USA Income Tax Proposal

Income Tax on the Top 10 Percent

Our income tax that was meant to reach the rich now reaches the country. It was sold as a way to get at people getting massively rich while ordinary households already paid through the price of everything they bought. Prices still bite. Complexity still protects the returns that can use it. The Code still answers to the people who can steer it.

The Proposal

The federal individual income tax would apply only to the top 10 percent of returns by AGI, at or above $187,608 in tax year 2023. About 137.8 million returns fall below that lock; about 15.3 million remain. That top tenth already pays about 70 percent of the tax. The point is to keep the tax on high incomes.

What it does

  • Keep the income tax on the top 10 percent of returns
  • Take it off returns below that lock
  • Leave Social Security and Medicare payroll taxes in force
  • Simplify tax compliance and reduce time spent on recordkeeping and tax preparation.

Why it is important

  • Taking the income tax off returns below the top 10% removes the liability — and most of the Form 1040 paperwork — for about 138 million returns. That is who would not owe this tax, not a hard count of stopped filings.
  • IRS puts Form 1040 compliance at about 13 hours per return and more than 2 billion hours a year. National Taxpayers Union Foundation puts whole-code paperwork higher still: 6.55 billion hours and about $364 billion in 2022. Freeing the bottom 90% is where most of the Form 1040 household burden sits.
  • IRS operations cost about $18 billion a year — about 36 cents per $100 collected. Processing scales with returns; enforcement scales with dollars. A top-10% class tax cuts the processing load far more than enforcement, because the top tenth already pays about 70% of the tax.
Modernize Visual

IRS Definition of Direct Taxes (Educational Series)

"A tax that cannot be shifted to others, such as the federal income tax."

https://www.IRS.gov/ Understanding Taxes

IRS Definition of Indirect Taxes (Educational Series)

"A tax that can be shifted to others, such as business property taxes."

" An indirect tax is one that can be passed on -or shifted- to another person or group by the person or business that owes it."

https://www.IRS.gov/ Understanding Taxes

American Express Co. v. Michigan, 177 U.S. 404 (1900)

"As the means by which the burdens of taxes may be shifted are as multiform and as various as is the power to contract itself, it follows that the argument relied on, if adopted, would control almost every conceivable form of contract, and render them void if they had the result stated. Thus, the price of all property, the result of all production, the sum of all wages, would be controlled irrevocably by a law levying taxes if such a law forbade a shifting of the burden of the tax and avoided all acts which brought about that result. It cannot be doubted that to adopt by implication the view pressed upon us would be to virtually destroy all freedom of contract, and in its final analyses would deny the existence of all rights of property."

American Express Co. v. Michigan, 177 U.S. 404 (1900)

Moore v. United States (2024)

"Article I of the Constitution affords Congress broad “Power To lay and collect Taxes, Duties, Imposts and Excises.” Art. I, §8, cl. 1. That power includes “‘two great classes of’” taxes—direct taxes and indirect taxes. Brushaber v. Union Pacific R. Co., 240 U. S. 1, 13 (1916). Generally speaking, direct taxes are those taxes imposed on persons or property." ...

By contrast, indirect taxes are the familiar federal taxes imposed on activities or transactions. That category of taxes includes duties, imposts, and excise taxes, as well as income taxes. U. S. Const., Art. I, §8, cl. 1; Amdt. 16.

Moore v. United States, 602 U.S. 572 (2024)

Calculated with data from:

'Dataset: 'Table 3.1. Government Current Receipts and Expenditures [Billions of dollars].' U.S. Bureau of Economic Analysis. Last revised March 27, 2025. b) Dataset: 'Table 3.2. Federal Government Current Receipts and Expenditures [Billions of dollars].' U.S. Bureau of Economic Analysis. Last revised March 27, 2025. c) Dataset: 'Table 3.3. State and Local Government Current Receipts and Expenditures [Billions of dollars].' U.S. Bureau of Economic Analysis. Last revised March 27, 2025. d) Dataset: 'Table 5.11U. Capital Transfers Paid and Received, by Sector and by Type [Millions of Dollars; Quarters Seasonally Adjusted at Annual Rates].' U.S. Bureau of Economic Analysis. Last revised March 27, 2025."

Bureau of Economic Analysis: National Income