Sponsors (24)
Official title: Amend the Internal Revenue Code of 1986 to eliminate tax loopholes that allow billionaires to defer tax indefinitely through planning strategies such as "buy, borrow, die", to modify over 30 tax provisions so that billionaires are required to pay taxes annually, and for other purposes.
Introduced September 17, 2025 by Ronald Lee Wyden · Last progress September 17, 2025
The bill sharply broadens the tax base by imposing annual taxation on unrealized gains and limiting favored tax preferences—generating revenue and reducing wealthy tax avoidance—at the cost of substantial new compliance burdens, higher taxes (and potential liquidity pressures) for affected taxpayers, and added administrative and enforcement complexity.
High-income and high-net-worth taxpayers would be taxed annually on unrealized gains (mark-to-market) and lose the ability to indefinitely defer tax through estate step-ups or borrowing against appreciated assets, increasing tax collections and reducing wealthy tax avoidance.
Applicable taxpayers would face higher immediate taxation and fewer tax-preference opportunities (limitations on deferred compensation tax treatment, certain gain deferrals, and favored elections like §1031, §351, Opportunity Zones, and QSBS), broadening the tax base and reducing sheltering strategies.
Increased information reporting (new §§6050BB, 6050CC and amendments to §6048) would improve IRS visibility into large deferred compensation, life insurance and annuity transactions, aiding enforcement and detection of tax avoidance.
High-net-worth taxpayers, payors (employers, insurers, financial institutions), and tax preparers will face substantial new compliance, reporting, valuation and recordkeeping burdens, raising tax-preparation and administrative costs.
Taxpayers who historically used borrowing against appreciated assets for liquidity could face larger cash-tax liabilities and reduced access to tax-advantaged liquidity, creating short-term liquidity pressures for some households and entities.
Higher taxation of deferred compensation, life insurance/annuity payments, certain investment gains, and stricter expatriation rules will raise tax bills for affected individuals and could deter cross-border mobility or complicate estate and immigration planning.
Based on analysis of 6 sections of legislative text.
Requires annual mark‑to‑market taxation and closes borrowing, estate, and exchange loopholes for defined high‑wealth taxpayers; changes NIIT and expatriation rules; effective after 2025.
Imposes annual mark‑to‑market taxation on gains held by very high‑income and high‑net‑worth taxpayers, restricts tax‑free access to wealth via borrowing, and closes estate‑and‑exchange loopholes that let appreciated assets transfer to heirs or entities tax‑free. It also modifies loss carryback rules for marked‑to‑market losses, expands application of the net investment income tax to affected taxpayers, tightens expatriation rules for covered persons, and denies certain nonrecognition rules (like‑kind exchanges and some transfers) when targeted notices apply. The bill changes several parts of the Internal Revenue Code to treat gains on appreciated assets as current taxable income for “applicable taxpayers,” creates a special three‑year carryback for net marked‑to‑market losses, amends the NIIT and expatriation tax rules to prevent avoidance, and disallows some §1031 and §351 nonrecognition relief for entities subject to the new regime. Most operative provisions take effect for taxable years beginning after December 31, 2025.