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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 raises revenue and reduces tax‑avoidance opportunities by taxing unrealized appreciation, limiting favored elections, and expanding reporting—improving fairness and enforcement—but does so at the cost of sizable compliance burdens, higher taxes for affected investors and payors, potential liquidity strains for some taxpayers, and risks of legal and economic side effects.
High‑net‑worth taxpayers (and their heirs) would face annual taxation on unrealized appreciation and reduced ability to indefinitely defer or shift gains, closing the estate step‑up loophole and raising revenue and tax fairness.
The bill reduces use of favored tax preferences and treats more deferred compensation and certain gains as currently taxable, broadening the tax base and reducing opportunities for tax avoidance.
New and expanded information‑reporting requirements improve IRS visibility into large payments (deferred compensation, life insurance/annuity payouts, certain transfers), aiding enforcement and likely increasing collections.
High‑net‑worth taxpayers, their advisers, and payors will face substantial new compliance complexity and reporting burdens to calculate annual mark‑to‑market gains and to comply with ordering/election rules, raising tax‑preparation costs.
Affected taxpayers (especially wealthy individuals and some small‑business investors) will pay higher taxes on investments, deferred compensation, life insurance/annuity payments, QSBS benefits and certain expatriation events, which could reduce after‑tax returns and investment incentives.
Taxpayers who previously relied on borrowing against appreciated assets for liquidity could lose that tax‑advantaged strategy and face larger cash tax bills, creating short‑term liquidity strains.
Based on analysis of 6 sections of legislative text.
Imposes annual mark-to-market tax on unrealized gains for very wealthy taxpayers, tightens NIIT and expatriation rules, adds a special carryback for marked-to-market losses, and denies some nonrecognition exchanges.
Imposes annual mark-to-market taxation on appreciated assets held by very wealthy individuals and entities, restricts using borrowing against appreciated assets to avoid tax, and closes estate and transfer loopholes that currently let heirs avoid tax on unrealized gains. It also amends several Code provisions: creates a special carryback rule for marked-to-market losses, broadens net investment income tax application for covered taxpayers, tightens expatriation rules, and denies certain nonrecognition exchanges (like-kind exchanges and some §351 transfers) when the taxpayer is an "applicable" taxpayer or entity. Most operative changes apply to taxable years beginning after December 31, 2025.