Build Back Better Tax Calculator
Estimate the income tax and SALT deduction changes the Build Back Better Act would have created, compared to 2025 current law.
🏛️ What is the Build Back Better Tax Calculator?
The Build Back Better (BBB) Tax Calculator is a policy comparison tool that shows how federal income taxes and SALT deductions would have changed if the Build Back Better Act had become law, compared to the current 2025 federal tax code. The Build Back Better Act was a major US legislative proposal passed by the House of Representatives in November 2021. It proposed approximately $1.75 trillion in spending on social programs, healthcare, housing, and climate initiatives, funded partly through higher taxes on very high earners.
The two main individual income tax provisions in the BBB were a new 39.6% top income tax rate starting at taxable incomes above $400,000 (single) or $450,000 (married filing jointly), and a significant increase in the SALT (state and local taxes) deduction cap from $10,000 to $80,000. Under current 2025 law, the top federal rate is 37% and does not begin until taxable income exceeds $626,350 (single) or $751,600 (MFJ). BBB would have lowered the top-rate threshold and raised the rate itself, producing higher taxes for earners in the $400,000 to multi-million dollar range. For very high earners above $10 million in Modified Adjusted Gross Income, BBB added a 5% surcharge, with an additional 3% on income above $25 million.
The SALT provision was designed to partially reverse the 2017 Tax Cuts and Jobs Act, which capped the previously unlimited SALT deduction at $10,000. This cap hurt homeowners in high-tax states including New York, New Jersey, California, Connecticut, and Massachusetts who often pay $20,000 to $60,000 or more in combined state income and property taxes. Raising the cap to $80,000 would have allowed these households to deduct far more of their state and local tax burden from their federal taxable income, reducing their federal tax bill.
The bill never passed the Senate. Senator Joe Manchin announced his opposition in December 2021, effectively ending the bill. A significantly reduced version later passed as the Inflation Reduction Act in August 2022, which focused on corporate taxes and clean energy credits rather than the individual income tax changes in BBB. This calculator lets you explore the hypothetical individual income tax and SALT impacts using current 2025 federal brackets for the comparison baseline.
📐 Formula
BBB Income Tax = bracket_tax(taxable, BBB_brackets) + surcharge(income)
Taxable Income = Gross Income − Federal Standard Deduction ($15,000 single / $30,000 MFJ / $22,500 HOH for 2025)
BBB Brackets (Single): 10% to 35% (same as current law below $250,525) then 35% on $250,525–$400,000, then 39.6% on $400,000+
BBB Brackets (MFJ): same lower brackets; 39.6% starts at $450,000 taxable income
Surcharge = 5% × max(0, MAGI − $10,000,000) + 3% × max(0, MAGI − $25,000,000)
Tax Difference = BBB Tax − Current Law Tax (positive = more under BBB; negative = less)
SALT Savings = (min(SALT, $80,000) − min(SALT, $10,000)) × Marginal Rate (when itemizing produces benefit)
Example (Income Tax): Single, $500,000 income: taxable = $485,000. Current 35% on $250,525–$485,000 = $82,066. BBB 35% on $250,525–$400,000 + 39.6% on $400,000–$485,000 = $52,316 + $33,660 = $85,976. BBB costs $3,910 more.
📖 How to Use This Calculator
Steps
1
Choose Income Tax Impact or SALT Cap Impact - select Income Tax Impact to compare federal income taxes under current law versus the BBB 39.6% rate. Select SALT Cap Impact to see how the proposed $80,000 SALT cap would have changed your federal deduction.
2
Select your filing status and enter your income - choose Single, Married Filing Jointly, or Head of Household, then enter your annual gross income. For SALT mode, also enter your total annual SALT payments (combined state income tax plus property taxes).
3
Click Calculate to see the comparison - press Calculate to see the side-by-side comparison. Income Tax mode shows both tax amounts, the dollar difference, and effective rates. SALT mode shows your deductible SALT under each law and estimated federal tax savings.
💡 Example Calculations
Example 1 - Single Filer at $300,000 (No BBB Impact)
Single filer earning $300,000 - below the BBB 39.6% threshold
1
Taxable income = $300,000 − $15,000 std ded = $285,000. Under current law this falls in the 35% bracket. Under BBB, the 39.6% bracket starts at $400,000 taxable income, so this $285,000 taxable income is ALSO in the 35% bracket under BBB.
2
Current tax = 10%×$11,925 + 12%×$36,550 + 22%×$54,875 + 24%×$93,950 + 32%×$53,225 + 35%×$34,475 = $1,193 + $4,386 + $12,073 + $22,548 + $17,032 + $12,066 = approximately $69,298.
3
BBB tax = same brackets apply below $400K = $69,298. Difference = $0. A $300,000 earner sees no federal income tax increase under the BBB individual income tax provisions.
Result = No change - BBB income tax provisions did not affect earners below $400K
Try this example →Example 2 - Single Filer at $500,000 (BBB Costs More)
Single filer earning $500,000 - above the BBB 39.6% threshold
1
Taxable income = $500,000 − $15,000 = $485,000. Current law: 35% bracket applies from $250,525 to $485,000. 35% × ($485,000 − $250,525) = 35% × $234,475 = $82,066.
2
Under BBB: 35% applies only up to $400,000 taxable, then 39.6% above. 35% × ($400,000 − $250,525) = $52,316 PLUS 39.6% × ($485,000 − $400,000) = 39.6% × $85,000 = $33,660. BBB top portion = $52,316 + $33,660 = $85,976.
3
Tax difference = $85,976 − $82,066 = $3,910 more under BBB. Current effective rate = $139,297/$500,000 = 27.9%. BBB effective rate = $143,207/$500,000 = 28.6%. Marginal rate under current law = 35%; under BBB = 39.6%.
Result = $3,910 more tax under BBB at a 39.6% marginal rate vs 35% under current law
Try this example →Example 3 - MFJ with $40,000 SALT (SALT Cap Impact)
Married couple with $200,000 income paying $40,000 in state and property taxes
1
Under current law: SALT deductible = min($40,000, $10,000) = $10,000. The standard deduction for MFJ is $30,000, which exceeds $10,000, so itemizing does not help. The taxpayer takes the $30,000 standard deduction.
2
Under BBB: SALT deductible = min($40,000, $80,000) = $40,000. Since $40,000 exceeds the $30,000 standard deduction, this household would now switch to itemizing. Extra deduction vs standard = $40,000 − $30,000 = $10,000 in additional deductions.
3
The marginal rate at $200,000 (MFJ) is 22%. Tax savings from the extra $10,000 deduction = $10,000 × 22% = $2,200 in annual federal tax savings under BBB.
Result = $2,200 annual federal tax savings under the BBB SALT cap increase
Try this example →❓ Frequently Asked Questions
What was the Build Back Better Act and what happened to it?
The Build Back Better Act (H.R. 5376) was a roughly $1.75 trillion social spending and climate bill passed by the House 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 opposed it in December 2021. A scaled-back version became the Inflation Reduction Act, signed in August 2022. The individual income tax provisions (39.6% rate, SALT expansion) were not included in the IRA.
What was the BBB proposed 39.6% tax rate and who would it have affected?
The BBB proposed a new top federal income tax rate of 39.6%, applied to taxable income above $400,000 for single filers and $450,000 for married filing jointly. This was lower than the current 37% top rate threshold of $626,350 (single) or $751,600 (MFJ). Under BBB, all taxable income above $400K/$450K would have been subject to 39.6%, replacing both the current 35% bracket and 37% bracket above those amounts. Earners below those thresholds would have seen no change in income tax rate.
How would the SALT deduction change under Build Back Better?
The BBB proposed raising the SALT deduction cap from $10,000 to $80,000 for tax years 2021 through 2030. The current $10,000 cap was set by the 2017 Tax Cuts and Jobs Act and limits deductions for state income taxes, local income taxes, and property taxes combined. An $80,000 cap would have allowed residents of high-tax states paying $20,000 to $60,000 in state and property taxes to deduct far more, significantly reducing their federal taxable income if they itemize.
Does the Build Back Better Calculator include the Child Tax Credit expansion?
No. The BBB proposed expanding the CTC to $3,600 per child under 6 and $3,000 per child ages 6 to 17, delivered partly as monthly payments. This calculator focuses on the income tax rate changes (39.6% rate and surcharges) and the SALT deduction cap increase, which are the two most commonly discussed individual income tax provisions. The CTC expansion was a separate provision that would have primarily benefited low and middle-income families with children.
What did the Inflation Reduction Act include from the Build Back Better Act?
The Inflation Reduction Act (IRA), signed August 2022, was a scaled-back successor to BBB. The IRA focused on corporate tax changes and clean energy rather than individual income taxes. It included a 15% alternative minimum tax on the book income of large corporations with over $1 billion in annual profits, a 1% excise tax on corporate stock buybacks, and extended and enhanced clean energy tax credits. The BBB individual provisions (39.6% top rate, SALT increase, CTC expansion) were not included.
Who benefits most from the BBB SALT cap increase?
The SALT increase primarily benefits upper-middle-income homeowners in high-tax states who itemize deductions. A household in New Jersey paying $25,000 in property taxes and $15,000 in state income taxes totals $40,000 in SALT. Currently they can only deduct $10,000. Under BBB's $80,000 cap, they would deduct the full $40,000. At a 24% marginal rate, the additional $30,000 deduction saves $7,200. High earners in New York, California, Connecticut, Massachusetts, and Illinois see the largest SALT benefits.
What were the BBB surcharges on very high incomes?
The BBB included surcharges on very high incomes beyond the regular bracket system. A 5% surcharge applied to Modified Adjusted Gross Income above $10 million, and an additional 3% surcharge applied to MAGI above $25 million. Combined with the 39.6% top bracket, income in the $10M-$25M range would face a 44.6% combined federal rate. Income above $25 million would face a 47.6% rate. These surcharges were estimated to affect fewer than 25,000 taxpayers nationally.
How accurate is this calculator for the BBB tax estimates?
This calculator uses the 2025 standard deductions and federal brackets as the current-law baseline, then applies the BBB proposed rate changes and surcharges. It assumes you take the standard deduction, have no itemized deductions other than SALT (in SALT mode), and no large investment income, pass-through business income, or other adjustments. Real-world BBB tax impact would vary based on AMT exposure, qualified business income deductions, capital gains rates, and other factors. The calculator is designed for a conceptual comparison, not precise tax planning.
Would BBB have raised taxes on the middle class?
No. The individual income tax provisions in the House-passed BBB were specifically designed to affect only earners above $400,000 (single) or $450,000 (MFJ) in taxable income. The Biden administration's stated commitment was that no household earning under $400,000 would face a tax increase from BBB. The SALT cap increase would actually have reduced taxes for many upper-middle-income households in high-tax states. The corporate minimum tax in the eventual IRA may indirectly affect prices and wages, but that is separate from direct individual income tax changes.
What is the difference between the current 37% rate and the BBB 39.6% rate?
The difference is 2.6 percentage points on the top bracket, but the larger impact comes from the lower threshold. Under current 2025 law, 37% applies to taxable income above $626,350 (single). Under BBB, 39.6% would have started at just $400,000 taxable income. A single filer with $700,000 taxable income currently pays 35% on income from $250,525 to $626,350 and 37% on $626,350 to $700,000. Under BBB, 39.6% would apply to everything above $400,000, costing this filer roughly $21,000 more annually.