01

New tax rules take effect for the 2026 tax year

If passed, workers earning under about $80,500 (single) would see lower taxes on their 2026 income, and millionaires would owe new surcharges. People would see the impact when filing their 2026 taxes in early 2027.

2027-01-01

Inflation adjustments begin for 2027 tax year

Both the $46,000 cost-of-living exemption and the $1M/$2M/$5M surcharge thresholds would automatically adjust upward based on the Consumer Price Index, preventing inflation from silently pushing people into higher tax brackets.

Related News

5 articles

Accounting Today·12 days ago

Democrats introduce bill to eliminate or reduce income taxes

The Working Americans' Tax Cut Act would eliminate federal income taxes for those earning under $46,000 and reduce them for earners up to $80,500. To fund the relief, the bill introduces a tiered surtax on millionaires, starting at 5% for income over $1 million and rising to 12% over $5 million.

ARLnow·8 days ago

Rep. Beyer introduces bill to eliminate federal income tax for Americans earning under $46,000

Rep. Don Beyer (D-VA) introduced the House companion to the Working Americans' Tax Cut Act. The bill creates a tiered surtax on income above $1 million to fund tax relief for lower- and middle-income Americans, including a full exemption for those earning less than the median cost of living.

BizPac Review·7 days ago

CNBC host picks apart Democrat senator's tax plan to his face

During a 'Squawk Box' segment, CNBC's Becky Quick questioned Sen. Chris Van Hollen on his Working Americans' Tax Cut Act, noting it would nearly double the number of Americans who pay no federal income tax. Critics argue the plan could disincentivize work and fails to address the root of inflation.

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