Bipartisan Tax Fairness Act of 2025

The Bipartisan Tax Fairness Act of 2025 would overhaul the individual income tax system by making permanent a set of expiring tax rates and introducing a new top rate for higher earners. It replaces current tax brackets with a standardized eight-tier structure (for most filing statuses) that ranges from 10% to 39.6%, with specific income thresholds that vary by filing status (Married Filing Jointly/Surviving Spouse, Head of Household, Single, Married Filing Separately) and a distinct top bracket for estates and trusts. The act also enacts inflation-indexing of brackets, adjusts rounding rules for tax computations, and makes related conforming changes. It applies to taxable years beginning after December 31, 2025, effectively taking effect in 2026, and includes transitional provisions to manage how these changes interact with existing Internal Revenue Code provisions. In short, the bill would (1) set new, permanent tax brackets with a top rate of 39.6% on high incomes, (2) standardize inflation adjustments for bracket thresholds, and (3) adjust some technical rules to support the new structure, while leaving estates and trusts with a 37% top rate but under different thresholds. The overall aim is to stabilize and clarify the tax rates available to taxpayers beyond 2025, with higher earners facing the new top rate.