Imposition of tax on net value of assets

(a) In general The Internal Revenue Code of 1986 is amended by inserting after subtitle B the following new subtitle: B-1 Wealth tax Chapter 18—Determination of wealth tax 18 Determination of wealth tax Sec. 2901. Imposition of tax. Sec. 2902. Net value of assets. Sec. 2903. Special rules. Sec. 2904. Administrative provisions. 2901. Imposition of tax (a) In general In the case of an applicable taxpayer, there is hereby imposed a tax computed equal to 5 percent of the net value of assets held by the taxpayer for the calendar year. (b) Applicable taxpayer (1) In general For purposes of this chapter, the term applicable taxpayer means any individual or trust if the net value of all assets held by the taxpayer for the calendar year exceeds $1,000,000,000. (2) Inflation adjustment (A) In general In the case of any calendar year after 2026, the $1,000,000,000 amount under paragraph (1) shall be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting in subparagraph (A)(ii) thereof calendar year 2025 for calendar year 2016. (B) Rounding If any amount as adjusted under subparagraph (A) is not a multiple of $1,000,000, such dollar amount shall be rounded to the next lowest multiple of $1,000,000. (c) Treatment of married individuals For purposes of this section, individuals who are married (as defined in section 7703) shall be treated as one taxpayer. 2902. Net value of assets (a) In general The net value of assets held by an applicable taxpayer for any calendar year shall be the excess of— (1) the value of all property of the taxpayer, real or personal, tangible or intangible, wherever situated, on the last day of such calendar year (computed without regard to any debt owed by the taxpayer and secured by the property), over (2) the amount of any debt owed by the taxpayer on the last day of such calendar year. (b) Inclusion of property of related children For purposes of this subtitle, any property of an individual who is a child of the taxpayer (as defined in section 152(f)(1)) and has not attained the age of 18 shall be treated as property held by the taxpayer for any calendar year before the year in which such individual attains the age of 18. (c) Establishment of valuation rules (1) Authority of Secretary The Secretary shall establish rules and methods for determining the value of any asset for purposes of this subtitle. (2) General rules Except as otherwise provided in this paragraph, the rules and methods established under paragraph (1) may be similar to the rules of part III of subchapter A of chapter 11 (other than the rules of sections 2031(c), 2032A, 2035, and 2044). (3) Rules for assets the value of which is not readily ascertainable (A) In general In the case of any property the value of which is not readily ascertainable, the Secretary may allow the taxpayer to elect to use a value which is equal to the most recent readily ascertainable value of such property increased by an average rate of appreciation applicable to assets of a similar class. (B) Limitation The Secretary may not allow a taxpayer to make an election under this paragraph for any calendar year if the taxpayer made an election under this paragraph for the preceding calendar year. 2903. Special rules (a) Deceased individuals In the case of any individual who dies during a calendar year— (1) section 2901 shall be applied as if the calendar year ended on the day of the individual's death, and (2) the amount of the tax imposed under such section shall be reduced by an amount which bears the same ratio to such amount (determined without regard to this subsection) as— (A) the number of days in the calendar year after the date of the individual's death, bears to (B) 365. (b) Trusts (1) Grantor trusts If a grantor or another person is treated as the owner of any portion of a trust under subpart E of part I of subchapter J of chapter 1, then the grantor or such other person shall be treated as holding that portion of the assets of such trust, and any remaining portion shall be subject to tax as provided in section 2901. (2) Incomplete gifts In the case of any person who makes a transfer of property to a trust which is not treated as a gift for purposes of chapter 11, the portion of such trust attributable to such property shall be treated as the property of the person making the transfer and not the property of such trust. (3) Aggregation rules The rules of section 643(f) shall apply for purposes of this subtitle. (c) Application to nonresidents (1) In general In the case of any taxpayer who is a non resident and not a citizen of the United States, section 2901(a) shall be applied by substituting net value of domestic assets for net value of all assets. (2) Net value of domestic assets For purposes of this subtitle, the term net value of domestic assets means— (A) the value of all property of the taxpayer, real or personal, tangible or intangible, situated in the United States (determined under rules similar to the rules under subchapter B of chapter 11), on the last day of such calendar year (computed without regard to any debt owed by the taxpayer and secured by the property), over (B) the amount of any debt owed by the taxpayer and secured by assets described in subparagraph (A), determined as of the last day of such calendar year. (3) Treatment of married individuals In the case of married individuals, this subsection shall only apply if both individuals are non residents and not citizens of the United States. (d) Application to covered expatriates (1) In general In the case of an applicable taxpayer who is a covered expatriate the expatriation date of which occurs during the calendar year— (A) section 2901 shall be applied as if the calendar year ended on the day before the expatriation, and (B) the rate of tax under 2901(a) for such calendar year shall be 60 percent. (2) Covered expatriate; expatriation date For purposes of this subsection— (A) Covered expatriate The term covered expatriate has the meaning given such term under section 877A, except that in the case of married individuals, such taxpayer shall be treated as a covered expatriate only if neither individual is a United States citizen or lawful permanent resident of the United States (within the meaning of section 7701(b)(6)). (B) Expatriation date The term expatriation date has the meaning given such term under section 877A(g)(3). 2904. Administrative provisions (a) Wealth registry The Secretary shall establish a registry of ownership for assets taken into account under section 2902(a)(1), including publicly traded securities, digital assets, shares of closely held businesses, and real estate within the United States. For purposes of establishing and maintaining the registry under the preceding sentence, the Secretary shall— (1) rely on existing sources of information, including central depositories for securities and State, local, and foreign real property records; and (2) require timely reporting of newly acquired assets in conjunction with information required under existing information reporting requirements. (b) Information reporting (1) In general The Secretary shall by regulations require the reporting of information concerning the value of assets, including— (A) the value of any accounts which pay interest reportable under section 6049, (B) the value of publicly traded stock with respect to which dividends are reported under section 6042, (C) the value of any applicable privately held business, (D) the value of any assets held through mutual funds or brokerage accounts, (E) the value of any assets held in eligible retirement plans (as defined in section 402(c)(8)(B)), and (F) such other assets as the Secretary determines is appropriate. (2) Method of reporting The Secretary shall, where appropriate, require the reporting made under paragraph (1) to be made as a part of existing income reporting requirements. (3) Applicable privately held business For purposes of this subsection, the term applicable privately held business means any trade or businesses— (A) which does not meet the gross receipts test under section 448(c) for the taxable year ending with or within the calendar year, (B) in which an individual who was an applicable taxpayer (other than a covered expatriate, as defined in section 2903(d)(2)) for the preceding calendar year holds (directly or indirectly) 5 percent or more of the ownership interests (by value), and (C) to which paragraph (1)(B) does not apply. (c) Time for payment of tax The due date for returns with respect to the tax imposed under this subtitle shall be not later than the latest due date for which a return of tax under subtitle A would be due if the taxpayer's taxable year ended on December 31 and the taxpayer owed tax for such taxable year.. (b) No deduction from income taxes Section 275 of the Internal Revenue Code of 1986 is amended by inserting after paragraph (6) the following new paragraph: (7) Taxes imposed by chapter 18.. (c) Information reporting penalties Section 6724(d)(1) of the Internal Revenue Code of 1986 is amended by striking and at the end of subparagraph (C), by striking the period at the end of subparagraph (D) and inserting, and, and by inserting after subparagraph (D) the following new subparagraph: (E) any statement or return required to be filed under section 2904(b) which is not reported under any other provision of this paragraph.. (d) Clerical amendment The table of subtitles of the Internal Revenue Code of 1986 is amended by inserting after the item relating to subtitle B the following new item: Subtitle B-1—Wealth tax. (e) Effective date The amendments made by this section shall apply to calendar years beginning after the date of the enactment of this Act.