Congress targets billionaires with annual tax on unrealized investment gains

What it does

This bill creates a new annual tax on billionaires and ultra-wealthy individuals, requiring those with over $100 million in income or $1 billion in assets to pay tax on the unrealized gains in their investment holdings each year, even if they haven't sold those assets. The tax applies to tradable assets (stocks, bonds) annually and nontradable assets (private businesses, real estate) when transferred or sold. Wealthy individuals entering this tax bracket can spread the initial tax bill over five years.

Why we flagged it

The bill's core mechanism is an annual tax on unrealized gains for ultra-high-net-worth individuals and entities, fundamentally restructuring how capital gains are taxed for the wealthiest Americans.

What the text implies

• Valuation disputes will likely become a major source of IRS litigation, as billionaires challenge annual fair-market-value determinations on illiquid assets like private businesses and real estate.
• The five-year installment option for first-year tax liability may incentivize wealthy individuals to accelerate asset sales or restructure holdings before the law takes effect to avoid the tax.
• Pass-through entity reporting requirements create a new compliance burden on partnerships and S-corps, potentially increasing administrative costs for mid-market private businesses.
• The bill's treatment of grantor trusts and certain estate-planning vehicles may trigger significant restructuring of wealth-transfer strategies among the ultra-wealthy.
• International coordination gaps: nonresident aliens and expatriates face different thresholds, potentially creating incentives for wealthy individuals to change tax residency or citizenship status.

Who it affects

Ordinary citizens benefit from a tax that targets only the ultra-wealthy (those with $100M+ income or $1B+ in assets), raising revenue for public services without affecting middle-class households. The tax addresses a long-standing fairness concern: billionaires paying lower effective tax rates than working people by deferring gains indefinitely.

Who stands to gain

• U.S. federal government (revenue collection)
• Tax compliance and accounting firms (increased audit and valuation work)
• IRS (expanded enforcement resources)

Named in the bill

Internal Revenue Service (IRS), Secretary of the Treasury, Billionaires and ultra-high-net-worth individuals, Pass-through entities (partnerships, S-corporations), Applicable trusts and grantor trusts, Qualified opportunity funds, Charitable remainder trusts

Where it stands

33 cosponsors: 33 Democrats.

• Sep 17, 2025 — Introduced · Congress.gov: “Introduced in House”
• Sep 17, 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.

Money around this bill

7 lobbying clients named this bill on 8 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $2,474,577 in lobbying spend. A filing names 36 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 86% of bills with at least one filing.

Steve Cohen, the sponsor, reported $315,000 in PAC receipts in the 2026 cycle.

• Finseca — $1,080,000 on 2 filings
• American Federation of State County and Municipal Employees — $690,000 on 1 filing
• American Federation of Teachers — $410,000 on 1 filing
• Public Citizen — $99,577 on 1 filing
• National Women's Law Center Action Fund — $75,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.