America is suffering from twin wage and tax crises, and today, the Patriotic Millionaires are excited to announce a bold, innovative solution we’ve worked on with our allies on the Hill!

Today, with support from our organization and a number of cosponsors, Representative Summer Lee (PA-12) has introduced the American Stability Act, a landmark bill which will enact the largest wage increase and tax cut for working people in US history. Cosponsors of the Act include Representatives Barbara Lee (CA-12), Jonathan Jackson (IL-01), Rashida Tlaib (MI-12), Jan Schakowsky (IL-09), Cori Bush (MO-01), and Betty McCollum (MN-04).

 For this week’s Closer Look, we want to lay out the problem with wages and taxes in America and explain why the American Stability Act is the solution to our ongoing economic crisis.

The Problem: Twin Wage and Tax Crises

Two weeks ago, John Driscoll, one of our members and a current Senior Advisor to Walgreens Boots Alliance, gave a full rundown on the state of wages in America. To refresh, low-wage workers have experienced some progress in real wage growth over the last few years, but it unfortunately hasn’t been enough to offset the high and rising cost of living, and millions of workers still struggle to get by.

The federal minimum wage has stood frozen at $7.25 an hour for fifteen years and is worth less today in real terms than at any time since 1949. While most state minimum wages are higher than the federal level, not a single one of them – not even in the “best” places like the District of Columbia or Washington – is sufficient enough to support a family. This is especially the case for subminimum wages for certain worker populations, like tipped or disabled workers.

According to the MIT Living Wage Calculator, North Carolina is the median state in terms of the average cost of living. A single adult with no children in North Carolina needs $44,844, which includes taxes, to afford basic essentials. So what does this mean? Roughly 40% of working Americans – that is, 67 million of them – make less than the median cost of living in America for a single adult with no children.

To make matters worse, even though millions of Americans don’t make enough to meet their cost of living, they are still expected to fork over a decent chunk of their earnings in taxes. In 2023, the standard deduction – the amount that non-itemizing taxpayers are allowed to subtract from their income before income tax kicks in – was $13,850 for single filers. That’s a great deal lower than what it actually takes for the median American to survive.

The rotten cherry on top of this twin wage and tax crisis is the situation of wealthy people like us. While most workers struggle to afford basic necessities like food, rent, and gas, CEOs at the 350 largest firms make on average 290 times as much as their typical employee. Over the years, our tax code has become increasingly less progressive, so much so that billionaires pay lower tax rates now than all other income groups. It’s disheartening, to say the least, when someone like Elon Musk is able to make $56 billion and pay $0 in federal income tax in the same year.

The Solution: The American Stability Act

Our tax and wage systems are in shambles, but the situation is not hopeless. The legislation includes both tax and wage reforms that essentially create a floor that workers cannot fall below. It does five key things:

• Establishes a Cost-of-Living Exemption for federal taxes equal to the median cost of living for a single adult with no children ($41,600/per year). The tax benefit is phased out between 100% and 200% of this exemption.
• Shifts the tax burden onto taxpayers making more than $1 million a year by implementing a 3% surtax on incomes over $1 million and an additional 5% surtax on incomes over $15 million.
• Replaces the federal minimum wage with a new “Stability Wage,” which is tied to the median cost of living in the US for a single adult with no children. (Today, with North Carolina being the state with the median cost of living, this wage would be $20 an hour.)
• Indexes the Stability Wage to either annual inflation or to the increase in the average wage for all workers (whichever is higher).
• Eliminates most exceptions to wage law which allow employers to pay some classes of workers less than others, e.g. disabled workers and tipped workers.

The American Stability Act will simultaneously give American workers the largest wage increase and tax cut in history. It will protect them against employment and wage disruptions brought on by globalization and technological change. It will reduce growing and extreme inequality.

In short, it will stabilize our economy to ensure workers can survive and begin to share in the fruits that their labor produces for their employers. That matters, because economic stability will protect our democracy from would-be authoritarians like Donald Trump, who capitalize on the economic frustrations of millions with false promises of change to seize power for their own personal gain.

Conclusion

The American Stability Act is the second of three pieces of legislation featured in the Patriotic Millionaires’ seminal Crack the Code: Proposed Internal Revenue Code of 2026. Last July, with our support, Representative Barbara Lee (CA-12) and a host of other Hill sponsors introduced the OLIGARCH Act, the first piece of legislation from Crack the Code which would enact a progressive annual wealth tax focused exclusively on constraining extreme inequality. Now, we’ve added the American Stability Act to our legislative repertoire to further untangle our rigged tax code and give workers the wages they deserve.

We millionaires are privileged to have a megaphone from which we can shout the urgent need to tax the rich and pay the people. But we’ve learned over the past fifteen years of this fight that we also have to roll up our sleeves and give Congress the policy solutions they need to get the job done. As we often say, the challenges our country faces are, contrary to popular belief, not that complicated. The good news is that the solutions aren’t that complicated, either. This introduction is just the beginning of the fight, and now our allies on the Hill have a powerful new tool to unrig the economy. The American Stability Act would provide an unparalleled level of stability to our country, and Americans deserve nothing less.