Billionaires Income Tax Act

Section 1 (Purpose) and Section 101: This provision requires high income and high net worth taxpayers to pay tax on their income annually through mark-to-market taxation, similar to how working people pay taxes on their wages. This ensures that the ultra-wealthy contribute on their appreciating assets rather than holding them tax-free.

Section 1 (Purpose) and Section 494: This provision shuts down the loophole allowing ultra-wealthy taxpayers to transfer untaxed appreciated assets to heirs at death so those heirs can sell them tax-free. By treating gifts, bequests, and trust transfers as deemed sales at fair market value, it holds wealthy estates accountable.

Section 221 (Section 409B): This provision adds an additional tax and interest charges on deferred compensation and severance pay for applicable taxpayers. This prevents the ultra-wealthy from sheltering massive executive compensation packages from yearly taxation.

Section 101 (Section 492): This provision imposes a deferral recapture amount, which includes charging interest on a deemed tax amount when nontradable covered assets experience an applicable transfer. This could place a heavy financial and administrative burden on taxpayers who must calculate and pay historical interest penalties.

Section 222 (Section 72): This provision changes the tax treatment of amounts received under private placement life insurance and annuity contracts held by applicable taxpayers, and repeals the death benefit exclusion under Section 101(k). Families or beneficiaries of applicable taxpayers could face significantly higher tax burdens on insurance payouts and contract withdrawals.

Section 231 (Section 1202): This provision eliminates the capital gains exclusion for the sale or exchange of qualified small business stock by an applicable taxpayer, unless acquired before November 30, 2025. This removes a key incentive for wealthy investors backing small businesses.