H.R. 7303 — Middle Class Tax Cut Act

This section increases the additional standard deduction amounts for aged and blind taxpayers under Section 63(c)(2) of the Internal Revenue Code— (1) in subparagraph (B), to $75,000 (from $4,400); and (2) in subparagraph (C), to $50,000 (from $3,000). This section makes conforming amendments to the inflation adjustment provision in Section 63(c)(4) to exclude these amounts from adjustments prior to 2026 and to base future adjustments on calendar year 2025. The changes apply to taxable years beginning after December 31, 2025.

This section replaces the individual income tax rate tables in IRC §1(a)–(b) and (e), and revises §1(c)–(d), to impose rates of 25%, 30%, 40%, 50%, and 70%—increasing the top marginal rate to 70% (from 37%)—as follows: (1) for joint returns and surviving spouses, 25% on income not over $200,000, 30% over $200,000 but not over $400,000, 40% over $400,000 but not over $1 million, 50% over $1 million but not over $2 million, and 70% over $2 million; (2) for heads of households, 25% not over $150,000, 30% over $150,000 but not over $300,000, 40% over $300,000 but not over $750,000, 50% over $750,000 but not over $1.5 million, and 70% over $1.5 million; (3) for other individuals, 25% not over $100,000, 30% over $100,000 but not over $200,000, 40% over $200,000 but not over $500,000, 50% over $500,000 but not over $1 million, and 70% over $1 million; and (4) for estates and trusts, 25% not over $3,000, 30% over $3,000 but not over $11,000, 40% over $11,000 but not over $15,000, 50% over $15,000 but not over $20,000, and 70% over $20,000. The section repeals the reduced rates for net capital gains and qualified dividends under §1(h); updates inflation adjustment rules in §1(f) by substituting 2026 for certain prior years and making related changes; and applies to taxable years beginning after December 31, 2025.