S.1243 - Paying a Fair Share Act of 2025 (119th Congress)
Summary
The "Paying a Fair Share Act of 2025" introduces a new tax on high-income taxpayers, defined as individuals (excluding corporations) with an adjusted gross income exceeding $1,000,000. This tax is designed to ensure that high-income earners pay a minimum level of federal taxes. The bill amends the Internal Revenue Code of 1986 by adding a new section that calculates the 'fair share tax' based on a percentage of adjusted gross income exceeding a certain threshold, while also considering charitable contributions and existing tax liabilities.
Expected Effects
The Act would increase the tax burden on high-income earners, potentially leading to increased government revenue. This revenue could then be used to fund various government programs or reduce the national debt. The bill also expresses the Senate's sentiment for broader tax reform to address loopholes and simplify the tax system.
Potential Benefits
- Increased government revenue from high-income earners.
- Potential for reduced budget deficits.
- Could fund public services or reduce the national debt.
- May lead to greater perceived fairness in the tax system.
- Encourages broader tax reform discussions.
Most Benefited Areas:
Potential Disadvantages
- May disincentivize investment and entrepreneurship among high-income earners.
- Could lead to tax avoidance strategies.
- May face legal challenges regarding fairness and equity.
- Potential for economic disruption if high-income earners reduce economic activity.
- Increased complexity in the tax code.
Most Disadvantaged Areas:
Constitutional Alignment
The bill's constitutionality is rooted in Article I, Section 8, which grants Congress the power to lay and collect taxes. The Sixteenth Amendment further clarifies this power by allowing Congress to tax income, "from whatever source derived," without apportionment among the states. However, challenges could arise under the Equal Protection Clause of the Fourteenth Amendment if the tax is deemed unfairly discriminatory.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).