Congress targets ultra-wealthy with annual wealth tax, funds IRS enforcement surge

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 U.S. citizens, residents, and covered expatriates, with special rules for trusts and married couples. It includes $100 billion in IRS funding over 11 years to enforce the tax and requires annual audits of at least 30% of affected taxpayers.

Why we flagged it

The bill's core mechanism is a progressive annual tax on net assets above $50 million, with rates escalating at $1 billion. This is a direct wealth tax, not an income tax or estate tax modification. The character is straightforward and matches the stated purpose.

What the text implies

• Valuation rules for illiquid assets (private businesses, real estate, art) are delegated to Treasury with broad authority to use 'formulaic' and 'presumptive' methods, creating significant discretion and potential for disputes over asset values.
• The 5-year payment extension for taxpayers with 'severe liquidity constraints' or 'undue hardship' may allow wealthy individuals to defer payment indefinitely if they can demonstrate ongoing enterprise needs, reducing effective tax rate.
• Trust attribution rules are complex and may incentivize restructuring of family wealth into exempt trusts (charitable, grantor, single-beneficiary) to avoid tax, potentially reducing revenue.
• The bill conditions a higher 6% rate on passage of universal healthcare legislation, creating a contingent tax rate that depends on future legislative action—unusual and potentially unstable.
• Covered expatriates face a punitive 40% wealth tax on the day before expatriation, which may deter renunciation but also raises constitutional takings concerns.

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

Who it affects

The wealth tax directly reduces inequality and funds public services (via IRS enforcement and potential healthcare), benefiting most citizens. However, the bill's complexity—particularly valuation rules for illiquid assets, trust attribution, and the 5-year payment extension for those claiming hardship—creates administrative burden and potential avoidance pathways that may reduce actual revenue and shift compliance costs to affected taxpayers.

Who stands to gain

• Internal Revenue Service (enforcement and modernization funding)
• Federal government (revenue from wealth tax)
• Potential beneficiaries of healthcare expansion if universal healthcare legislation passes

Named in the bill

Internal Revenue Service (IRS), Secretary of the Treasury, Ultra-high-net-worth individuals (>$50M), Nongrantor multibeneficiary trusts, Charitable remainder trusts, Charitable lead trusts, Covered expatriates

Where it stands

10 cosponsors: 10 Democrats.

• Mar 26, 2026 — Introduced · Congress.gov: “Introduced in Senate”
• Mar 26, 2026 — Referred to Senate Committee on Finance · Congress.gov: “Read twice and referred to the Committee on Finance”

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

Money around this bill

2 lobbying clients named this bill on 2 disclosure filings across 1 quarter, Jun 2026 to Jun 2026. Those filings disclosed $509,577 in lobbying spend. A filing names 107 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 41% of bills with at least one filing.

Elizabeth Warren, the sponsor, reported $19,000 in PAC receipts in the 2026 cycle.

• American Federation of Teachers — $410,000 on 1 filing
• Public Citizen — $99,577 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.