Raise the Top Marginal Individual Income Tax Rate to 50 Percent

The current top marginal income tax rate is 37 percent. In 2026, it applies to income above $626,351 for single filers and $751,601 for joint filers. This option permanently raises the top rate to 50 percent. Raising the top marginal tax rate would increase the tax burden on labor income and on pass-through business income, reducing incentives to work and invest.

On a conventional basis, this option would decrease the primary deficit by $1,603.8 billion over the budget window. Long-run GDP would fall by 1.4 percent, and long-run GNP would fall by 1.2 percent. On a dynamic basis, the primary deficit would decrease by $411.2 billion from 2027 through 2036, $1,192.6 billion less than the conventional estimate. Incorporating changes in interest costs, the publicly held debt-to-GDP ratio would be unchanged from baseline, reaching 175.9 percent by 2056.

This option would primarily affect high-income taxpayers, reducing the after-tax income of the top quintile by 1.4 percent and of the top 0.1 percent by 6.4 percent in 2036. On a long-run dynamic basis, taxpayers would see a 1.9 percent decrease on average.