Taxed as income, the top bracket would keep $3,150 of $5,000; tax-free, everyone keeps it all
Source. IRS, Rev. Proc. 2025-32, section 4.01, Tables 1–4 (tax rate tables for taxable years beginning in 2026). Also: Tax Policy Center, “Who Will Pay No Federal Individual Income Tax in 2025?” (Wayback capture). Tax year 2026.
Method and data
Method. Kept = $5,000 × (1 − statutory rate), at each 2026 federal rate, before phase-outs: the last dollar of income taxed at that rate, with no state income tax, no benefit phase-outs and no children’s payments taxed on parents’ returns. About 40% of tax units owe no federal income tax (Tax Policy Center, for 2025) and keep all of it. No share of tax units is assigned to any bracket, so no total is computed.
| Statutory rate | Kept of $5,000 |
|---|---|
| No federal income tax owed | 5,000 |
| 10% bracket | 4,500 |
| 12% bracket | 4,400 |
| 22% bracket | 3,900 |
| 24% bracket | 3,800 |
| 32% bracket | 3,400 |
| 35% bracket | 3,250 |
| 37% bracket | 3,150 |
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Higgins Strategy. “Taxed as income, the top bracket would keep $3,150 of $5,000; tax-free, everyone keeps it all” Exhibit 6, Five Thousand Dollars Each (Study XI). October 12, 2026. https://higginsstrategy.com/charts/11-04-tax-brackets-clawback/