The Billionaires Income Tax Act introduces a new annual tax on wealthy individuals with either $100 million in annual income or $1 billion in assets, requiring them to pay taxes on investment gains each year rather than deferring taxes indefinitely through strategies like "buy, borrow, die." The bill closes more than 30 tax loopholes used by billionaires and high-net-worth individuals, including eliminated stepped-up basis at death, like-kind exchanges, and special treatment for private investments, while requiring detailed reporting from pass-through entities and insurance companies about their holdings and transactions. Affected taxpayers can spread payments over five years and benefit from certain valuation flexibility for private business interests, though the tax includes provisions that accelerate payment if assets are sold or payments are missed, along with new restrictions on deferred compensation and certain life insurance products for billionaires. The legislation takes effect on various dates beginning in September 2025, with most provisions applying to tax years beginning after December 31, 2025. This bill significantly reshapes how ultra-wealthy individuals are taxed by taxing unrealized gains on assets rather than only when gains are realized through sales.
Take Action
Your position
Add a comment
to comment on this bill.
Annotate the text
Highlight any passage on the Summary or Full Text tab to attach a note. Annotations appear on the Annotations tab.