H.R. 4280: Bipartisan Tax Fairness Act of 2025

The Bipartisan Tax Fairness Act of 2025 proposes changes to the federal income tax structure by modifying tax rates for various categories of taxpayers. Below are the key components of the bill:

1. New Tax Brackets and Rates

The bill amends the Internal Revenue Code to establish new income tax brackets for different categories of taxpayers, including:

• Married individuals filing jointly and surviving spouses:
  • 10% on income up to $19,050
  • 12% on income between $19,050 and $77,400
  • 22% on income between $77,400 and $165,000
  • 24% on income between $165,000 and $315,000
  • 32% on income between $315,000 and $400,000
  • 35% on income between $400,000 and $600,000
  • 37% on income between $600,000 and $2,000,000
  • 39.6% on income over $2,000,000
• Heads of households:
  • 10% on income up to $13,600
  • 12% on income between $13,600 and $51,800
  • 22% on income between $51,800 and $82,500
  • 24% on income between $82,500 and $157,500
  • 32% on income between $157,500 and $200,000
  • 35% on income between $200,000 and $500,000
  • 37% on income between $500,000 and $1,000,000
  • 39.6% on income over $1,000,000
• Unmarried individuals (other than heads of households):
  • 10% on income up to $9,525
  • 12% on income between $9,525 and $38,700
  • 22% on income between $38,700 and $82,500
  • 24% on income between $82,500 and $157,500
  • 32% on income between $157,500 and $200,000
  • 35% on income between $200,000 and $500,000
  • 37% on income between $500,000 and $1,000,000
  • 39.6% on income over $1,000,000
• Married individuals filing separately:
  • 10% on income up to $9,525
  • 12% on income between $9,525 and $38,700
  • 22% on income between $38,700 and $82,500
  • 24% on income between $82,500 and $157,500
  • 32% on income between $157,500 and $200,000
  • 35% on income between $200,000 and $300,000
  • 37% on income between $300,000 and $1,000,000
  • 39.6% on income over $1,000,000
• Estates and trusts:
  • 10% on income up to $2,550
  • 24% on income between $2,550 and $9,150
  • 35% on income between $9,150 and $12,500
  • 37% on income over $12,500

2. Cost-of-Living Adjustments

The bill includes provisions for annual inflation adjustments to the dollar amounts within each tax bracket. This adjustment is intended to prevent bracket creep, where taxpayers may be pushed into higher tax brackets solely due to inflation rather than real income increases.

3. Effective Date

Any changes made by the Act will take effect for taxable years beginning after December 31, 2025.

4. Other Amendments

The bill makes additional conforming amendments to ensure consistency with the new tax rates and brackets. Some sections of the current code will be repealed to accommodate these changes.

Relevant Companies

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