H.R. 6438: Redistribution of Billions by Instituting New High-Income Obligations on Overlooked Debt Act

This bill, referred to as the "Redistribution of Billions by Instituting New High-Income Obligations on Overlooked Debt Act" or the "ROBINHOOD Act," proposes changes to the Internal Revenue Code concerning high-income individuals and their financial obligations.

Key Provisions

• Imposition of a New Tax: The bill introduces a 20% excise tax on specific types of secured loans and lines of credit that high-income individuals take out.
• Definition of High-Income Individuals: The tax specifically applies to individuals whose adjusted gross income is greater than $400,000, or $450,000 for joint returns.
• Types of Loans Affected: The tax is applied to secured loans or lines of credit that are backed by capital assets. However, it does not include residential mortgages, home equity loans, margin loans, or loans secured by farmland.
• Tax Payment Responsibility: The borrower of the specified loan or line of credit is responsible for paying this tax, which will be collected annually by the Secretary of the Treasury.
• Regulatory Authority: The Secretary of the Treasury is given the power to create necessary regulations to implement the provisions of the bill.
• Effective Date: The new tax provisions will apply to loans and lines of credit that are extended after the bill is enacted.

Purpose of the Bill

The bill aims to ensure that high-income individuals contribute a fairer share of taxes derived from their use of financial products, creating a new revenue stream that could potentially be used for various public benefits. By imposing this tax, lawmakers intend to address what they perceive as an imbalance in tax contributions from wealthy borrowers in comparison to other taxpayers.

Legislative Progress

As of now, the bill has been introduced in the House of Representatives and referred to the Committee on Ways and Means for further discussion and consideration.

Relevant Companies

None found.