Should taxes on households earning over $400,000 per year be increased, decreased, or kept the same? (they already paying 35%-37% of their income for taxes)

Background

The United States uses a progressive federal income tax system with seven brackets, currently ranging from 10 percent to 37 percent. Households earning over $400,000 fall into the top brackets, where the marginal rate on income above roughly $609,000 (for single filers) is 37 percent — though it is important to note that this rate applies only to income above that threshold, not to every dollar earned. According to the Tax Foundation's analysis of IRS data, the top 1 percent of earners pay an effective average federal income tax rate of about 26 percent and contribute roughly 37 percent of all federal individual income taxes collected, despite earning about 19.5 percent of all income. The 2017 Tax Cuts and Jobs Act, which lowered the top rate from 39.6 percent to 37 percent, was recently made permanent through the One Big Beautiful Bill Act signed in 2025. Meanwhile, the Congressional Budget Office projects a $1.9 trillion federal deficit in fiscal year 2026 and warns that the nation's fiscal trajectory is unsustainable, with federal debt projected to reach 120 percent of GDP by 2036.

Supporters of raising taxes on high-income households argue that doing so would generate significant revenue to reduce deficits, fund public services, and address growing income inequality. The Center on Budget and Policy Priorities has noted that ending the 2017 tax cuts for high-income households alone would have avoided 41 percent of the roughly $3.9 trillion cost of extending the full law. Some economists point to research suggesting that moderate tax increases on top earners do not significantly harm overall economic growth or reduce their labor supply. Opponents counter that higher marginal rates create deadweight economic losses by discouraging investment, entrepreneurship, and work effort among the most productive earners. They also point out that high-income taxpayers already shoulder a disproportionate share of the tax burden, and that raising rates further could lead to capital flight or increased use of tax avoidance strategies, ultimately yielding less revenue than projected.

The stakes of this debate extend well beyond top earners. According to the Yale Budget Lab, the existing tax code already treats filers with similar incomes very differently, with effective tax rates for top earners varying widely based on their income sources. Decisions about high-income tax rates directly affect the federal government's ability to fund Social Security, Medicare, infrastructure, and other programs that millions of Americans depend on. With federal debt at historic levels and trust fund insolvency projected within a decade, how policymakers balance revenue needs against economic growth concerns will shape fiscal policy for a generation.