A group of Senate Democrats has introduced a bill that would eliminate federal income taxes for many low- and middle-income Americans. Supporters claim it would provide permanent tax relief for nearly 130 million workers and families. The measure, named the Working Americans’ Tax Cut Act, was introduced on March 12 by Senators Chris Van Hollen, Mark Kelly, Kirsten Gillibrand, Cory Booker, and Andy Kim, along with Representative Don Beyer in the House.
Under the proposal, single filers earning up to $46,000 would not owe any federal income tax. The threshold would increase to $64,400 for heads of household and $92,000 for married couples filing together.
The bill would also reduce taxes for many people earning above these amounts, providing benefits up to about 175 per cent of each exemption threshold, which is approximately $80,500 for single filers and $161,000 for married couples filing jointly.
The legislation would create an alternative maximum tax based on living costs. Instead of directly changing the current tax brackets, it would limit a qualifying filer’s income tax to 25.5 percent of modified adjusted gross income above the cost-of-living exemption. Taxpayers would calculate what they owe under both the current law and the new system, then pay the smaller amount.
TAX BILL: Democrats introduce a plan to eliminate federal income taxes for individuals earning under $46K and couples under $92K, while raising rates on millionaires.pic.twitter.com/WJwI2tr4Dd
— Derrick Evans (@DerrickEvans4WV) March 14, 2026
Supporters of the bill argue this structure would leave many lower earners with no federal income tax liability and also lower taxes for middle-income households. Newsweek reported that someone earning $50,000 could see a tax cut of around $2,800. The sponsors also claim the bill would provide widespread relief as families struggle with high living costs.
To fund the tax cuts, the bill would introduce a graduated surtax on high earners. It would implement a 5 percent tax on income exceeding $1 million for single filers and $1.5 million for married couples. A 10 percent tax would apply to income above $2 million and $3 million, respectively.
Finally, a 12 percent tax would be imposed on income over $5 million and $7.5 million for joint filers. The surtax would apply to wages, salaries, capital gains, and other investment income, according to Beyer’s office.
The Yale Budget Lab estimates the proposal would be roughly budget-neutral over 10 years. It predicts that the tax cuts would cost about $1.6 trillion, while the surtax would cover that amount over the same period. The group also estimates around 615,000 tax filers would be affected by the surtax, with the largest cuts occurring in the middle of the income distribution.
Americans are working harder & longer & still can’t make ends meet.
I’m proposing a bill to cut taxes for 130 million workers, paid for by a surtax on income over $1 million a year.
It’s time our tax code worked for working people & the wealthiest pay their fair share. pic.twitter.com/VOIhRhOxQo
— Senator Chris Van Hollen (@ChrisVanHollen) March 13, 2026
“Far too many Americans are working hard for their paychecks but still having trouble making ends meet,” Van Hollen said in a statement about the bill. “These Americans, who are earning just enough to get by and meet their basic living expenses, should not have to pay a federal income tax.”
The bill comes as Democrats work to strengthen their economic message before the midterms. However, its chances in Washington are uncertain. Recent discussions have noted that it could face significant challenges in a Republican-controlled Congress and under President Donald Trump.
