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H.R. 8085: Ultra-Millionaire Tax Act of 2026

This document outlines a proposed piece of legislation known as the Ultra-Millionaire Tax Act of 2026. Here’s a summary of its key components:

Wealth Tax Imposition

The bill introduces a tax on the net value of assets owned by individuals with a net worth of over $50 million. The tax would be imposed annually, calculated based on the value of taxable assets as of December 31 of each year.

Tax Brackets

The tax rate is tiered:

For net asset values up to $50 million, the tax rate is 0% (no tax).
For net asset values exceeding $50 million but below $1 billion, a tax of 2% would be applied.
For net asset values over $1 billion, a rate of 3% would apply, with a potential increase to 6% during years when specific healthcare legislation is enacted that provides comprehensive health coverage for all U.S. residents.

Definitions and Exclusions

The bill defines 'taxable assets' as all forms of property, both tangible and intangible, valued on the date of assessment, minus any debts owed on them. Exclusions apply to certain lower-value personal items valued at $50,000 or less and specific business-related assets.

Nongrantor Multibeneficiary Trusts

The act specifies how taxes would be assessed for multi-beneficiary trusts, regarding thresholds and tax calculation for trust assets held for multiple individuals.

Reporting Requirements

Taxpayers will be required to report their net asset values in a format established by the Secretary of the Treasury. This reporting may involve existing tax return requirements and could include estimates from businesses about the value of their assets.

Enforcement

The IRS is mandated to audit at least 30% of taxpayers subject to this new tax each year to ensure compliance. New penalties for underreporting asset values are also introduced, focusing on substantial misstatements.

Liquidity Provisions

Taxpayers facing liquidity issues due to this new tax may be allowed an extension of up to five years to pay their owed taxes if immediate payment would create undue hardship.

Funding and Implementation

The legislation calls for the appropriation of significant funds for necessary administrative and enforcement activities linked to the new tax, including $70 billion for enforcement, $10 billion for taxpayer services, and $20 billion for modernization of tax systems.

Timing and Reporting

The tax is set to take effect for calendar years starting after December 31, 2026. Regular reports will be required on tax enforcement and administration from the Treasury Secretary to Congress every two years starting in 2029.

Related Guidelines

Additional regulations may be established to prevent tax avoidance by relocating assets to foreign entities. A comprehensive enforcement plan will also be developed for the Foreign Account Tax Compliance Act (FATCA).