H.R. 2912, titled the Oligarch Act of 2025, would create a new federal wealth tax by adding Subtitle B-1 to the Internal Revenue Code. The tax targets the net value of an individual’s or certain trusts’ taxable assets as of the last day of each calendar year, applying a four-bracket rate structure (2%, 4%, 6%, and 8%) on portions of net wealth that exceed a high threshold. The threshold is defined as 1,000 times the greater of $50,000 or the applicable median household wealth, with the Secretary annually determining the median. Married individuals are treated as a single taxpayer for purposes of this tax. The bill also lays out rules for valuing assets (including non-publicly traded assets), reporting requirements, enforcement measures (including audits), penalties for significant valuation misstatements, and several special rules for deaths, non-residents, and expatriates. It explicitly states that tax-exempt entities (like many nonprofits) are exempt from the wealth tax, and it includes various administrative provisions (extensions of payment, no deduction from income taxes, etc.). The act would take effect for calendar years beginning after enactment.
Key Points
- 1Imposition and rates
- 2- A wealth tax is imposed on the net value of all taxable assets of an “applicable taxpayer” (individuals or certain trusts) at year-end.
- 3- For individuals, tax is calculated using four bands: 2% on assets above the threshold up to 10x threshold, 4% from 10x to 100x, 6% from 100x to 1,000x, and 8% on amounts above 1,000x threshold.
- 4- For trusts, the rate starts at 8% on assets above the threshold.
- 5- Married individuals are treated as a single applicable taxpayer.
- 6Thresholds and medians
- 7- The threshold amount equals 1,000 times the greater of $50,000 or the applicable median household wealth. The Secretary annually determines the median household wealth.
- 8- Because the threshold is tied to the greater of $50,000 and the median wealth, the threshold is generally substantial, potentially placing the tax primarily on very large accumulations of wealth.
- 9Asset valuation and reporting
- 10- The net value of taxable assets is the value of all property minus debts, with specified exclusions for certain small, tangible property (e.g., assets under $50,000 that are tangible and not used in business, not deductible for certain purposes, etc.).
- 11- The Secretary must establish valuation rules for assets that are not publicly traded or lack readily determinable values, allowing formulaic or proxy-based methods and potential valuation discounts.
- 12- Information reporting is required to enforce the tax, potentially integrated with existing income reporting and other asset disclosures.
- 13Special rules and administration
- 14- Special rules apply for deceased individuals (proration by days after death), non-residents (tax applies only to U.S.-situated assets), and covered expatriates (calendar year ends the day before expatriation).
- 15- The act creates broad enforcement tools, including annual audits of at least 30% of taxpayers subject to the tax.
- 16- Taxes imposed by the wealth tax would not be deductible against other federal income taxes.
- 17- The Secretary may extend payment for up to five years for taxpayers facing liquidity constraints or hardship on an ongoing enterprise; rules to implement this are to be issued.
- 18- Penalties for substantial valuation understatement are added, with enhanced penalties for “gross” misstatements of wealth tax valuation.
- 19Exemptions, structure, and effective date
- 20- Tax-exempt entities (e.g., many nonprofits) are exempt.
- 21- The act reclassifies Subtitle B-1 as part of the Code’s subtitle table.
- 22- The amendments apply to calendar years beginning after enactment.