Engine: Engine 1
Framing
The income tax takes current law exactly — every rate and every threshold, through the 37% bracket — and adds three rungs above it: 42%, 47%, and a top rate of 52% on income above $10M, which the Debt Sunset Governor moves together with the VAT and the payroll rate. The marginal-rate schedule matches current law through $1,000,000, so the schedule change below that level is zero by construction rather than by calibration. Resulting liability is a separate question — the Accord also brings employer health and employer retirement contributions into taxable compensation. Capital gains above a basic exemption are taxed as ordinary income.
The full bracket schedule
Bracket
Income Range (taxable income, after the $16,100 individual standard deduction)
Marginal Rate
1
$0 – $12,400
10%
2
$12,400 – $50,400
12%
3
$50,400 – $105,700
22%
4
$105,700 – $201,775
24%
5
$201,775 – $256,225
32%
6
$256,225 – $640,600
35%
7
$640,600 – $1,000,000
37%
8
$1,000,000 – $2,000,000
42%
9
$2,000,000 – $10,000,000
47%
10
$10,000,000+
52% (single top tier)
Brackets 1-7 are current law verbatim, at the IRS tax-year 2026 thresholds, so the marginal-rate schedule matches current law through $1,000,000. That is a statement about the SCHEDULE and nothing more: resulting liability also depends on what counts as taxable income, and the Accord changes that — employer health and employer retirement contributions become taxable compensation. Brackets 8-10 step up across the range current law leaves flat, so a surgeon at $1.2M, a law-firm managing partner at $4M and a hedge-fund partner at $8M are no longer taxed at one rate. Bracket 10 is the single top tier on income above $10M, moved by the Debt Sunset Governor together with the VAT and the payroll rate.
Married couples filing jointly take the current-law joint schedule on the same pattern, with the added rungs at $1.2M and $2.1M and the top rate at $10M — the same $10M for every filing status. Married filing separately is exactly half the joint schedule, which is current law's own rule and what prevents a couple reaching the added rungs later by splitting income across two returns.
Capital gains and related treatment
Capital gains: taxed as ordinary income above basic exemption
Capital Gains Allowance (CGAL) lifetime cap: $10M at favored rate (23.8%); gains above CGAL taxed at applicable marginal bracket
Stepped-up basis at death: eliminated (death is a realization event)
Carried interest: taxed as ordinary income
What this replaces
The current code taxes long-term capital gains at preferential rates (0%, 15%, 20% plus 3.8% NIIT) while taxing ordinary income up to 37%. The Accord ends the distinction for high earners above the CGAL exemption. Stepped-up basis at death is eliminated — the Accord treats death as a realization event and taxes accumulated gains at the decedent's marginal rate, closing buy-borrow-die at its termination point. The borrow leg is closed as well [BILL 2026-10-22]: pledging an appreciated asset as loan collateral is a deemed partial disposition, with no dollar threshold, pro rata against the pledged lot (the family home keeps its exclusion and a family business its liquidity deferral), and interest on borrowing against investment assets is deductible only against investment income recognized in the same year. Depreciation or amortization claimed on an asset whose registry value exceeds its basis is suspended until disposition. The foreign tax credit keeps its purpose, no income taxed twice, and loses its abuses: per-country limits with no cross-crediting, a cap at the US tax on the same income, no carryforward above a published de minimis, and no credit for a tax paid to a jurisdiction that does not exchange taxpayer information with the United States [BILL 2026-10-22].
Debt Sunset governor interaction
The top rate moves with the VAT and the payroll tax under Debt Sunset governance: every governor step moves all three in the same direction, inside an automatic budget of +2.0pp on the top income rate, +2.0pp on the VAT and +0.5pp on the payroll rate from the launch rates. Coupling preserves progressive burden distribution at all governor positions.
Progressivity check
After payroll tax (uncapped 28%), progressive income tax (0–52%), estate tax prepayment (0.80–2.00%), VAT with universal Pre-bate, and the household-dividend carbon rebate, the effective rate structure is approximately: bottom quintile 12-18%, middle quintiles 22-28%, top quintile 35-42%, top 0.1% approximately 50%+.