Congress rewrites tax brackets, introduces 39.6% top rate for highest earners
H.R. 4280 — Bipartisan Tax Fairness Act of 2025 · Filed by Brian Fitzpatrick (R-PA) · 1 cosponsor · Introduced Jul 2, 2025 · Referred to committee
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What it does
This bill rewrites federal income tax brackets for all filing categories (married joint, head of household, single, married separate, and estates/trusts) and introduces a new top marginal rate of 39.6% on income over $2 million for married couples filing jointly. It makes these rates permanent and ties future bracket adjustments to inflation using 2017 as the base year instead of 2016. The bill benefits higher earners by establishing a new top bracket while restructuring lower and middle brackets; it affects all taxpayers by changing the tax tables they use.
Why we flagged it
The bill's core function is to replace the existing federal income tax bracket structure with new thresholds and rates across all filing categories. While it introduces a new top rate of 39.6%, the operative mechanism is a comprehensive rewrite of tax tables, not a simple rate increase.
What the text implies
- The shift from 2016 to 2017 as the base year for inflation adjustments may affect the pace at which brackets expand in future years, potentially altering the real tax burden over time.
- The bill eliminates prior subsections (a) and (f) of IRC §1 without restating their content; the full effect depends on what those subsections contained in current law.
The full analysis lists 4 implications of this text.
Who it affects
The bill creates a new top marginal rate (39.6%) that increases taxes on the highest earners, a potential public benefit; however, it simultaneously restructures all other brackets in ways that may reduce taxes for middle and upper-middle earners depending on the specific income level and filing status. The net distributional effect on ordinary citizens cannot be determined from the text alone without detailed comparison of current law to the new brackets.