Individual income tax rate reform

(a) Joint returns and surviving spouses Section 1(a) of the Internal Revenue Code of 1986 is amended by striking the table contained therein and inserting the following: If taxable income is: The tax is: Not over $200,000 25% of taxable income. Over $200,000 but not over $400,000 $50,000, plus 30% of the excess over $200,000. Over $400,000 but not over $1,000,000 $110,000, plus 40% of the excess over $400,000. Over $1,000,000 but not over $2,000,000 $350,000, plus 50% of the excess over $1,000,000. Over $2,000,000 $850,000, plus 70% of the excess over $2,000,000.. (b) Heads of households Section 1(b) of such Code is amended by striking the table contained therein and inserting the following: If taxable income is: The tax is: Not over $150,000 25% of taxable income. Over $150,000 but not over $300,000 $37,500, plus 30% of the excess over $150,000. Over $300,000 but not over $750,000 $82,500, plus 40% of the excess over $300,000. Over $750,000 but not over $1,500,000 $262,500, plus 50% of the excess over $750,000. Over $1,500,000 $637,500, plus 70% of the excess over $1,500,000.. (c) Other individuals Section 1 of such Code is amended by striking subsections (c) and (d) and inserting the following new subsection: (d) Other individuals There is hereby imposed on the taxable income of every individual (other than an individual subject to tax under subsection (a) or (b)) a tax determined in accordance with the following table: If taxable income is: The tax is: Not over $100,000 25% of taxable income. Over $100,000 but not over $200,000 $25,000, plus 30% of the excess over $100,000. Over $200,000 but not over $500,000 $55,000, plus 40% of the excess over $200,000. Over $500,000 but not over $1,000,000 $175,000, plus 50% of the excess over $500,000. Over $1,000,000 $425,000, plus 70% of the excess over $1,000,000.. (d) Estates and trusts Section 1(e) of such Code is amended by striking the table contained therein and inserting the following new table: If taxable income is: The tax is: Not over $3,000 25% of taxable income. Over $3,000 but not over $11,000 $750, plus 30% of the excess over $3,000. Over $11,000 but not over $15,000 $3,150, plus 40% of the excess over $11,000. Over $15,000 but not over $20,000 $4,750, plus 50% of the excess over $15,000. Over $20,000 $7,250, plus 70% of the excess over $20,000.. (e) Repeal of reduced rates of tax on capital gains Section 1 of such Code is amended by striking subsection (h). (f) Conforming amendments (1) Section 1(f) of such Code is amended— (A) in the heading, by striking Phaseout of marriage penalty in 15-percent bracket, (B) in paragraph (1)— (i) by striking 1993 and inserting 2026 (ii) by striking (c),, (C) in paragraph (2)— (i) by striking (c),, and (ii) by amending subparagraph (A) to read as follows: (A) by increasing the minimum and maximum dollar amounts for each bracket for which a tax is imposed under such table by the cost-of-living adjustment for such calendar year, determined by substituting 2026 for 2016 in paragraph (3)(A)(ii),, (D) in paragraph (7)(B)— (i) in the heading, by striking married individuals filing separately and inserting certain individuals, and (ii) by striking married individual filing a separate return and inserting any individual subject to tax under subsection (d), and (E) by striking paragraph (8). (2) Section 1 of such Code is amended by striking subsections (i) and (j). (g) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2025.