WASHINGTON (NEWS10) — On Monday, several congress members announced legislation to create an ultra-millionaire tax on fortunes over $50 million. The bicameral Ultra-Millionaire Tax Act was introduced with the hopes of building a fairer economy and help narrow the racial wealth gap. The Act would ask the wealthiest 100,000 households in America, or the top 0.05%, to “pay their fair share.”

The legislation creates a 2% annual tax on the net worth of households and trusts between $50 million and $1 billion and places an additional 1% annual surtax (3% tax overall) on the net worth of households and trusts above $1 billion. According to a 2021 analysis from the University of California-Berkeley, enacting the ultra-millionaire tax would bring in at least $3 trillion in revenue over 10 years, without raising taxes on the 99.95% of American households that have net worth below $50 million.

The Ultra-Millionaire Tax includes “robust anti-evasion and avoidance measures,” including:

  • A $100 billion investment to rebuild and strengthen the IRS, ensuring the agency has the resources to hire and train additional personnel, modernize IT systems, and implement the new asset valuation, reporting, and enforcement requirements for the tax
  • A 30% minimum audit rate for taxpayers subject to the Ultra-Millionaire Tax
  • A 40% “exit tax” on the net worth above $50 million of any U.S. citizen who renounces their citizenship in order to escape paying their fair share in taxes
  • New tools to determine the value of hard-to-value assets, enabling the IRS to tighten and expand upon existing valuation rules
  • Systematic third-party reporting that builds on existing tax information exchange agreements adopted after the Foreign Account Tax Compliance Act, and penalties for underpayment