Build Back Better Tax Calculator

The Build Back Better Act (H.R. 5376) was a roughly $1.75 trillion social spending and climate bill passed by the House of Representatives in November 2021. It proposed expanded healthcare, childcare, housing, and climate investments funded partly by higher taxes on the wealthy. The bill stalled in the Senate after Senator Joe Manchin announced his opposition in December 2021. A scaled-back version later became the Inflation Reduction Act, signed in August 2022.

The House-passed BBB included a new 39.6% top marginal rate on taxable income above $400,000 for single filers and $450,000 for married filing jointly, replacing the current 37% top bracket at a lower threshold. It also added a 5% surcharge on Modified AGI above $10 million and a further 3% surcharge on MAGI above $25 million. These changes were estimated to raise about $1.5 trillion over 10 years from high earners.

Under current 2025 law, the 37% rate applies to taxable income above $626,350 (single) or $751,600 (MFJ). Under BBB, the new 39.6% rate would have started at the much lower threshold of $400,000 (single) or $450,000 (MFJ). This means income between those thresholds and the current 37% bracket start would have jumped from 35% or 37% to 39.6%. The net result is a higher tax bill for most earners above $400,000.

The current SALT (state and local tax) deduction cap is $10,000, set by the 2017 Tax Cuts and Jobs Act. The BBB would have raised this cap to $80,000 for tax years 2021 through 2030. This was primarily a relief provision for residents of high-tax states like New York, California, New Jersey, and Connecticut who pay far more than $10,000 in combined state income and property taxes each year.

Only taxpayers with taxable income above $400,000 (single) or $450,000 (MFJ) would have paid higher income taxes due to the 39.6% rate. Earners with MAGI above $10 million would also face the 5% surcharge. Most American households below these thresholds would have seen no income tax increase from BBB's individual income tax provisions. However, the SALT cap increase primarily benefited upper-middle-income households in high-tax states.

SALT stands for state and local taxes, which includes state income tax, local income tax, and property taxes paid. Since 2018, the maximum federal deduction for SALT has been capped at $10,000 ($5,000 for married filing separately). Before the cap, high-income homeowners in expensive, high-tax states could deduct far more. The cap disproportionately affects taxpayers in New York, New Jersey, California, Connecticut, Illinois, and Massachusetts who itemize deductions.

The Inflation Reduction Act (IRA), signed in August 2022, included some corporate tax provisions from BBB but dropped the individual income tax rate increases and the SALT cap expansion. The IRA introduced a 15% corporate minimum tax on book income for large corporations, a 1% excise tax on corporate stock buybacks, and extended and expanded clean energy tax credits. The individual income provisions (39.6% top rate, SALT expansion) were not enacted.

The SALT Impact mode compares your deductible SALT under the current $10,000 cap versus the proposed $80,000 cap. It then applies your estimated federal marginal tax rate to the additional deduction to calculate potential tax savings. For example, if you pay $40,000 in SALT and your marginal rate is 24%, the extra deduction is $30,000 (from $10K to $40K deductible), producing estimated savings of $7,200 in federal tax. Savings are only shown if itemizing would be beneficial under BBB.

The BBB proposed expanding the Child Tax Credit to $3,600 per qualifying child under age 6 and $3,000 per child ages 6 through 17, making it fully refundable and delivered in monthly payments. These enhancements extended the temporary CTC expansion from the 2021 American Rescue Plan Act. This calculator focuses only on income tax rate changes and SALT; the CTC expansion would have benefited low and middle-income families with children separately.

The BBB surcharges were additional charges layered on top of income tax. A 5% surcharge on MAGI above $10 million would combine with the 39.6% top bracket to produce an effective marginal rate of 44.6% on income in the $10M-$25M range. A further 3% surcharge on MAGI above $25 million (for 8% total surcharge) would produce a marginal rate of 47.6% on income above $25 million. These surcharges were separate from and in addition to the regular income tax calculation.

Under current 2025 law, the top federal income tax rate is 37%, applying to taxable income above $626,350 (single) or $751,600 (MFJ). Under BBB, the top rate would have been 39.6%, applied at a much lower threshold of $400,000 (single) or $450,000 (MFJ). The 2.6 percentage point rate increase on income above $400K plus the lower threshold means a single filer at $700,000 of taxable income would have paid roughly $7,800 to $15,000 more in federal income tax under BBB compared to current law.