Minimum Tax on Billionaires

119th CONGRESS 1st Session H.R. ___ To establish a minimum tax on the net wealth of ultra-high-net-worth individuals to ensure tax fairness and adequate contribution to Federal revenues. _______________________________ IN THE HOUSE OF REPRESENTATIVES Mr./Ms. _____________ introduced the following bill; which was referred to the Committee on Ways and Means _______________________________ A BILL To establish a minimum tax on the net wealth of ultra-high-net-worth individuals to ensure tax fairness and adequate contribution to Federal revenues. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the "Billionaire Minimum Tax Act of 2025". SECTION 2. FINDINGS. Congress finds the following: (1) Despite the progressive income tax system established in the United States, ultra-high-net-worth individuals often pay a significantly lower effective tax rate as a percentage of their total wealth than middle-class taxpayers. (2) According to research by economist Gabriel Zucman, billionaires pay approximately 0.2 percent of their wealth in taxes annually due to tax avoidance strategies including deferral of capital gains realization, control over corporate dividend distributions, and use of holding company structures. (3) The ability of ultra-wealthy individuals to borrow against appreciated assets allows them to access the economic value of their wealth without triggering taxable events, resulting in effective tax rates far below those paid by wage earners. (4) A minimum tax on wealth would encourage the realization of capital gains and restore fairness to the tax system by ensuring that ultra-high-net-worth individuals contribute at least a minimum amount relative to their economic resources. (5) Such a minimum tax would generate substantial Federal revenue while affecting only a small number of taxpayers with extraordinary wealth. SECTION 3. DEFINITIONS. In this Act: (1) APPLICABLE TAXPAYER.--The term "applicable taxpayer" means any individual who is-- (A) a citizen or resident of the United States (as defined in section 7701(a)(30) of the Internal Revenue Code of 1986), and (B) a specified high-net-worth individual. (2) SPECIFIED HIGH-NET-WORTH INDIVIDUAL.--The term "specified high-net-worth individual" means any individual whose net wealth exceeds $100,000,000 as of the last day of the taxable year. (3) NET WEALTH.--The term "net wealth" means the fair market value of all assets of the taxpayer, wherever located, reduced by the amount of all liabilities of the taxpayer, determined as of the last day of the taxable year. Such term includes-- (A) all real property, (B) all tangible personal property, (C) all financial assets, including stocks, bonds, and other securities, (D) all interests in partnerships, trusts, and other entities, (E) all beneficial interests in trusts, (F) all retirement accounts and deferred compensation arrangements, (G) all intellectual property and other intangible assets, (H) all cash and cash equivalents, (I) all interests in life insurance policies (at cash surrender value), (J) all foreign financial assets (as defined in section 6038D of the Internal Revenue Code of 1986), and (K) any other asset with economic value. (4) FAIR MARKET VALUE.--The term "fair market value" means-- (A) in the case of any asset that is publicly traded on an established securities market, the closing price on the last trading day of the taxable year, (B) in the case of any asset that is not publicly traded, the highest valuation of such asset-- (i) declared by the taxpayer on any financial statement, loan application, insurance application, or other document provided to any financial institution, insurance company, or other third party during the taxable year or the 3 preceding taxable years, or (ii) determined by a qualified independent appraisal obtained during the taxable year or the 3 preceding taxable years, and (C) in the case of any asset for which no valuation described in subparagraph (A) or (B) is available, a reasonable estimate determined in accordance with regulations prescribed by the Secretary. (5) SECRETARY.--The term "Secretary" means the Secretary of the Treasury or the Secretary's delegate. SECTION 4. IMPOSITION OF MINIMUM TAX ON NET WEALTH. (a) In General.--Chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subchapter: "Subchapter W--Minimum Tax on Net Wealth "Sec. 1501. Imposition of minimum tax on net wealth. "Sec. 1502. Determination of minimum tax liability. "Sec. 1503. Credit for taxes paid. "Sec. 1504. Reporting requirements. "Sec. 1505. Regulations. "SEC. 1501. IMPOSITION OF MINIMUM TAX ON NET WEALTH. "(a) In General.--In addition to any other tax imposed by this subtitle, there is hereby imposed on each applicable taxpayer for each taxable year a minimum tax equal to the excess (if any) of-- "(1) the tentative minimum tax determined under section 1502, over "(2) the sum of-- "(A) the regular tax liability (as defined in section 26(b)) for the taxable year, and "(B) the tax imposed by section 55 for the taxable year. "(b) Applicable Taxpayer.--For purposes of this subchapter, the term 'applicable taxpayer' has the meaning given such term in section 3 of the Billionaire Minimum Tax Act of 2025. "SEC. 1502. DETERMINATION OF MINIMUM TAX LIABILITY. "(a) Tentative Minimum Tax.--For purposes of section 1501, the tentative minimum tax for any taxable year is the sum of-- "(1) 1 percent of so much of the net wealth of the taxpayer as exceeds $100,000,000 but does not exceed $1,000,000,000, plus "(2) 2 percent of so much of the net wealth of the taxpayer as exceeds $1,000,000,000. "(b) Net Wealth.--For purposes of this subchapter, the term 'net wealth' has the meaning given such term in section 3 of the Billionaire Minimum Tax Act of 2025. "(c) Inflation Adjustment.-- "(1) IN GENERAL.--In the case of any taxable year beginning after December 31, 2026, each dollar amount in subsection (a) shall be increased by an amount equal to-- "(A) such dollar amount, multiplied by "(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting 'calendar year 2025' for 'calendar year 2016' in subparagraph (A)(ii) thereof. "(2) ROUNDING.--If any amount as adjusted under paragraph (1) is not a multiple of $1,000,000, such amount shall be rounded to the nearest multiple of $1,000,000. "SEC. 1503. CREDIT FOR TAXES PAID. "(a) In General.--For purposes of determining the minimum tax under section 1501, the following taxes paid by the taxpayer for the taxable year shall be treated as part of the regular tax liability: "(1) Any tax imposed by chapter 1 of this title (including the tax on net investment income under section 1411). "(2) Any tax imposed by chapter 11 (estate tax) or chapter 12 (gift tax) of this title paid during the taxable year. "(3) Any State or local income tax or wealth tax paid during the taxable year. "(4) Any foreign income tax for which a credit is allowed under section 901. "(b) Carryforward of Excess Credits.--If the sum of the taxes described in subsection (a) exceeds the tentative minimum tax for any taxable year, such excess may be carried forward to the succeeding 5 taxable years and applied against the minimum tax liability for such years. "SEC. 1504. REPORTING REQUIREMENTS. "(a) Annual Wealth Report.--Each applicable taxpayer shall attach to the return of tax required under section 6012 for each taxable year a statement containing-- "(1) a complete listing of all assets included in the determination of net wealth, "(2) the fair market value of each such asset as of the last day of the taxable year, "(3) the methodology used to determine the fair market value of each asset that is not publicly traded, "(4) copies of any appraisals, financial statements, or other documents used to determine the fair market value of any asset, "(5) a listing of all liabilities of the taxpayer, and "(6) such other information as the Secretary may require by regulation. "(b) Coordination With Foreign Asset Reporting.--The reporting requirements under this section shall be in addition to, and not in lieu of, any reporting requirements under section 6038D (relating to information with respect to foreign financial assets). "(c) Penalty for Failure To Report.-- "(1) IN GENERAL.--If any applicable taxpayer fails to furnish the information required under subsection (a) at the time and in the manner required, such taxpayer shall pay a penalty equal to the greater of-- "(A) $100,000, or "(B) 5 percent of the minimum tax that would be due if the taxpayer's net wealth were correctly reported. "(2) REASONABLE CAUSE EXCEPTION.--No penalty shall be imposed under paragraph (1) with respect to any failure if it is shown that such failure is due to reasonable cause and not to willful neglect. "SEC. 1505. REGULATIONS. "The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subchapter, including regulations-- "(1) providing rules for the valuation of assets that are not publicly traded, "(2) providing rules for the treatment of assets held through trusts, partnerships, corporations, and other entities, "(3) providing rules to prevent the avoidance of the tax imposed by this subchapter through the use of related parties, nominees, or other arrangements, "(4) providing rules for the treatment of married individuals filing separate returns, "(5) providing rules for the treatment of nonresident aliens who become residents during the taxable year, "(6) coordinating the requirements of this subchapter with the requirements of section 6038D, and "(7) providing such other rules as may be necessary to carry out the purposes of this subchapter." (b) Clerical Amendment.--The table of subchapters for chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: "Subchapter W. Minimum tax on net wealth." SECTION 5. VALUATION MISSTATEMENT PENALTIES. (a) In General.--Section 6662 of the Internal Revenue Code of 1986 is amended-- (1) in subsection (b), by adding at the end the following new paragraph: "(11) Any substantial net wealth valuation understatement.", and (2) by adding at the end the following new subsection: "(n) Substantial Net Wealth Valuation Understatement.-- "(1) IN GENERAL.--For purposes of this section, there is a substantial net wealth valuation understatement if the net wealth reported on any return is 65 percent or less of the amount determined to be the correct net wealth. "(2) GROSS VALUATION MISSTATEMENT.--For purposes of subsection (h), there is a gross net wealth valuation misstatement if the net wealth reported on any return is 40 percent or less of the amount determined to be the correct net wealth. "(3) NET WEALTH.--For purposes of this subsection, the term 'net wealth' has the meaning given such term in section 3 of the Billionaire Minimum Tax Act of 2025. "(4) LIMITATION.--No penalty shall be imposed by reason of subsection (b)(11) unless the portion of the underpayment for the taxable year attributable to substantial net wealth valuation understatements exceeds $500,000." (b) Conforming Amendment.--Section 6662(h)(2) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph: "(E) any gross net wealth valuation misstatement as determined under subsection (n)(2)." SECTION 6. ANTI-AVOIDANCE RULES. (a) Attribution Rules.--For purposes of determining net wealth under this Act-- (1) TRUSTS.--Any asset held by a trust of which the taxpayer is treated as the owner under subpart E of part I of subchapter J of chapter 1 of the Internal Revenue Code of 1986 (relating to grantor trusts) shall be treated as an asset of the taxpayer. (2) CONTROLLED ENTITIES.--Any asset held by a corporation, partnership, or other entity in which the taxpayer holds (directly or indirectly) more than 50 percent of the voting power or value shall be treated as an asset of the taxpayer to the extent of the taxpayer's proportionate interest in such entity. (3) RELATED PARTY TRANSFERS.--If a taxpayer transfers any asset to a related person (as defined in section 267(b) of the Internal Revenue Code of 1986) for less than fair market value, such asset shall continue to be treated as an asset of the taxpayer for purposes of determining net wealth for the 5-year period beginning on the date of such transfer. (b) Expatriation Tax.-- (1) IN GENERAL.--Any individual who relinquishes United States citizenship or ceases to be a lawful permanent resident of the United States (within the meaning of section 877A of the Internal Revenue Code of 1986) and who was an applicable taxpayer for any of the 5 taxable years preceding such relinquishment or cessation shall be subject to a tax equal to 10 percent of the individual's net wealth as of the date of such relinquishment or cessation. (2) COORDINATION WITH SECTION 877A.--The tax imposed by paragraph (1) shall be in addition to any tax imposed under section 877A of the Internal Revenue Code of 1986. SECTION 7. AUTHORIZATION OF APPROPRIATIONS. (a) In General.--There are authorized to be appropriated to the Internal Revenue Service such sums as may be necessary to carry out this Act, including-- (1) hiring additional personnel to administer and enforce the provisions of this Act, (2) developing systems and procedures for the valuation of assets and verification of reported net wealth, and (3) coordinating with State tax authorities and foreign governments to obtain information necessary to enforce this Act. (b) Dedicated Enforcement.--Of the amounts appropriated under subsection (a), not less than $500,000,000 shall be used for enforcement activities related to the minimum tax imposed by this Act. SECTION 8. EFFECTIVE DATE. (a) In General.--Except as otherwise provided in this section, the amendments made by this Act shall apply to taxable years beginning after December 31, 2025. (b) Regulations.--Not later than 180 days after the date of the enactment of this Act, the Secretary of the Treasury shall issue proposed regulations to carry out this Act. (c) Reporting.--The reporting requirements under section 1504 of the Internal Revenue Code of 1986 (as added by this Act) shall apply to taxable years beginning after December 31, 2025. ``` ---