Editor’s Note, 9/19/2025: This article has been revised to more clearly attribute effective tax rate figures cited by advocate organizations and the Tax Foundation.
A bicameral group of Democrats have introduced the Billionaires Income Tax (BIT) Act, a proposal that would require individuals with more than $100 million in annual income or $1 billion in assets to pay tax each year on the appreciation of their tradable assets, aiming to close longstanding loopholes and address wealth inequality.
Billionaire Income Tax Framework
Senate Finance Committee Ranking Member Ron Wyden (D-OR), Senator Sheldon Whitehouse (D-RI), and Representative Don Beyer (D-VA) introduced the BIT on September 17.
The bill has over 20 cosponsors and would apply a mark-to-market regime to stocks and other tradable assets, requiring applicable taxpayers to recognize gains or losses annually as if the assets were sold at fair market value.
Nontradable assets, such as real estate and private businesses, would be subject to a deferred recapture tax with an interest charge upon sale or transfer, with the total tax capped at 49% of the gain.
The BIT also proposes anti-deferral rules for trusts and pass-through entities, special provisions for deferred compensation and life insurance, and the repeal or limitation of certain tax benefits, including the exclusion for small business stock gains and new investments in qualified opportunity funds.
New reporting requirements would apply to insurers, reinsurers, and payers of deferred compensation, with penalties for noncompliance.
Bill Unveiled
At a press conference Wednesday afternoon, Wyden said the Tax Code that “Republicans have created punishes the hard work of middle-class Americans by forcing them to pay higher rates than the billionaires.”
The committee ranking member added that while the One Big Beautiful Bill (P.L. 119-21) and President Trump’s trade policies are hitting low- and middle-income households “like a wrecking ball,” the BIT “does not change any tax rates” nor “punish” anyone’s individual success.
Beyer, speaking next, said the BIT “would ask many nations billionaires to do what our working families have to do every year: just pay tax on their income,” which “shouldn’t be a tall order.”
He described the bill as a response to a tax system with “two sets of rules: one for working families who pay taxes with their wages in every paycheck and one for ultra wealthy, who can perpetually avoid paying their fair share by delaying paying income taxes on the rising value of their stock portfolios and other assets.”
Whitehouse called the bill “a very important test of our democracy … we do, in fact, need to de-corrupt the Tax Code.”
Beyer, citing IRS data, claimed that “the wealthiest 100th of 1% … pay effective tax rates of about 8% with many paying even lower taxes, or nothing at all.” The bill’s drafters said they worked to close most loopholes. They wanted to make a distinction between liquid assets, which can be measured annually, and fixed assets, which are taxed upon sale.
According to Wyden, the BIT would raise more than $500 billion over 10 years. With that revenue, “we could pay for universal free preschool, plus a major expansion of affordable, high-quality daycare for working and middle-class families,” said Wyden. “We could permanently extend the [Affordable Care Act] premiums and along with improving the Child Tax Credit.”
Organizational Support
Kristen Crowell, executive director of Fair Share America, said “there are over 900 U.S. billionaires, and they’re worth $7.6 trillion. And if you dig a little deeper, there may be actually thousands more worth up to $13 trillion.” She said the public is “fed up” with what she called a “rigged tax system.”
A joint letter addressed to Congress signed by a coalition of organizations, including Fair Share America and Americans for Tax Progress, supported the BIT and urged lawmakers to restore “fairness to our tax system” by passing the bill. “Billionaire wealth has grown by 160% since 2017, while most families have seen little or no comparable growth in income or well-being,” read the letter.
The advocacy groups maintain that “billionaires pay lower effective tax rates than working Americans,” pointing to data compiled by the Tax Foundation that shows average families pay a 13.6% rate. Some of wealthiest individuals, comparatively, pay effective rates as low as 4.8% — their “true tax rate,” the letter claims.
“That means billionaires not only pay lower tax rates than middle-class workers like teachers, nurses, and firefighters, but in some years, they can actually pay less in total tax dollars, even during years when their income from their wealth is substantial,” the organizations told lawmakers.
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