Progressive Income Tax and Top Rate

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: 41%, 45%, and a top rate of 52% on income above $10M, which moves within the 49.0–53.0% corridor under the Debt Sunset Governor. 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

41%

9

$2,000,000 – $10,000,000

45%

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 apply four-point steps 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, moving within the 49.0–53.0% Debt Sunset corridor.

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.

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 (0.80–2.00%), 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%+.