The current code taxes labor reliably while allowing capital, wealth, perks, and inherited appreciation to escape or defer tax. The Accord taxes progressively by broadening the base, applying higher rates at the top, and pairing broad consumption taxation with monthly rebates and luxury surcharges.
Statutory top rates do not match effective top rates. The current code prices $80,000 of wages and $80 million of compensation under the same nominal top-bracket structure — but allows the $80M earner to route most of that income into capital gains, deferred compensation, partnership allocations, and other preferentially-taxed channels. CBO/JCT estimates put the effective top-0.1% federal rate at roughly 26%; the headline statutory top is 37%. The ladder, as published, is a fiction at the top.
A second failure: the upper range is too flat. Today brackets compress the entire $750K-to-many-millions range into one bracket, so a surgeon making $1.2M and a hedge-fund partner making $80M pay nominally the same top marginal rate.
A 13-bracket structure topping at 55.0% on extraordinary income. The first seven brackets match current law (2024) exactly: under $750,000, your income tax does not change. New brackets 8–11 fill the previously-flat $750K–$10M range with 2-percentage-point steps. Bracket 12 is the Retention Tier (49%); bracket 13 is the Maximum Capacity Tier (55%).
The ladder applies to the comprehensive withholding base — all income forms, not narrow wage definitions. Capital gains converge into the ladder above a $10M lifetime cap (see capital-gains convergence). The top rate moves 1:1 with payroll tax under Debt Sunset governance, in 0.25-percentage-point steps within the 53.5%–56.0% corridor.
Filers across the income distribution; the ladder design rises with capacity. Below $750,000, the schedule is identical to today. Brackets 8–11 distinguish a $1.2M surgeon (bracket 8, 39%) from a $4M law-firm partner (bracket 10, 43%) from an $8M hedge-fund principal (bracket 11, 45%). The Retention and Maximum Capacity tiers (49% and 55%) apply only above $10M and $50M respectively.
The headline top rate finally matches the effective top rate — because the comprehensive base eliminates the games used today to pay below the headline.
Working- and middle-class filers see no change to their income-tax brackets. Brackets 1–7 are identical to current law. Below $750K of income there is no nominal change.
Effective rates after the full Accord stack — payroll tax, income tax, estate tax prepayment on stock above $10M, VAT with universal Pre-bate, carbon rebate — fall in the range of approximately 12–18% for the bottom quintile, 22–28% for middle quintiles, 35–42% for the top quintile, and approximately 50%+ for the top 0.1% (per DNA Chapter 7).
Not separately scored — rolled into income tax aggregate on /scoring.
The ladder's load is the gap between today's effective top rates (~26% for the top 0.1%) and v10's statutory rates, applied to the comprehensive base. This is among the largest recovery streams in Engine 1: it captures the income that escaped during fifty years of bracket compression and base erosion.
See tax ladder · fiscal scoring
- Income-form recharacterization
- Closed by comprehensive withholding — the ladder applies to all forms of compensation, not narrow wage definitions.
- Capital-gains conversion
- Closed by capital-gains convergence — gains above the $10M lifetime cap pay the ladder rate, not the favored rate.
- Entity routing
- Closed by pass-through and platform classification rules — substance over form.
- Filing-status arbitrage at the top brackets
- User-stated design: at the highest brackets, joint-filing bracket-doubling requires an irrevocable joint-ownership filing testament (parallel to the estate-prepayment joint threshold). Without the testament, top brackets apply individually even if married. This rule is not yet specified in canonical parameters — flagged below.
The ladder's anti-avoidance work is mostly done by the streams it depends on. Detail rules live in the linked subpages.
- payroll tax
- Coupled 1:1 with the top income rate via Debt Sunset. Each 0.25pp move on one is matched by 0.25pp on the other in the same direction. Burden distribution stays in proportion at every governor position.
- Comprehensive withholding base
- The ladder applies to the comprehensive base. Substance governs which compensation enters the ladder.
- Capital-gains convergence
- Above the $10M lifetime favored-rate cap, capital gains pay the ladder rate. The convergence is what makes the ladder load-bearing for the top of the wealth distribution.
- Estate Tax Prepayment Plan
- Wealth above the canonical threshold pays the estate tax prepayment on stock; flow income pays the ladder. Together they tax both sides of accumulation.
- VAT with Pre-bate
- VAT pre-bate (~$290/adult/month) offsets consumption-tax incidence on lower-income households so the combined federal incidence stays progressive at the bottom.
Comprehensive base + ladder + convergence + payroll tax form the income-side spine of Engine 1. The four streams are inseparable in operation: the base is what the rates apply to; the rates are what the base produces revenue at; the convergence is what makes capital pay those rates above the lifetime cap; payroll tax is the parallel uncapped levy on compensation forms.
55% top rate is the highest in the OECD. Critics argue it will drive capital flight, top-talent emigration, and reduced US competitiveness for high-skill labor markets.
The 55% headline applies above $50M of income — a small filer base. The Civilization Premium prices departure: 40% exit tax on net worth above the $10M exemption plus realization of accrued gains on assets converted to fund departure. Alliance Incentive provides reciprocal market access for jurisdictions aligning tax floors. After the comprehensive base closes the conversion games used today, the effective top rate at v10 is competitive with peer democracies that already collect more total federal+state burden than the US does. Universal benefits (Distributed Healthcare, SS 2.0 floor, Skills Wallet, Universal Child Allowance) raise the floor on the same side of the ledger.
Honesty about gaps. The Accord's credibility comes partly from explicit acknowledgment of what is not yet specified. The items below are flagged for v10.2 specification or for outside expert review.
- Filing-status architecture at the top brackets: user-stated design (2026-04-30) is that joint-filing bracket-doubling at very high incomes requires an irrevocable joint-ownership filing testament, parallel to the estate-prepayment joint threshold. Without the testament, top brackets apply individually even if married. This rule is not yet specified in CFG, DNA, or canonical parameters — flagged for v10.2 specification.