Progressive Income Tax and Top Rate
Engine: Engine 1
Framing
The income tax is restructured into 12 brackets topping at 52% on income above $10M (corridor 49.0–53.0% under the Debt Sunset Governor). 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 graduated steps. The twelfth bracket is the single top tier at $10M+. 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+
52% (single top tier)
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 single top tier (52%) on income above $10M, moving within the 49.0–53.0% Debt Sunset corridor.
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 49.00%–53.00%. Coupling preserves progressive burden distribution at all governor positions.
Progressivity check
After payroll tax (uncapped 28%), progressive income tax (0-52%), estate tax prepayment (0.8-2.0%), 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%+.