Congress targets ultra-wealthy with new annual wealth tax, funds IRS enforcement
S. 4246 — Ultra-Millionaire Tax Act of 2026 · Filed by Elizabeth Warren (D-MA) · 10 cosponsors · Introduced Mar 26, 2026 · Referred to committee
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What it does
This bill creates a new federal wealth tax on ultra-wealthy individuals, imposing a 2% annual tax on net assets above $50 million and 3% (or 6% if universal healthcare legislation passes) on assets above $1 billion. The tax applies to the total value of all property—real, personal, tangible, intangible—minus debts, with special rules for trusts and expatriates. It also funds IRS enforcement with $100 billion over 11 years and strengthens reporting requirements for foreign assets.
Why we flagged it
The bill's primary function is to establish a new annual wealth tax on ultra-millionaires and billionaires, paired with substantial IRS funding to enforce it. This is redistributive fiscal policy, not a narrow carve-out or subsidy.
What the text implies
- Valuation disputes over illiquid assets (private businesses, real estate, art) will likely trigger protracted IRS audits and litigation, creating compliance costs that may disproportionately burden smaller family enterprises relative to diversified portfolios.
- The 5-year payment extension for taxpayers with 'severe liquidity constraints' creates a de facto deferral mechanism that may allow wealthy individuals to delay tax payment indefinitely if they can demonstrate ongoing enterprise hardship.
The full analysis lists 5 implications of this text.
Who stands to gain
U.S. federal government (revenue collection); Internal Revenue Service (enforcement budget); Tax advisory and accounting firms (compliance consulting)