Summary: On June 14th 2022, Senator Chuck Grassley (R-IA) introduced legislation (text, summary) that would make five changes to the tax code starting in tax year 2022:

Expand the 0 percent capital gains bracket. The proposal expands the taxable income range over which capital gains are taxed at 0 percent from $41,675 ($83,350 married) to $89,075 ($178,150).
Raise the Net Investment Income Tax (NIIT) threshold. The proposal raises the NIIT threshold for married filers from $250,000 to $400,000, keeping the threshold for single filers at $200,000. The threshold would be indexed to inflation going forward.
Create an exclusion for interest income. The proposal allows single filers to exclude up to $300 ($600 married) of interest income from gross income.
Expand the Saver’s Credit. The “Saver’s Credit” is a nonrefundable credit that matches up to 50 percent of retirement contributions of certain filers. Under the proposal, the maximum credit value is increased from $1,000 to $1,250 ($2,000 to $2,500 married) and the phaseout range is expanded such that the maximum qualifying AGI rises from $34,000 to $42,500 ($68,000 to $85,000) with a more gradual phaseout rate.
Extend the limitation on the deduction for state and local taxes (SALT). The proposal extends the sunset date for the $10,000 cap on SALT deductions from end-of-year 2025 to 2028.

Table 1 contains conventional revenue estimates. We estimate the proposal would raise a net $122 billion over the budget window (2023-2032). The tax cut provisions considered alone would cost $278 billion. Tables 2 and 3 display projected distributional effects in tax years 2023 and 2026, respectively.

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Table 1. Revenue Estimates, FY 2023-2032

Billions of Dollars, Change from Current-Law Baseline

Provision	2023	2024	2025	2026	2027	2028	2029	2030	2031	2032	Budget window
Create an exclusion for interest income	-3.4	-2.0	-2.0	-2.2	-2.3	-2.4	-2.4	-2.5	-2.5	-2.6	-24.3
Expand the 0 percent capital gains bracket	-25.5	-15.3	-15.8	-17.2	-18.1	-18.4	-18.7	-19.2	-20.0	-20.3	-188.5
Raise the NIIT threshold	-4.8	-3.4	-3.8	-4.0	-4.5	-4.9	-5.3	-5.7	-6.2	-6.6	-49.3
Expand the Saver’s Credit	-3.0	-1.6	-1.6	-1.6	-1.6	-1.5	-1.5	-1.4	-1.3	-1.3	-16.4
Extend the limitation on the deduction for SALT	0.0	0.0	0.0	97.5	131.6	139.1	32.5	0.0	0.0	0.0	400.7
Total	-36.7	-22.3	-23.2	72.5	105.1	112.0	4.6	-28.9	-30.1	-30.7	122.2

Table 2. Distributional Estimates, Tax Year 2023

Income group	Average tax change	Share with tax cut	Average tax cut	Share with tax increase	Average tax increase	Percent change in after-tax income	Share of tax change	Change in share of federal taxes paid
Bottom quintile	$0	0.4%	-$25	0.0%	$0	0.0%	0.0%	0.0%
Second quintile	-$20	13.0%	-$155	0.0%	$0	0.1%	3.2%	0.0%
Middle quintile	-$55	23.7%	-$230	0.0%	$0	0.1%	8.6%	0.0%
Fourth quintile	-$140	32.2%	-$435	0.0%	$0	0.2%	19.4%	0.0%
80-90%	-$420	49.5%	-$850	0.0%	$0	0.3%	24.4%	-0.1%
90-95%	-$690	63.4%	-$1,090	0.0%	$0	0.3%	19.3%	0.0%
95-99%	-$980	75.9%	-$1,290	0.0%	$0	0.3%	21.2%	0.0%
99-99.9%	-$660	87.9%	-$750	0.0%	$0	0.1%	3.2%	0.1%
Top 0.1%	-$935	96.7%	-$965	0.0%	$0	0.0%	0.5%	0.1%

Table 3. Distributional Estimates, Tax Year 2026

Income group	Average tax change	Share with tax cut	Average tax cut	Share with tax increase	Average tax increase	Percent change in after-tax income	Share of tax change	Change in share of federal taxes paid
Bottom quintile	$0	0.4%	-$25	0.0%	$150	0.0%	0.0%	0.0%
Second quintile	-$15	13.0%	-$145	0.4%	$465	0.1%	-0.7%	-0.1%
Middle quintile	-$30	22.8%	-$225	2.8%	$675	0.1%	-1.2%	-0.3%
Fourth quintile	$15	26.7%	-$480	16.7%	$850	0.0%	0.4%	-0.4%
80-90%	$480	25.3%	-$1,270	49.9%	$1,605	-0.3%	6.5%	-0.2%
90-95%	$1,085	25.7%	-$2,500	64.0%	$2,705	-0.5%	7.1%	-0.1%
95-99%	$2,125	27.7%	-$3,125	65.4%	$4,565	-0.6%	10.9%	-0.1%
99-99.9%	$33,385	15.4%	-$3,300	82.4%	$41,130	-3.3%	38.4%	0.6%
Top 0.1%	$283,120	13.1%	-$3,705	85.7%	$331,060	-3.3%	38.6%	0.6%

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