H.R. 2908: Middle Class Savings Act

This bill, known as the Middle Class Savings Act, aims to amend the Internal Revenue Code of 1986 by updating the thresholds for capital gains tax brackets to be in line with current income tax brackets. This change would effectively increase the income levels at which certain capital gains taxes apply. The specific adjustments proposed in the bill are as follows:

Key Amendments

• The threshold for the lower capital gains tax bracket would increase from $77,200 to $103,350.
• The next capital gains tax bracket threshold would rise from $51,700 to $69,200.
• The threshold for a higher capital gains tax bracket would increase from $479,000 to $626,350.
• The second higher threshold would go from $452,400 to $591,600.
• The third higher threshold would also see an increase from $425,800 to $591,600.

Effective Date

The changes proposed by this bill would take effect for taxable years beginning after December 31, 2024. This means that any capital gains realized in 2025 and beyond would be subject to the new thresholds if the bill passes.

Purpose of the Bill

The intent behind these changes is to adjust capital gains tax brackets to better reflect current economic conditions and income levels, potentially benefiting individuals who might otherwise pay higher taxes on capital gains due to inflation or wage growth over time.

Relevant Companies

None found