The Ultra-Millionaire Tax Act of 2026 establishes a new annual federal wealth tax on individuals with net assets exceeding $50 million while increasing IRS funding and enforcement capabilities.
Elizabeth Warren
Senator
MA
The Ultra-Millionaire Tax Act of 2026 establishes a new annual federal wealth tax on individuals and trusts with a net worth exceeding $50 million. The bill mandates strict reporting requirements, increases IRS enforcement and audit capacity, and authorizes $100 billion in funding for agency modernization and compliance. These measures aim to ensure accurate asset valuation and prevent tax avoidance by the nation's wealthiest taxpayers.
Ultra-Millionaire Tax Act of 2026 Proposes 2% Annual Levy on Net Worth Over $50 Million and $100 Billion IRS Tech Overhaul.
The Ultra-Millionaire Tax Act of 2026 introduces a first-of-its-kind annual federal wealth tax specifically targeting individuals with a net worth exceeding $50 million, starting in 2027. Unlike the income tax you pay on your paycheck, this tax hits the total value of everything a person owns—global real estate, stocks, and private businesses—minus their debts. The bill sets a 2% annual tax on net assets between $50 million and $1 billion, and a 3% tax on anything over the billion-dollar mark. Interestingly, that 3% rate jumps to 6% if the U.S. ever passes a comprehensive national health insurance program, effectively linking tax rates to future healthcare policy.
The $100 Billion Enforcement Engine
To make sure this isn't just a law on paper, the bill authorizes a massive $100 billion investment in the IRS over the next decade. About $70 billion of that is earmarked strictly for enforcement, while the rest goes toward modernization and taxpayer services. The bill actually mandates that the IRS audit at least 30% of taxpayers subject to this wealth tax every year. For comparison, the current audit rate for most regular earners is well below 1%. This funding is designed to build the technical muscle needed to track complicated global assets and ensure that the 'ultra-wealthy' aren't just shifting numbers between offshore accounts.
Valuing the Invaluable
One of the trickiest parts of this bill is how it handles things that don't have a clear price tag, like a private family company or a massive real estate portfolio. The Treasury Department is given 12 months to create new rules for valuing these 'non-publicly traded' assets. For a business owner whose wealth is tied up in a company worth $60 million, this could be a major headache. If they undervalue their assets by more than 35%, they face a 30% penalty on the underpayment. Because the tax is annual, someone with a lot of land but not much cash—like a high-value rancher or a real estate developer—might find themselves in a 'liquidity crunch,' though the bill does allow for up to a five-year payment extension in cases of extreme hardship.
Closing the Exit Doors
The bill includes strict 'attribution rules' to stop people from dodging the tax by gifting assets to their kids or moving them into complex trusts. If a taxpayer decides they’ve had enough and wants to renounce their U.S. citizenship to avoid the tax, they’ll hit a 'covered expatriate' wall: a one-time 40% exit tax on their entire net worth. By requiring banks and businesses to report more data on foreign holdings, the legislation aims to create a transparent map of global wealth that is much harder to hide than current income-based systems.