Congress targets extreme wealth with new annual tax on billionaires.

What it does

This bill creates a new annual wealth tax on individuals and trusts with net assets above a threshold (roughly $50 million to $1 billion, adjusted annually for median household wealth). The tax is progressive: 2% on assets between the threshold and 10× the threshold, 4% on assets up to 100× the threshold, 6% up to 1,000× the threshold, and 8% above that. Trusts pay a flat 8%. The bill exempts retirement accounts and certain small personal property, requires the IRS to audit at least 30% of wealth-tax filers annually, and imposes steep penalties (30–50%) for undervaluing assets. Wealthy individuals and large trusts bear the cost; the revenue goes to the federal government.

Why we flagged it

The bill's core mechanism is a tiered annual tax on net wealth above a high threshold, with rates escalating by asset size. It is straightforward wealth redistribution policy, not a carve-out, subsidy, or procedural maneuver.

What the text implies

• Valuation of illiquid assets (private businesses, real estate, art) will be contentious; the bill grants the IRS broad formulaic valuation authority, which may lead to disputes and litigation.
• The 5-year payment extension for taxpayers with 'severe liquidity constraints' or 'undue hardship' creates a discretionary loophole that could reduce effective collection from wealthy individuals with illiquid portfolios.
• Annual 30% audit mandate on wealth-tax filers will require massive IRS resource expansion; if not funded, enforcement will collapse and the tax becomes symbolic.
• Married couples are treated as a single taxpayer, potentially doubling the effective threshold for married wealthy individuals compared to singles.
• Gifts to family members under age 18 are attributed back to the donor for wealth-tax purposes, creating a novel anti-avoidance rule that may conflict with existing gift-tax law.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

The bill directly benefits ordinary citizens by raising federal revenue from the wealthy without affecting middle-class or lower-income households (threshold is ~$50M+). However, the bill's practical effect depends on implementation: valuation disputes, enforcement capacity, and whether revenue is actually deployed for public benefit. The aggressive audit mandate and penalty structure suggest serious enforcement intent, but wealth-tax history shows collection challenges.

Who stands to gain

• U.S. federal government (revenue recipient)

Named in the bill

Internal Revenue Service (IRS), U.S. Department of the Treasury, Individuals with net wealth above ~$50 million, Trusts (grantor and beneficiary trusts)

Where it stands

12 cosponsors: 12 Democrats.

• Apr 14, 2025 — Introduced · Congress.gov: “Introduced in House”
• Apr 14, 2025 — Referred to House Committee on Ways and Means · Congress.gov: “Referred to the House Committee on Ways and Means”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.