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Proposal: No Federal Income Tax for Persons Earning $61,000 or Less







No Federal Income Tax and Tax Filing for People Earning 61,000 or Less


Summary

This proposal would eliminate federal individual income tax liability for people earning $61,000 or less in total wage income, simplifying the tax system for tens of millions of working Americans while having minimal impact on federal revenue. So those people  making about 29.33 an hour and under. Would pay zero federal income tax . And would not be required to file a tax return every year.  Payroll taxes would still be taken out of paychecks . For example Social Security and Medicare . And that's it no federal tax taken out of paychecks. 


Rationale



  • Based on IRS data from the past decade (2013–2022), households earning $61,000 or less make up approximately 50–60% of all U.S. tax filers.
  • This group contributes only 2–3% of all federal individual income tax revenue, equal to $53–$79 billion per year, depending on the year. That amount  is a rounding error in the Department of Defense. Trump’s Big Beautiful Bill increased the Defense budget from 895 billion to 1.045 trillion. And the budget for ICE went from 10 billion to over 100 billion.
  • The total amount of money collected by the IRS each year. Is between  4 and 5 trillion each year. 
  • Many in this group already pay little or no income tax due to the standard deduction and refundable credits like the Earned Income Tax Credit (EITC) and Child Tax Credit.
  • IRS data from 2021 shows that over 56 million returns had zero federal income tax liability, 93% of which came from filers with incomes under $50,000.   
  • In 12 states the average salary for teachers is below 61,000 . In Mississippi it is $53,704  in North Carolina it is $58,292 
  • I want you to really think about this. This group of people currently pay little to zero taxes. The money that is taken out of paychecks is returned  to them in a refund every year. What is the point of that?  What is the point of the time , money and stress. For these people filing tax returns every year?


Benefits



1. Simplifies the Tax System


  • Eliminates the need for tens of millions of low- and middle-income Americans to calculate and file federal income tax forms each year.
  • Allows for  pre-filled returns or no returns saving time for families and administrative costs for the IRS.



2. Saves Government Resources


  • Reduces IRS processing, auditing, and enforcement costs for returns that result in no net revenue.
  • Shifts focus to higher-income and complex returns where enforcement has higher yield.



3. Promotes Economic Fairness


  • Acknowledges that this income group already contributes through payroll taxes, sales taxes, and local taxes.
  • Keeps more take home pay in the hands of working class families struggling with housing, healthcare, and childcare costs.


Fiscal Impact



  • The maximum annual revenue loss would be around $53 to $79 billion, based on 2022 IRS data.
  • This could be offset by any combination of the following:
    • Restoring individual tax rates on incomes above $400,000 to pre-2017 levels.
    • Phasing out loopholes and preferential treatment for capital gains at the top 1%.
    • Modest reductions in inefficient federal programs or defense budget items 



Implementation Framework



  • Eligibility: Applies to persons  with total wage/salary income of $61,000 or less .
  • Automatic Exemption: IRS software and W-2 reporting would automatically exclude these households from income tax liability.
  • Optional Filing: Taxpayers under the threshold may still file if they qualify for refundable credits.




Important Note - It will be no required filing of Tax Returns. You can still voluntarily file a Tax Return.  Also this focuses on the federal income tax. If you are a gig worker. For example Uber and Door Dash. You are not officially an employee. You are a private contractor. You receive a 1099 . You pay the self employment tax. What is the self employment tax. It’s Social Security and Medicare. If you take no deductions. The IRS can calculate your much you owe in Social Security and Medicare. If you want to take deductions such as gas and other expenses. You can still voluntarily file a tax return.



Conclusion



This is not a giveaway. It's an efficiency  upgrade. It's about respecting people's time and modernizing a broken system. Because if the government  already knows what you earned. And you don't owe anything. Why make you jump through hoops?

It's a time cut for working people. Let's stop wasting billions  on red tape , and start using it to simplify life for the people that make this country run. Eliminating federal income taxes for persons earning $61,000 or less is a fiscally responsible, administratively efficient, and economically just reform. The cost to the federal budget is minor, and the benefit to tens of millions of households is substantial. Let's build a tax code that reflects common sense , not red tape.  This deserves a vote in Congress. And those who vote against it should and will be held accountable. The math works. This is a 100% feasible plan. Anyone who claims otherwise is either misinformed or deliberately misleading the public.

For Republicans who oppose revisiting the 2017 tax cuts, adjusting capital gains taxes, or reducing military spending , fine. There are hundreds of other ways to recover the $53 to $79 billion in revenue. The money is not the issue. The real question is this. Are there enough members of Congress who actually care about hardworking Americans?


Every day, millions of people work full time or more and still struggle to get ahead. They fight just to keep their heads above water. Congress must act. Not just talk, act. Let’s be honest. Congress has talked about the housing crisis for years and done virtually nothing. It has talked for  many years   about ways to save Social Security and Medicare from  insolvency , but never followed through with real solutions.


Eliminating federal income tax for those earning $61,000 or less won’t make anyone rich. But it will help millions of Americans breathe a little easier. It will make survival less of a daily struggle. That alone makes it worth doing.








Additional information on Pre-filled tax returns




Several countries use pre-filled tax returns — a system where the government prepares your tax form using information it already has (such as income from employers or banks), and the taxpayer simply confirms or corrects it. This system greatly reduces the burden on individuals and increases compliance.

🌍 Countries Using Pre-Filled Tax Returns

✅ 1. Estonia

  • Fully digital tax system — most taxpayers file in under 5 minutes.

  • Pre-filled forms based on employer, bank, and government data.

  • Nearly all taxpayers file online.

✅ 2. Sweden

  • Taxpayers receive a pre-filled tax form (paper, phone, or online).

  • Can confirm by text, phone, or app.

  • Used by ~75% of Swedes with no need for further action.

✅ 3. Denmark

  • Tax agency (SKAT) provides pre-completed returns.

  • Taxpayers confirm or amend the return online.

  • High accuracy from employer and financial institution data.

✅ 4. Norway

  • The Norwegian Tax Administration sends a pre-filled return to most citizens.

  • Includes wages, interest, and deductions.

  • Most taxpayers only need to review and approve.

✅ 5. Finland

  • Receives tax return proposal with most data pre-filled.

  • Taxpayer checks and makes corrections if necessary.

  • Known for accuracy and efficiency.

✅ 6. New Zealand

  • Inland Revenue auto-calculates income tax for wage earners.

  • Most taxpayers don’t need to file unless they have extra income.

  • “Auto-assessment” became standard starting in 2019.

✅ 7. Chile

  • SII (tax service) sends a pre-populated return to individuals.

  • Taxpayers approve or make edits online.

  • Used by millions of Chileans with great success.

✅ 8. Spain

  • “Renta Web” system gives pre-filled tax drafts online.

  • Taxpayers accept or modify the draft.

  • Longstanding part of their tax system.

⚠️ Countries That Don't Use It (But Could)

❌ United States

  • The IRS has the data (W-2s, 1099s, etc.) to pre-fill for most Americans.

  • Tax lobby groups (notably Intuit and H&R Block) have historically lobbied against this.

✍️ Summary

Region Pre-Filled Returns Used? Notes
Nordics (Sweden, Denmark, Norway, Finland) ✅ Yes Most advanced; pre-filled, quick to confirm
Baltics (Estonia) ✅ Yes Fastest digital tax system in the world
Spain & Chile ✅ Yes Pre-filling widely used
New Zealand ✅ Yes Auto-assessment for wage earners








Below is rough draft of Bill.


---


## **120th CONGRESS**


**1st Session**


---


### **H.R. XXXX**


**To amend the Internal Revenue Code of 1986 to eliminate federal income tax liability and filing requirements for individual taxpayers with annual earned income of \$61,000 or less, and for other purposes.**


---


**IN THE HOUSE OF REPRESENTATIVES**


Kincaid  introduced the following bill; which was referred to the Committee on Ways and Means.


---


### **A BILL**


**To eliminate federal income tax liability and filing requirements for individual taxpayers with annual earned income of \$61,000 or less, and for other purposes.**


---


#### **SECTION 1. SHORT TITLE**


This Act may be cited as the **“ Real Tax Reform And Simplification Act of 2027 ”**


---


#### **SEC. 2. INCOME TAX EXEMPTION FOR INDIVIDUALS EARNING \$61,000 OR LESS**


(a) **In General**.—Section 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:


> “(j) **Exemption for Low-Income Earners**.—

> (1) Notwithstanding any other provision of this section, in the case of an individual whose adjusted gross income from wage or salary income does not exceed \$61,000 during the taxable year—

>     (A) no tax shall be imposed under this section, and

>     (B) such individual shall not be required to file a return under section 6012 unless otherwise required to claim a refundable credit.

> (2) This subsection shall apply regardless of filing status or number of dependents.”


---


#### **SEC. 3. AUTOMATIC FILING EXEMPTION MECHANISM**


(a) **Automatic Exemption via Reporting Entities**.—

The Secretary of the Treasury shall establish regulations requiring that all W-2 and 1099 income reporting entities submit income data in a manner that enables the IRS to automatically identify and exclude qualifying individuals from filing requirements under section 6012 of the Internal Revenue Code of 1986.


(b) **Voluntary Return Filing**.—

Nothing in this Act shall prevent an eligible taxpayer from voluntarily filing a tax return for the purposes of claiming a refund or any refundable tax credit.


---


#### **SEC. 4. SELF-EMPLOYMENT TAX TREATMENT**


(a) Individuals with income reported solely via Form 1099 who earn less than or equal to \$61,000 in a taxable year shall remain subject to the self-employment tax under section 1401 of the Internal Revenue Code of 1986.


(b) Such individuals shall not be required to file a federal income tax return unless electing to deduct eligible business expenses or claim refundable credits.


---


#### **SEC. 5. FISCAL OFFSET**


To offset any reduction in federal revenue resulting from the provisions of this Act, the following changes shall be enacted:


(1) The top marginal individual income tax rate shall revert to the rate in effect prior to the Tax Cuts and Jobs Act of 2017.


(2) The preferential tax rate for capital gains income on earnings over \$1,000,000 shall be eliminated.



---


#### **SEC. 6. EFFECTIVE DATE**


This Act shall apply to taxable years beginning after December 31, 2027.


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Project 2029    #project2029 
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Location: Seattle, WA, USA

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