Cap Individual Net Wealth at $999,999,999

The top 0.1 percent of U.S. households held $22.48 trillion in wealth in the third quarter of 2024 (Federal Reserve, Distributional Financial Accounts). The Forbes 400 alone held an estimated $5.4 trillion in 2024. The proposal sets a statutory ceiling on individual net wealth at $999,999,999, enforced through annual mark-to-market valuation and a 100 percent marginal tax on wealth above the cap. Wealth above the threshold would accrue to the federal Treasury rather than to the individual holder.

Current federal tax treatment of wealth

The federal income tax under the Sixteenth Amendment reaches realized income only. Asset appreciation is not income for tax purposes until sold, and the basis of an inherited asset resets at death under 26 U.S.C. § 1014, eliminating accrued gains from the tax base. Estate and gift taxes apply at transfer rather than annually, and current law exempts the first $13.99 million per individual in 2025 (IRS Rev. Proc. 2024-40).

Under current law, wealth held in appreciating assets accrues without recurring federal tax. ProPublica’s analysis of leaked IRS files for 2014 through 2018 calculated a “true tax rate” of 3.4 percent for the 25 wealthiest Americans, measured against the growth in their net worth over the period.

The statute and constitutional amendment

The proposal pairs a federal cap on individual net wealth at $999,999,999 with a constitutional amendment addressing the Direct Tax Clause. An amendment would resolve constitutional uncertainty: a recurring tax on net worth has not been tested under Pollock v. Farmers’ Loan & Trust Co. (1895), and the Supreme Court in Moore v. United States, 602 U.S. ___ (2024), declined to decide whether unrealized appreciation can be taxed as income.

The statute would:

• Define net wealth as the fair market value of all assets minus debts, computed annually
• Apply mark-to-market valuation to publicly traded assets, drawing on the methodology in S. 4815 (117th Congress, “Billionaires Income Tax Act”)
• Require third-party appraisal for closely held businesses, real estate, art, and other illiquid assets, on a five-year rolling basis
• Impose a 100 percent marginal tax annually on net wealth above $999,999,999
• Treat trusts and pass-through entities as constructively owned by their beneficiaries, following the model in S. 510 (117th Congress, “Ultra-Millionaire Tax Act”)
• Apply a 40 percent exit tax on net worth above the cap for individuals renouncing U.S. citizenship, mirroring 26 U.S.C. § 877A
• Fund an IRS Wealth Section at $5 billion annually for valuation, audit, and enforcement
• Set a five-year transition period during which wealth above the cap is taxed at 20 percent annually before stepping to 100 percent

The companion constitutional amendment would explicitly authorize Congress to lay and collect taxes on net wealth without apportionment, parallel to the Sixteenth Amendment’s authorization for income taxes.

Precedent

The federal estate tax under the Revenue Act of 1916 (39 Stat. 777) established federal authority to tax accumulated wealth at transfer, and was upheld in New York Trust Co. v. Eisner, 256 U.S. 345 (1921). The top federal marginal income tax rate stood at 91 percent or higher continuously from 1944 through 1963, applied to income above $200,000 (roughly $2 to $3 million in 2024 dollars), spanning the Truman, Eisenhower, and Kennedy administrations.

Three OECD countries currently levy net wealth taxes annually. Switzerland has done so at the cantonal level since the nineteenth century; the OECD reported Swiss wealth tax revenue of €9.5 billion in 2023, equal to 4.3 percent of total tax receipts. Norway raised €2.7 billion in 2023 (1.5 percent of receipts), with rates of 1.0 to 1.1 percent above NOK 1.76 million. Spain raised €3.1 billion in 2023, with the central solidarity wealth tax (introduced 2022) applying rates of 1.7 to 3.5 percent above €3 million. France levied a solidarity wealth tax (ISF) from 1989 to 2017; the Macron government cited capital flight as a justification for repeal.

First 100 days

Day one. The president transmits the proposed statute to Congress with a Treasury and Office of Legal Counsel analysis of constitutional, valuation, and enforcement questions. The IRS announces the formation of a Wealth Section with initial staffing drawn from existing Large Business and International Division capacity.

Day thirty. Treasury issues proposed regulations on valuation methodology for illiquid assets, modeled on the Billionaires Income Tax Act framework. Congress holds joint House Ways and Means and Senate Finance Committee hearings.

Day ninety. Congress passes the statute and the president signs it. Both houses pass a joint resolution proposing the constitutional amendment authorizing taxation of net wealth without apportionment, sending it to the states for ratification under Article V.

Effect of the cap

Individual net wealth above $999,999,999 is taxed at a 100 percent marginal rate after the five-year phase-in. The proposal does not modify federal tax treatment for households with net wealth at or below $999,999,999. Revenue from the cap, the transitional surtax, and the exit tax flows to the general fund. The accompanying statute would direct an equivalent reduction in income, payroll, or capital gains tax liability for households below the cap.