[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7749 Introduced in House (IH)]
<DOC>
118th CONGRESS
2d Session
H. R. 7749
To amend the Internal Revenue Code of 1986 to impose a tax on the net
value of assets of a taxpayer, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 20, 2024
Ms. Jayapal (for herself, Mr. Boyle of Pennsylvania, Mr. Beyer, Mr.
Bowman, Ms. Bush, Ms. Chu, Mr. Davis of Illinois, Mr. Evans, Mr. Garcia
of Illinois, Mr. Goldman of New York, Mr. Grijalva, Mr. Ivey, Mr.
Jackson of Illinois, Mr. Johnson of Georgia, Ms. Lee of California, Ms.
Lee of Pennsylvania, Mr. McGovern, Mr. Nadler, Ms. Norton, Ms. Ocasio-
Cortez, Ms. Omar, Ms. Porter, Ms. Pressley, Mrs. Ramirez, Ms.
Schakowsky, Mr. Schiff, Mr. Smith of Washington, Mr. Takano, Ms. Tlaib,
Ms. Tokuda, Mr. Trone, Ms. Waters, Mrs. Watson Coleman, and Ms. Wild)
introduced the following bill; which was referred to the Committee on
Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to impose a tax on the net
value of assets of a taxpayer, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Ultra-Millionaire Tax Act of 2024''.
SEC. 2. IMPOSITION OF WEALTH TAX.
(a) In General.--The Internal Revenue Code of 1986 is amended by
inserting after subtitle B the following new subtitle:
``Subtitle B-1--Wealth Tax
``Chapter 18--Determination of Wealth Tax
``CHAPTER 18--DETERMINATION OF WEALTH TAX
``Sec. 2901. Imposition of tax.
``Sec. 2902. Net value of taxable assets.
``Sec. 2903. Special rules.
``Sec. 2904. Information reporting.
``Sec. 2905. Enforcement.
``SEC. 2901. IMPOSITION OF TAX.
``(a) In General.--In the case of an individual, a tax is hereby
imposed on the net value of all taxable assets of the taxpayer on the
last day of any calendar year.
``(b) Computation of Tax.--
``(1) In general.--The tax imposed by this section shall be
equal to the sum of--
``(A) 0 percent of so much of the net value of all
taxable assets of the taxpayer as does not exceed the
zero bracket threshold,
``(B) 2 percent of so much of the net value of all
taxable assets of the taxpayer in excess of the zero
bracket threshold but not in excess of the top bracket
threshold, plus
``(C) the applicable percentage of so much of the
net value of all such taxable assets of the taxpayer in
excess of the top bracket threshold.
``(2) Zero bracket threshold; top bracket threshold.--For
purposes of this section--
``(A) Zero bracket threshold.--The zero bracket
threshold is $50,000,000.
``(B) Top bracket threshold.--The top bracket
threshold is $1,000,000,000.
``(c) Applicable Percentage.--
``(1) In general.--For purposes of this section, the
applicable percentage is--
``(A) except as provided in subparagraph (B), 3
percent, and
``(B) in the case of any calendar year in which
there is in effect legislation which meets the
requirements of paragraph (2), 6 percent.
``(2) Legislation described.--Legislation meets the
requirements of this paragraph if such legislation--
``(A) establishes a health insurance program that
provides to all residents of the United States
comprehensive protection against the costs of health
care and health-related services, and
``(B) prohibits private entities from providing
duplicate benefits.
``(d) Treatment of Married Individuals.--For purposes of this
section, individuals who are married (as defined in section 7703) shall
be treated as one taxpayer.
``(e) Treatment of Nongrantor Multibeneficiary Trusts.--
``(1) In general.--Any trust or portion of a trust which is
a nongrantor multibeneficiary trust shall be treated as an
individual to whom this chapter applies.
``(2) Computation of tax.--
``(A) In general.--In applying this chapter to a
nongrantor multibeneficiary trust--
``(i) the zero bracket threshold shall be
equal to the sum of--
``(I) $0, plus
``(II) the lowest unused 0 percent
bracket amount assigned to the trust by
all beneficiaries of the trust, and
``(ii) the top bracket threshold shall be
equal to the sum of--
``(I) $0, plus
``(II) the lowest unused 2 percent
bracket amount assigned to the trust by
all beneficiaries of the trust.
``(B) Unused 0 percent bracket amount.--For
purposes of this paragraph, the term `unused 0 percent
bracket amount' means, with respect to any beneficiary
for any calendar year, the lesser of--
``(i) the excess (if any) of--
``(I) the zero bracket threshold,
over
``(II) the sum of--
``(aa) the net value of all
taxable assets of the
beneficiary for the calendar
year, plus
``(bb) any unused 0 percent
bracket amount assigned by the
beneficiary to other nongrantor
multibeneficiary trusts, or
``(ii) the portion of the net value of all
taxable assets of the trust which such
beneficiary is eligible to receive.
``(C) Unused 2 percent bracket amount.--For
purposes of this paragraph, the term `unused 2 percent
bracket amount' means, with respect to any beneficiary
for any calendar year, the lesser of--
``(i) the excess (if any) of--
``(I) the top bracket threshold
reduced by the zero bracket threshold,
over
``(II) the sum of--
``(aa) the net value of all
taxable assets of the
beneficiary for the calendar
year in excess of the zero
bracket threshold, plus
``(bb) any unused 2 percent
bracket amount assigned by the
beneficiary to other nongrantor
multibeneficiary trusts, or
``(ii) the portion of the net value of all
taxable assets of the trust which such
beneficiary is eligible to receive.
``(D) Assignment of amounts.--The assignment of any
amount of unused 0 percent bracket amount and unused 2
percent bracket amount shall be made at such time and
in such manner as specified by the Secretary in
regulations. In any case in which no affirmative
assignment is made by a beneficiary, the amount
assigned shall be $0.
``(3) Nongrantor multibeneficiary trust.--For purposes of
this chapter--
``(A) In general.--The term `nongrantor
multibeneficiary trust' means any trust or portion of a
trust--
``(i) with respect to which no person is
treated as an owner under subpart E of
subchapter J of chapter 1,
``(ii) no property of which is attributable
to a gratuitous transfer of assets by a person
who is subject to tax under this chapter for
the calendar year, and
``(iii) which has more than one beneficiary
(determined as of the last day of the calendar
year).
``(B) Exception.--Such term shall not include--
``(i) any trust described in section 401(a)
and exempt from tax under section 501(a),
``(ii) any trust all of the unexpired
interests in which are devoted to one or more
of the purposes described in section
170(c)(2)(B),
``(iii) any charitable lead annuity trust
(as defined in section 2642(e)(3)) or
charitable lead unitrust, or
``(iv) any charitable annuity remainder
trust (as defined in section 664(d)(1)) or any
charitable remainder unitrust (as defined in
section 664(d)(2)).
``(C) Beneficiary.--The term `beneficiary' shall
not include any person whose interest in a trust is
contingent on the death of another person with an
interest in such trust.
``SEC. 2902. NET VALUE OF TAXABLE ASSETS.
``(a) In General.--For purposes of this subtitle, the term `net
value of all taxable assets' means, as of any date, the value of all
property of the taxpayer (other than property excluded under subsection
(b)), real or personal, tangible or intangible, wherever situated,
reduced by any debts (including any debts secured by property excluded
under subsection (b)) owed by the taxpayer.
``(b) Exclusion for Certain Assets.--Property of the taxpayer shall
not be taken into account under subsection (a) if such property--
``(1) has a value of $50,000 or less (determined without
regard to any debt owed by the taxpayer with respect to such
property),
``(2) is tangible personal property, and
``(3) is not property--
``(A) which is used in a trade or business of the
taxpayer,
``(B) in connection with which a deduction is
allowable under section 212, or
``(C) which is a collectible as defined in section
408(m), a boat, an aircraft, a mobile home, a trailer,
a vehicle, or an antique or other asset that maintains
or increases its value over time (within the meaning of
section 5.02(2) of Revenue Procedure 2018-08).
``(c) Rules for Determining Property of the Taxpayer.--For purposes
of this subtitle--
``(1) Property included in estate.--Any property that would
be included in the estate of the taxpayer if the taxpayer died
shall be treated as property of the taxpayer.
``(2) Inclusion of certain gifts.--Any property transferred
by the taxpayer after the date of the enactment of this
chapter, to an individual who is a member of the family of the
taxpayer (as determined under section 267(c)(4)) and has not
attained the age of 18 shall be treated as property of the
taxpayer for any calendar year before the year in which such
individual attains the age of 18.
``(3) Attribution of property held by trusts.--
``(A) Grantor trusts.--If an individual is treated
as the owner of any portion of a trust under subpart E
of subchapter J of chapter 1, property attributable to
such trust or portion of the trust shall be treated as
property of the individual and not as property of the
trust.
``(B) Nongrantor trusts.--
``(i) In general.--In the case of a trust
or portion of a trust which is not described in
subparagraph (A), any property which is
attributable to a gratuitous transfer of assets
by an individual who is subject to tax under
this chapter for the calendar year shall be
treated as property of such individual and not
as property of the trust.
``(ii) Other trusts.--
``(I) In general.--In the case of
any trust or portion of a trust which
is described in subclause (II), the
property of such trust shall be treated
as the property of the beneficiary of
such trust and not as the property of
the trust.
``(II) Trusts to which this
subclause applies.--A trust is
described in this subclause if such
trust not described in subparagraph
(A), the assets of such trust are not
attributable to a gratuitous transfer
of assets by a person who is subject to
tax under this chapter for the calendar
year, and such trust has a single
beneficiary (determined as of the last
day of the calendar year).
``(C) Right of recovery.--
``(i) In general.--If any part of the net
value of taxable assets of an individual on
which tax has been paid consists of the value
of property held by a trust which is included
in the net value of taxable assets of such
individual by reason of subparagraph (B), then
such individual shall be entitled to recover
from the trust the amount which bears the same
ratio to the recoverable amount as--
``(I) the value of such property,
bears to
``(II) the net value of taxable
assets of the taxpayer.
``(ii) Recoverable amount.--For purposes of
clause (i), the recoverable amount with respect
to any trust is the excess of--
``(I) the tax imposed under this
chapter for the calendar year on the
individual, over
``(II) the amount of such tax which
would be imposed for such calendar year
on such individual if no property held
by such trust were included in the net
value of taxable assets of the
individual.
``(iii) Treatment where no recovery.--In
any case where a trust does not reimburse any
taxpayer as provided in clause (i), the
taxpayer shall be treated for purposes of this
chapter as having made a gratuitous transfer to
the trust in an amount equal to the amount
determined under clause (i). Such transfer
shall be treated as having been made on the
last day of the calendar year for which the tax
under subsection (a) was due.
``(4) Treatment of assets held by certain split-interest
trusts.--
``(A) Remainder interests in charitable remainder
annuity trusts and charitable remainder unitrusts.--In
the case of any charitable remainder annuity trust (as
defined in section 664(d)(1)) or of a charitable
remainder unitrust (as defined in section 664(d)(2))--
``(i) the present value of any remainder
interest shall not be taken into account under
subsection (a), and
``(ii) the present value of any other
interests shall be taken in account under
subsection (a), in accordance with regulations
promulgated by the Secretary, as the property
of the beneficiaries of such interests.
``(B) Charitable lead annuity trusts and charitable
lead unitrusts.--In the case of a charitable lead
annuity trust (as defined in section 2642(e)(3)) or a
charitable lead unitrust--
``(i) the present value of any interest
described in section 2522(c)(2)(B) shall not be
taken into account under subsection (a), and
``(ii) notwithstanding paragraphs (A) and
(B) of paragraph (3), the present value of any
remainder interest shall be taken into account
under subsection (a), in accordance with
regulations promulgated by the Secretary, as
the property of the beneficiaries of such
remainder interest.
``(d) Establishment of Valuation Rules.--Not later than 12 months
after the date of the enactment of this section, the Secretary shall
establish rules and methods for determining the value of any asset for
purposes of this subtitle, including rules for the valuation of assets
that are not publicly traded or that do not have a readily
ascertainable value. Such rules and methods--
``(1) may utilize retrospective and prospective formulaic
valuation methods not currently in use by the Secretary,
``(2) may require the use of formulaic valuation approaches
for designated assets, including formulaic approaches based on
proxies for determining presumptive valuations, formulaic
approaches based on prospective adjustments from purchase
prices or other prior events, or formulaic approaches based on
retrospectively adding deferral charges based on eventual sale
prices or other specified later events indicative of valuation,
and
``(3) may address the use of valuation discounts.
``SEC. 2903. SPECIAL RULES.
``(a) Deceased Individuals.--
``(1) In general.--In the case of any individual who dies
during a calendar year and who is not married on the date of
such individual's death--
``(A) section 2901(a) shall be applied by
substituting `the date of the individual's death' for
`the last day of the calendar year', and
``(B) the amount of the tax imposed under such
section shall be reduced by an amount which bears the
same ratio to such amount (determined without regard to
this subsection) as--
``(i) the number of days in the calendar
year after the date of the individual's death,
bears to
``(ii) 365.
``(2) Coordination with estate tax.--For purposes of
section 2053, the tax imposed by this section for the year of
the decedent's death shall be considered to have been imposed
before such death.
``(b) Application to Non-Residents.--In the case of any individual
who is a non-resident and not a citizen of the United States, this
subtitle shall apply only to the property of such individual which is
situated in the United States (determined under rules similar to the
rules under subchapter B of chapter 11).
``(c) Application to Covered Expatriates.--In the case of an
individual who is a covered expatriate (as defined in section 877A),
section 2901(a) shall be applied--
``(1) as if the calendar year ended on the day before the
expatriation, and
``(2) as if the rate of tax under both subparagraphs (A)
and (B) of section 2901(b)(1) were 40 percent.
``SEC. 2904. INFORMATION REPORTING.
``(a) In General.--Not later than 12 months after the date of the
enactment of this section, the Secretary shall by regulations require
the reporting of any information concerning the net value of assets
appropriate to enforce the tax imposed by this chapter.
``(b) Method of Reporting.--The Secretary shall, where appropriate,
require the reporting made under subsection (a) to be made as a part of
existing income reporting requirements (including requirements under
chapter 4 (relating to taxes to enforce reporting on certain foreign
accounts)).
``(c) Responsibility for Reporting.--The Secretary may impose
reporting obligations by reference to the ownership, control,
management, claim to income from, or other relationship to assets and
liabilities for purposes of administering the tax imposed by this
section and may impose such obligations on financial institutions,
business entities, or other persons, including requiring business
entities to provide estimates of the value of the entity itself.
``SEC. 2905. ENFORCEMENT.
``The Secretary shall annually audit not less than 30 percent of
taxpayers required to pay the tax imposed under this chapter.''.
(b) No Deduction From Income Taxes.--Section 275 of the Internal
Revenue Code of 1986 is amended by inserting after paragraph (6) the
following new paragraph:
``(7) Taxes imposed by chapter 18.''.
(c) Extension of Time for Payment of Tax.--
(1) In general.--Section 6161(a) of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
paragraph:
``(3) Wealth tax.--
``(A) In general.--In the case of taxpayer
described in subparagraph (B), the Secretary may extend
the time for payment of the tax imposed under chapter
18 for a reasonable period not to exceed 5 years from
the date fixed for the payment thereof.
``(B) Taxpayers described.--A taxpayer is described
in this subparagraph if such the Secretary determines--
``(i) the taxpayer has severe liquidity
constraints, or
``(ii) immediate payment would cause undue
hardship on an ongoing enterprise.''.
(2) Rules.--Not later than 12 months after the date of the
enactment of this Act, the Secretary of the Treasury (or the
Secretary's delegate) shall establish rules for the application
of the amendments made by paragraph (1).
(d) Application of Accuracy Related Penalties.--
(1) In general.--Section 6662(b) of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
paragraph:
``(10) Any substantial wealth tax valuation
understatement.''.
(2) Substantial wealth tax understatement.--Section 6662 of
such Code is amended by adding at the end the following new
subsection:
``(m) Application to Substantial Wealth Tax Valuation
Understatement.--
``(1) Substantial wealth tax valuation understatement
defined.--
``(A) In general.--For purposes of this section,
there is a substantial wealth tax valuation
understatement if the value of any property claimed on
any return of tax imposed by subtitle B-1 is 65 percent
or less of the amount determined to be the correct
amount of such valuation.
``(B) Limitation.--No penalty shall be imposed by
reason of subsection (b)(10) unless the portion of the
underpayment attributable to substantial wealth tax
valuation understatements for the calendar year exceeds
$5,000.
``(2) Increased penalty.--
``(A) In general.--In the case of any portion of an
underpayment which is attributable to one or more
substantial wealth tax valuation understatement,
subsection (a) shall be applied--
``(i) in the case of a substantial wealth
tax valuation understatement which is a gross
wealth tax valuation misstatement, by
substituting `50 percent' for `20 percent', and
``(ii) in any other case, by substituting
`30 percent' for `20 percent'.
``(B) Gross wealth tax valuation misstatement.--For
purposes of subparagraph (A), the term `gross wealth
tax valuation misstatement' means a substantial wealth
tax valuation understatement, as determined under
paragraph (1) by substituting `40 percent' for `65
percent'.''.
(e) Clerical Amendment.--The table of subtitles of such Code is
amended by inserting after the item relating to subtitle B the
following new item:
``Subtitle B-1--Wealth Tax''.
(f) Effective Date.--The amendments made by this section shall
apply to calendar years beginning after December 31, 2024.
(g) Periodic Reports.--Not later than January 1, 2027, and every 2
years thereafter, the Secretary of the Treasury (or the Secretary's
delegate) shall submit to Congress a report on the tax imposed under
chapter 18 of the Internal Revenue Code of 1986 (as added by this Act),
including any issues related to the administration and enforcement of
such tax.
SEC. 3. STRENGTHENING DISCLOSURE REQUIREMENTS.
(a) Regulatory Authority.--The Secretary of the Treasury (or the
Secretary's delegate) may issue such rules and regulations as necessary
to prevent taxpayers from avoiding the purpose of information reporting
requirements under the Internal Revenue Code of 1986 by placing assets
in any foreign corporation, partnership, or trust in which the taxpayer
holds directly or indirectly, a significant interest as the sole or
principal owner or the sole or principal beneficial owner.
(b) FATCA Enforcement Plan.--The Secretary of the Treasury (or the
Secretary's delegate) shall develop a comprehensive plan for managing
efforts to leverage data collected under chapter 4 of the Internal
Revenue Code of 1986 in agency compliance efforts. Such plan shall
include an evaluation of the extent to which actions being undertaken
as of the date of the enactment of this Act for the enforcement of the
requirements of such chapter improve voluntary compliance and address
noncompliance with such requirements.
SEC. 4. INTERNAL REVENUE SERVICE FUNDING.
(a) In General.--Subchapter A of chapter 80 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new section:
``SEC. 7813. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated to the Secretary for the
period of fiscal years 2024 through 2034--
``(1) for enforcement of this title, $70,000,000,000,
``(2) for taxpayer services, $10,000,000,000, and
``(3) for business system modernization,
$20,000,000,000.''.
(b) Clerical Amendment.--The table of sections for subchapter A of
chapter 80 of the Internal Revenue Code of 1986 is amended by adding at
the end the following new item:
``Sec. 7813. Authorization of appropriations.''.
<all>