Bill · S. 4490· Senate(119-S-4490)
Fair Trusts for Fiscal Responsibility Act
- Introduced
- 5/12/2026
- Last activity
- 5/12/2026 — Read twice and referred to the Committee on Finance.
- Sponsored by
- Patty Murray
- Cosponsors
- - 4 - 0
- Introduced
- In Committee
What this bill would do
The Fair Trusts for Fiscal Responsibility Act proposes to amend the Internal Revenue Code of 1986 to impose a new tax on the net value of all assets held by applicable trusts. This tax is calculated using a multi-tiered system with rates ranging from 0 percent up to 3 percent based on specific bracket thresholds. The bill establishes a trust withholding credit account to track taxes paid by trusts and beneficiaries. It also coordinates these new rules with existing estate, gift, and generation-skipping transfer taxes. The legislation includes specific valuation rules for various types of property and assets.
Yes
Does this raise taxes on the highest earners?+8
The bill imposes a new multi-tiered tax on the net value of all assets held by applicable trusts.
Does this make the government pay for what it commits to?+3
The bill creates a new revenue stream through the taxation of trust assets.
The opposite
Would high-income households be better off under this?-7
The bill imposes a new tax on significant trust assets and limits valuation discounts for family control.
Would people with substantial wealth be better off under this?-7
The legislation targets high-value trusts with a tiered tax of up to 3 percent.
Who it would affect, and how
Potential Positive Impacts for People
-
Tax Credits for Beneficiaries: The bill allows for a credit against certain taxes to be claimed by beneficiaries for previously paid trust asset taxes (Section 2604).
-
Estate Tax Credits: For citizens and residents, the bill provides a credit against the tax imposed by section 2001 equal to the balance of the trust withholding credit account (Section 2017).
-
Inflation Adjustments: The dollar amounts used for bracket thresholds will be increased annually based on cost-of-living adjustments to account for inflation (Section 2902(b)(3)).
Potential Negative Impacts for People
-
New Tax Burden on Trust Assets: An applicable trust will be subject to a tax on the net value of all its assets held on the last day of any calendar year (Section 2901(a)).
-
Valuation Restrictions: The bill limits the ability to use discounts for family control of an entity when determining the value of an interest (Section 2921(b)(3)).
-
No Deduction for Certain Tax Payments: A deduction will not be allowed for any amount treated as a gift due to the payment of taxes on the income of an applicable grantor trust (Section 2503(b)(1) and Section 2522(f)).
-
Treatment of Nonbusiness Assets: For certain entities, the value of nonbusiness assets must be determined as if the owner held them directly, and no valuation discount is allowed (Section 2921(b)(4)(A)).
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For High Income Households-7Good For High Net Worth Individuals-7
- Economy And Finance
- Increases Wealthy Taxes+8Improves Fiscal Responsibility+3
- 5/12/2026
- Read twice and referred to the Committee on Finance.
- 4 Cosponsors added.
- Introduced in Senate
Angela AlsobrooksDemocrat · Maryland
Cory BookerDemocrat · New Jersey
Chris Van HollenDemocrat · Maryland
Ron WydenDemocrat · Oregon