S. 4393Senate117th Congress (2021-2023)In Committee

Middle-Class Savings and Investment Act

Introduced June 14, 2022

AI-Generated Summary

Updated February 8, 2026 at 3:58 PM UTC

The Middle-Class Savings and Investment Act changes the tax code to lower the top capital‑gains rate and expand the zero‑percent rate, create a partial exclusion for certain interest income, raise the net investment income tax threshold, boost the Saver’s Credit, and extend the state‑and‑local tax deduction limit through 2028. It mainly impacts individual taxpayers, especially middle‑income earners and investors.

Key Provisions

  • Expands the zero‑percent capital‑gains rate to $165,000 for joint returns (half for single filers) with inflation adjustments and updates related 15‑percent rate thresholds.
  • Creates a new Section 116 that lets individuals exclude up to $300 ($600 for joint returns) of qualified interest, including certain money‑market fund dividends, from gross income.
  • Raises the net investment income tax threshold to $400,000 for joint filers (half for others) and indexes it for inflation.
  • Increases the Saver’s Credit maximum contribution to $2,500 and sets the credit rate at 50 %, with higher income phase‑out thresholds ($45,000 joint, etc.) and inflation adjustments.
  • Extends the $10,000 limit on state and local tax deductions from 2026 to 2029, effective for taxable years beginning after Dec 31 2022.

Legislative Activity

Stay on top of the latest movement without scrolling through every action

1 earlier action
SenateIntro Referral Latest Action

Read twice and referred to the Committee on Finance. (Sponsor introductory remarks on measure. CR S2942-2943)

June 14, 2022

View full timeline
SenateIntro Referral

Introduced in Senate

June 14, 2022

SenateIntro Referral

Read twice and referred to the Committee on Finance. (Sponsor introductory remarks on measure. CR S2942-2943)

June 14, 2022

Floor Debate

23 members

What members said about S. 4393 on the floor

6 Republicans17 Democrats
Mariannette Miller-Meeks
Rep. Mariannette Miller-MeeksR-IA-2 · Mar 2, 2022

Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise today in opposition to H.R. 3967, the PACT Act. I wish that this were not the case. I would love to be here today standing…

Mark Takano
Rep. Mark TakanoD-CA-41 · Mar 2, 2022

Mr. Speaker, pursuant to House Resolution 950, I call up the bill (H.R. 3967) to improve health care and benefits for veterans exposed to toxic substances, and for other purposes, and ask for its…

Richard J. Durbin
Sen. Richard J. DurbinD-IL · Jun 14, 2022

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. Mr. President, it is hard to believe it was 50 years ago this week--50 years ago--when five men were caught…

Mitch McConnell
Sen. Mitch McConnellR-KY · Jun 14, 2022

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. A few months ago, from this desk, I talked about the results of a recall election in San Francisco. In…

Chuck Grassley
Sen. Chuck GrassleyR-IA · Jun 14, 2022

Mr. President, I come to the floor to tell my colleagues about a bill I am introducing today to encourage savings. To set the stage for the necessity of that bill, I am going to speak for a minute…

Show 8 more
Chuck Grassley
Sen. Chuck GrassleyR-IA · Jun 14, 2022

Mr. President, I come to the floor to tell my colleagues about a bill I am introducing today to encourage savings. To set the stage for the necessity of that bill, I am going to speak for a minute…

John Cornyn
Sen. John CornynR-TX · Jun 14, 2022

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. Mr. President, I ask unanimous consent that I be allowed to complete my remarks before the Senate adjourns for…

Amy Klobuchar
Sen. Amy KlobucharD-MN · Jun 14, 2022

Thank you, Senator Cornyn, for the work you are doing and working with Senator Murphy and so many other Senators. You and I have done so many bills together, including the historic Save Our Stages…

John Thune
Sen. John ThuneR-SD · Jun 14, 2022

Mr. President, the latest inflation numbers came out on Friday, and it has become par for the course in the Biden economy that they weren't pretty. Inflation hit 8.6 percent in May, the worst…

Nancy Pelosi
Rep. Nancy PelosiD-CA-12 · Mar 2, 2022

Mr. Speaker, I thank the gentleman for yielding and for his kind words, which I accept on behalf of our working in a bipartisan way for our veterans over the years, Democrats and Republicans. And I…

Sheila Jackson Lee
Rep. Sheila Jackson LeeD-TX-18 · Mar 2, 2022

Mr. Speaker, I thank my distinguished friend for yielding. I rise enthusiastically joining the President and joining our chairman in pushing the Honoring our PACT Act and just remind the underlying…

Steny H. Hoyer
Rep. Steny H. HoyerD-MD-5 · Mar 2, 2022

Mr. Speaker, I thank Chairman Takano not only for yielding time, but much more importantly, I thank him for the extraordinary work he does on behalf of the Armed Forces and for its veterans. He is…

Raul Ruiz
Rep. Raul RuizD-CA-36 · Mar 2, 2022

Mr. Speaker, as we stand here right now, our servicemembers have returned home from the battlefield only to become delayed casualties of war due to their battlefield exposure to toxic burn pits. My…

Show 11 more
Charles E. Schumer
Sen. Charles E. SchumerD-NY · Jun 14, 2022

Mr. President, as we speak, the U.S. Senate is working on something not seen since the time we passed the Brady bill I authored nearly three decades ago: a bipartisan effort to draft meaningful gun…

Julia Brownley
Rep. Julia BrownleyD-CA-26 · Mar 2, 2022

Mr. Speaker, I have an amendment at the desk. Mr. Speaker, I rise to offer a straightforward amendment to H.R. 3967, the Honoring our PACT Act, which would simply ensure toxic-exposed veterans have…

Mike Levin
Rep. Mike LevinD-CA-49 · Mar 2, 2022

Mr. Speaker, I thank Chairman Takano for his leadership. Mr. Speaker, I rise today in strong support of the Honoring our PACT Act. All too often, many veterans hear the words ``thank you for your…

Elaine G. Luria
Rep. Elaine G. LuriaD-VA-2 · Mar 2, 2022

Mr. Speaker, as a 20-year veteran myself, it is an honor to stand before you today. I would say that the urgency of what our veterans are facing should not be lost on this body: Autoimmune disorders,…

Chris Pappas
Rep. Chris PappasD-NH-1 · Mar 2, 2022

Mr. Speaker, I thank Chairman Takano for yielding and for his leadership on this issue, which answers the call of our Nation's veterans, their advocates, and our veterans service organizations. I…

Cori Bush
Rep. Cori BushD-MO-1 · Mar 2, 2022

Mr. Speaker, I thank Mr. Takano for his leadership on this historic legislation. Mr. Speaker, St. Louis and I rise today in support of H.R. 3967, the Honoring our PACT Act, to expand healthcare,…

Bob Gibbs
Rep. Bob GibbsR-OH-7 · Mar 2, 2022

Mr. Speaker, I rise today in support of amendment No. 8 in the en bloc. This amendment helps veterans and their families navigate a bureaucratic maze at VA. It is very frustrating a lot of times when…

Abigail Davis Spanberger
Rep. Abigail Davis SpanbergerD-VA-7 · Mar 2, 2022

Mr. Speaker, my commitment to supporting veterans suffering from toxic exposures has been ironclad since I first met the late Michael Lecik, a father, a husband, a firefighter, and a veteran who died…

Jahana Hayes
Rep. Jahana HayesD-CT-5 · Mar 2, 2022

Mr. Speaker, today I rise to urge my colleagues to support the Honoring our PACT Act, which upholds the promise we made to servicemembers that we would care for them if they became sick or wounded…

Frank J. Mrvan
Rep. Frank J. MrvanD-IN-1 · Mar 2, 2022

Mr. Speaker, I am proud to rise today in support of Honoring our PACT Act. Respectfully, the impact of this piece of legislation will be veterans receive world-class healthcare. As I meet with…

Matt Cartwright
Rep. Matt CartwrightD-PA-8 · Mar 2, 2022

Mr. Speaker, here is the deal. When we send our servicemembers into harm's way the deal is that we are going to take care of them when they get back home. It is more than a deal; it is a pact. It is…

Bill Text

Latest available legislative text

Reading Mode
Latest
Introduced in SenateIssued June 14, 2022

II

117th CONGRESS

2d Session

S. 4393

IN THE SENATE OF THE UNITED STATES

June 14, 2022

Mr. Grassley (for himself, Mr. Barrasso, Mr. Daines, Mr. Lankford, Mr. Young, and Mr. Cassidy) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to modify the maximum capital gains tax rate, to modify the tax on net investment income, and for other purposes.

1.

Short title

This Act may be cited as the Middle-Class Savings and Investment Act.

2.

Modification of capital gain rates

(a)

Expansion of zero percent rate

(1)

In general

Section 1(h)(1)(B)(i) of the Internal Revenue Code of 1986 is amended by striking which would (without regard to this paragraph) be taxed at a rate below 25 percent and inserting below the maximum zero rate amount.

(2)

Maximum zero rate amount

Section 1(h) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(12)

Maximum zero rate amount

(A)

In general

The maximum zero rate amount shall be—

(i)

in the case of a joint return or surviving spouse, $165,000,

(ii)

in the case of any other individual (other than an estate or trust), an amount equal to ½ of the amount in effect for the taxable year under clause (i), and

(iii)

in the case of an estate or trust, $2,600.

(B)

Inflation adjustment

In the case of any taxable year beginning after 2021, each of the dollar amounts in subparagraph (A) shall be increased by an amount equal to—

(i)

such dollar amount, multiplied by

(ii)

the cost-of-living adjustment determined under subsection (f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2017 for calendar year 2016 in subparagraph (A)(ii) thereof.

If any increase under this subparagraph is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50.

.

(3)

Conforming amendments

Paragraph (5) of section 1(j) of such Code is amended—

(A)

in subparagraph (A), by striking shall be applied and all that follows through by substituting below the maximum 15-percent rate amount and inserting shall be applied by substituting below the maximum 15-percent rate amount,

(B)

in subparagraph (B)—

(i)

by striking all that preceding clause (ii),

(ii)

by redesignating clause (ii) as subparagraph (B),

(iii)

by redesignating subclauses (I) through (IV) of subparagraph (B) (as so redesignated) as clauses (i) through (iv), respectively, and

(iv)

by moving subparagraph (B) and each of clauses (i) through (iv) (as so redesignated) 2 ems to the left, and

(C)

in subparagraph (C), by striking clauses (i) and (ii) of.

(b)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2021.

3.

Partial exclusion of certain interest received by individuals

(a)

In general

Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to amounts specifically excluded from gross income) is amended by inserting after section 115 the following new section:

116.

Partial exclusion of certain interest received by individuals

(a)

Exclusion from gross income

Gross income does not include the sum of the amounts received during the taxable year by an individual as qualified interest.

(b)

Limitations

The aggregate amount excluded under subsection (a) for any taxable year shall not exceed $300 ($600 in the case of a joint return).

(c)

Qualified interest

For purposes of this section—

(1)

In general

The term qualified interest means any interest other than interest excluded from gross income under any other provision of this chapter.

(2)

Special rules for dividends received from certain money market mutual funds

(A)

In general

The term qualified interest shall include qualified interest-related dividends.

(i)

In general

Except as provided in clause (ii), a qualified interest-related dividend is any dividend or part thereof (other than a capital gain dividend or exempt interest dividend)—

(I)

paid by a regulated investment company regulated as a money market fund under section 270.2a–7 of title 17, Code of Federal Regulations, and

(II)

reported by the company as a qualified interest-related dividend in written statements furnished to its shareholders.

(ii)

Excess reported amounts

If the aggregate reported amount with respect to the company for any taxable year exceeds the applicable qualified interest of the company for such taxable year, a qualified interest-related dividend is the excess of—

(I)

the reported qualified interest-related dividend amount, over

(II)

the excess reported amount which is allocable to such reported qualified interest-related dividend amount.

(iii)

Allocation of excess reported amount

(I)

In general

Except as provided in subclause (II), the excess reported amount (if any) which is allocable to the reported qualified interest-related dividend amount is that portion of the excess reported amount which bears the same ratio to the excess reported amount as the reported qualified interest-related dividend amount bears to the aggregate reported amount.

(II)

Special rule for noncalendar year taxpayers

In the case of any taxable year which does not begin and end in the same calendar year, if the post-December reported amount equals or exceeds the excess reported amount for such taxable year, subclause (I) shall be applied by substituting post-December reported amount for aggregate reported amount and no excess reported amount shall be allocated to any dividend paid on or before December 31 of such taxable year.

(iv)

Definitions

For purposes of this subparagraph—

(I)

Reported qualified interest-related dividend amount

The term reported qualified interest-related dividend amount means the amount reported to its shareholders under clause (i) as a qualified interest-related dividend.

(II)

Excess reported amount

The term excess reported amount means the excess of the aggregate reported amount over the applicable qualified interest of the company for the taxable year.

(III)

Aggregate reported amount

The term aggregate reported amount means the aggregate amount of dividends reported by the company under clause (i) as qualified interest-related dividends for the taxable year (including qualified interest-related dividends paid after the close of the taxable year described in section 855).

(IV)

Post-December reported amount

The term post-December reported amount means the aggregate reported amount determined by taking into account only dividends paid after December 31 of the taxable year.

(V)

Applicable qualified interest

The term applicable qualified interest means interest described in paragraph (1).

(d)

Nonresident aliens ineligible for exclusion

Subsection (a) shall not apply to any nonresident alien individual.

(e)

Regulations

The Secretary may prescribe such regulations as are appropriate (including regulations requiring reporting) to apply this section in the case of interest received—

(1)

from partnerships and S corporations, and

(2)

from a trade or business of the taxpayer.

.

(b)

Conforming amendments

(1)

The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 115 the following new item:

.

(2)

Paragraph (2) of section 265(a) of such Code is amended by inserting before the period at the end the following: , or to purchase or carry obligations or shares, or to make deposits, to the extent the interest thereon is excludable from gross income under section 116.

(3)

Subsection (c) of section 584 of such Code is amended by adding at the end the following: The proportionate share of each participant in the amount of qualified interest (as defined in section 116) received by the common trust fund shall be considered for purposes of such section as having been received by such participant..

(4)

Subsection (a) of section 643 of such Code is amended by redesignating paragraph (7) as paragraph (8) and by inserting after paragraph (6) the following new paragraph:

(7)

Qualified interest

There shall be included the amount of any qualified interest (as defined in section 116) excluded from gross income pursuant to section 116 (reduced by amounts which would be deductible in respect of disbursements allocable to such income but for the provisions of section 265).

.

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2021.

4.

Modification of threshold amount under net investment income tax

(a)

In general

Section 1411(b) of the Internal Revenue Code of 1986 is amended to read as follows:

(b)

Threshold amount

For purposes of this chapter—

(1)

In general

The term threshold amount means—

(A)

in the case of a taxpayer making a joint return under section 6013 or a surviving spouse (as defined in section 2(a)), $400,000, and

(B)

in any other case, ½ of the dollar amount determined under paragraph (1).

(2)

Inflation adjustment

In the case of any taxable year beginning in a calendar year after 2022, the dollar amount in paragraph (1)(A) shall be increased by an amount equal to—

(A)

such dollar amount, multiplied by

(B)

the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2021 for calendar year 2016 in subparagraph (A)(ii) thereof.

Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $1,000.

.

(b)

Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2021.

5.

Enhancement of Saver’s Credit

(a)

Maximum contribution amount

Section 25B(a) of the Internal Revenue Code of 1986 is amended by striking $2,000 and inserting $2,500.

(b)

Modification of credit rate

(1)

50 percent credit rate

Section 25B(a) of the Internal Revenue Code of 1986 is amended by striking the applicable percentage and inserting 50 percent.

(2)

Adjusted gross income phaseouts

Section 25B(b) of such Code is amended to read as follows:

(b)

Limitation

For purposes of this section—

(1)

In general

The amount of credit allowable under subsection (a) (determined without regard to this subsection) shall be reduced (but not below zero) by an amount which bears the same ratio to the credit otherwise so allowable as—

(A)

the excess (if any) of—

(i)

adjusted gross income of the taxpayer, over

(ii)

the threshold amount, bears to

(B)

the phaseout amount.

(2)

Threshold amount

The term threshold amount means—

(A)

in the case of a joint return or a surviving spouse (as defined in section 2(a)), $45,000,

(B)

in the case of a head of household, 75 percent of the amount in effect for the taxable year under subparagraph (A), and

(C)

in the case of any other individual, 50 percent of the amount in effect for the taxable year under subparagraph (A).

(3)

Phaseout amount

The term phaseout amount means—

(A)

in the case of a joint return or a surviving spouse (as defined in 2(a)), $40,000,

(B)

in the case of a head of household (as defined in section 2(b)), 75 percent of the amount in effect for the taxable year under subparagraph (A), and

(C)

in the case of any other individual, 50 percent of the amount in effect for the taxable year under subparagraph (A).

(4)

Inflation adjustment

(A)

In general

In the case of any taxable year beginning in a calendar year after 2022, the $45,000 dollar amount in paragraph (2) and the $40,000 in paragraph (3) shall each be increased by an amount equal to—

(i)

such dollar amount, multiplied by

(ii)

the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2021 for calendar year 2016 in subparagraph (A)(ii) thereof.

(B)

Rounding

Any increase determined under subparagraph (A) that is not a multiple of $500 shall be rounded to the nearest multiple of $500.

.

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2021.

6.

Extension of limitation on deduction for state and local taxes

(a)

In general

Section 164(b)(6) of the Internal Revenue Code of 1986 is amended—

(1)

by striking January 1, 2026 and inserting January 1, 2029, and

(2)

by striking 2025 in the heading thereof and inserting 2028.

(b)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2022.