Sponsors (4)
The bill raises revenue and curbs deferred/avoidance strategies—protecting many middle‑income taxpayers and family farms—while increasing taxes on wealthier investors and imposing substantial new reporting, compliance, and planning burdens on estates, heirs, and many businesses.
Most taxpayers and the federal government: the bill raises near‑term federal revenue and reduces avenues for deferring or avoiding capital‑gains tax (limits preferential rates for >$1M, taxes gains on transfers, and caps some like‑kind deferrals).
Middle‑income taxpayers, family farms, and many small businesses: preserves lower long‑term capital‑gain/qualified‑dividend rates for taxpayers with taxable income at or below $1,000,000 and protects farm exchanges and family‑business exclusions to help continuity.
Taxpayers and the IRS: the bill creates clearer valuation, reporting, withholding, and standardized forms/rules for transfers and gifts, which should improve compliance and reduce some tax avoidance over time.
High‑income taxpayers, investors, and businesses that rely on outside capital: higher taxes on long‑term capital gains and reduced deferral options will raise tax bills and could weaken incentives for investment or increase cost of capital.
Heirs, donors, and family businesses: taxing unrealized gains on gifts or at death (with limited exclusions) and potential recapture if heirs cease qualifying use creates liquidity stress, planning disruption, and risk to family enterprises.
Executors, fiduciaries, taxpayers, preparers, and the IRS: expanded reporting, valuation, withholding, and tracking (annual/lifetime caps) will increase compliance costs, administrative burden, and preparer fees.
Based on analysis of 16 sections of legislative text.
Limits preferential capital gains/dividend rates to taxpayers with taxable income ≤ $1,000,000, deems many gifts/deaths as gain realizations, adds exclusions, reporting, installment payment, and caps like‑kind exchanges.
Official title: Amend the Internal Revenue Code of 1986 to equalize treatment of capital gains and earned income.
Introduced March 17, 2026 by Edward John Markey · Last progress March 17, 2026
Limits preferential tax treatment for capital gains and qualified dividends to taxpayers with taxable income of $1,000,000 or less, treats many lifetime gifts and transfers at death as taxable “realizations” of unrealized gain, and creates reporting, exclusion, installment payment, and recapture rules for those transfers. It also caps like‑kind exchange deferral, narrows a key pass‑through deduction calculation, and adds reporting and administrative provisions to enforce the changes. Most provisions take effect for taxable years beginning after December 31, 2026.