S. 4083 — Working Americans’ Tax Cut Act

This section establishes an alternative maximum income tax under new IRC §1A of 25.5% on modified adjusted gross income (MAGI) exceeding a cost-of-living exemption for qualified individuals (i.e., individuals with MAGI below 175% of the exemption, excluding those described in IRC §63(c)(6)) for taxable years beginning after December 31, 2025. The cost-of-living exemption equals 100% of an annualized cost-of-living wage ($46,000 base amount indexed annually by the CPI-U for September of the prior calendar year relative to the year preceding enactment) for single filers, 200% for joint returns, and 140% for heads of household; MAGI means adjusted gross income plus amounts excluded under IRC §§911, 931, or 933 and nontaxable Social Security benefits.

This section establishes a new income tax surcharge under new IRC §59B on non-corporate taxpayers equal to (1) 5% of modified adjusted gross income (AGI) exceeding $1 million but not $2 million, (2) 10% of such income exceeding $2 million but not $5 million, plus (3) 12% of such income exceeding $5 million, with thresholds increased by 50% for joint filers (i.e., to $1.5 million, $3 million, and $7.5 million) and indexed for inflation after 2025 using the CPI-U. Modified AGI means AGI reduced by the investment interest deduction under IRC §163(d) (with special rules for estates and trusts); exemptions apply to charitable trusts under IRC §170(c)(2)(B), and special adjustments apply to U.S. citizens and residents living abroad under IRC §911. (Thus, the surcharge is imposed in addition to other taxes but does not count as a chapter 1 tax for credits or alternative minimum tax purposes.) The amendments apply to taxable years beginning after December 31, 2025, with a conforming update to the table of parts for IRC subchapter A.