Individual income tax increases in Build Back Better proposal would mostly affect Arizonans in the top 1 percent

Estimates of the distributional impact of the U.S. House Ways & Means individual income tax provisions in Arizona, by household income

Estimates are for 2022, and include provisions that would: 1) Restore top ordinary tax rate for taxable income above $450k/$425k/$400k, 2) Increase top capital gains and dividends rate to 25%, align with top ordinary bracket, 3) Close loophole in 3.8% investment tax for active business income, 4) Limit 20% deduction for pass-through business income under sec. 199A to $500k/$400k, 5) Make permanent the limits on pass-through business losses (no effect in 2022), 6) Create a three percent surcharge on adjusted gross income in excess of $5 million.