Progressive Income Tax and Top Rate

Engine: Engine 1

Framing

The income tax is restructured into 13 brackets topping at 55%. Brackets 1-7 are identical to current law through the $750,000 threshold. Brackets 8-11 fill the previously-flat zone between $750K and $10M with 2-point steps. Brackets 12-13 are the Retention and Maximum Capacity tiers. Capital gains above a basic exemption are taxed as ordinary income.

The full bracket schedule

Bracket

Income Range

Marginal Rate

1

$0 – $11,600

0%

2

$11,600 – $47,150

10%

3

$47,150 – $100,525

12%

4

$100,525 – $191,950

22%

5

$191,950 – $243,725

24%

6

$243,725 – $609,350

32%

7

$609,350 – $750,000

35%

8

$750,000 – $1,500,000

39%

9

$1,500,000 – $3,000,000

41%

10

$3,000,000 – $5,000,000

43%

11

$5,000,000 – $10,000,000

45%

12

$10,000,000 – $50,000,000

49% (Retention Tier)

13

$50,000,000+

55% (Maximum Capacity)

Brackets 1-7 match current law (2024) exactly, delivering the Accord's core promise: if you earn under $750,000, your income tax does not change. Brackets 8-11 apply 2-point steps across the previously-flat $750K-$10M range, ensuring that a surgeon at $1.2M (bracket 8, 39%) is distinguished from a law firm managing partner at $4M (bracket 10, 43%) and a hedge fund partner at $8M (bracket 11, 45%). Bracket 12 is the Retention Tier (49%); bracket 13 is the Maximum Capacity Tier (55%).

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.

Debt Sunset governor interaction

The top rate moves 1:1 with payroll tax under Debt Sunset governance. Each 0.25pp payroll tax step is matched by a 0.25pp top rate step in the same direction. The corridor is 53.50%–56.00%. Coupling preserves progressive burden distribution at all governor positions.

Progressivity check

After payroll tax (uncapped 28%), progressive income tax (0-55%), estate tax prepayment (0.8-2.0%), 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%+.