Congress proposes 10% surtax on millionaires, details on spending unclear
S. 4306 — Millionaires Surtax Act · Filed by Chris Van Hollen (D-MD) · 3 cosponsors · Introduced Apr 15, 2026 · Referred to committee
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What it does
This bill imposes a new 10% surtax on individual income exceeding $2 million per year ($1 million for single filers), effective for tax years beginning after December 31, 2026. The surtax applies to high-income individuals only—not corporations—and includes narrow exceptions for charitable trusts, nonresident aliens, and citizens living abroad. The revenue raised would flow to the federal government.
Why we flagged it
The bill's sole operative mechanism is a new federal surtax on high-income individuals. It is a straightforward tax-policy proposal with no riders, carve-outs, or hidden provisions—the title accurately describes the function.
What the text implies
- The surtax does not apply to corporations, potentially creating incentive for high-income individuals to restructure income through corporate entities or pass-through entities (depending on existing tax law interaction).
- The exclusion of investment-interest deductions from the surtax base (via 'modified adjusted gross income') may reduce the effective rate on investment income relative to wage income.
The full analysis lists 3 implications of this text.
Who stands to gain
U.S. federal government (revenue recipient)