Congress targets billionaire wealth with annual tax on unrealized gains
S. 2845 — Billionaires Income Tax Act · Filed by Ron Wyden (D-OR) · 22 cosponsors · Introduced Sep 17, 2025 · Referred to committee
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What it does
This bill creates a new annual tax on ultra-wealthy individuals and certain trusts, targeting those with over $100 million in annual income or $1 billion in assets. It treats unrealized gains on most assets (stocks, real estate, business interests) as if they were sold each year, requiring billionaires to pay tax on the appreciation even if they haven't sold the asset. The tax applies to pass-through entities and includes complex reporting rules for partnerships and S-corporations to track gains.
Why we flagged it
The bill's core mechanism is an annual mark-to-market tax on unrealized gains for ultra-high-net-worth individuals and trusts. It is functionally a wealth tax disguised as an income tax, targeting the top 0.01% of earners and asset holders.
What the text implies
- Valuation disputes will likely dominate IRS enforcement; the bill allows taxpayers to self-value nontradable assets using multiple methods (cost basis, adjusted basis, financial statements, loan collateral value), creating significant audit risk and litigation.
- Pass-through entities (partnerships, S-corps) face new administrative burdens: tracking gains on nontradable assets, reporting to applicable taxpayers, and adjusting basis in tiered structures. Small business owners may face unexpected tax bills if they become 'significant owners' (5% stake or $50M+ in nontradable interests).
The full analysis lists 5 implications of this text.
Who stands to gain
U.S. Treasury / federal government; Tax compliance and accounting firms; Valuation and appraisal services