Schedule a Free Consultation

facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause
A Federal Wealth Tax Has Been Introduced in the Senate. Here's What Affluent Families Need to Know Thumbnail

A Federal Wealth Tax Has Been Introduced in the Senate. Here's What Affluent Families Need to Know

Several U.S. senators have proposed new legislation in an effort to raise $3 trillion in tax revenue over the next decade.1 Called the Ultra-Millionaire Tax, this new proposed legislation comes in direct response to the economic turmoil Americans have experienced throughout the COVID-19 pandemic.

Senator Elizabeth Warren described the necessity for such revenue saying, “As Congress develops additional plans to help our economy, the wealth tax should be at the top of the list to help pay for these plans because of the huge amounts of revenue it would generate.”1

The majority of Americans would not see a direct impact from this proposed wealth tax. But for those it would affect, this could greatly increase their tax obligation in the future. If you’re concerned, here’s what you should know about this potential change.

What Is Being Proposed?

Several senators proposed the Ultra-Millionaire Tax Act on March 1, 2021. This tax legislation would impact 100,000 households, or those considered to be in the top 0.05 percent of wealth earners in America.1 More specifically, the Ultra-Millionaire Tax Act is a wealth tax that would affect those with a net worth of $50 million or more.

Affected ultra-high-net-worth families would be taxed as follows:

  • Two percent annual tax for those with a net worth of $50 million to $1 billion.
  • Three percent annual tax (two percent plus one percent surtax) for those with a net worth of $1 billion or more.

What Is a Wealth Tax?

With income tax, the individual is taxed on how much they made during the previous year in taxable income (such as a salary, retirement account withdrawals, interest, etc.).

Wealth tax, on the other hand, is an annual tax that is applied toward an individual’s actual net worth - as opposed to the income earned over that year.

Do Wealth Taxes Currently Exist?

Several states have proposed wealth taxes in the past. In 2020, California introduced a wealth tax for residents (and former eligible residents) with a net worth of $30 million or more. The proposed legislation, however, has not moved forward.

Several states currently have a “millionaire tax” implemented, which is based on an individual or family's taxable yearly income.

What Should Ultra-High-Net-Worth Families Do to Prepare?

Learning that you may be faced with an additional tax burden never feels good. But the reality is, there’s no guarantee of when, or if, this proposed legislation will be passed into law. Those concerned about the potential tax obligations should work with their financial planner or tax professional. Familiarize yourself with the details of the proposed wealth tax, as well as any anti-evasion and avoidance measures proposed as well.

Preparing yourself and your finances ahead of time may help ease potential tax burdens - or help you determine how you may be able to lower your tax obligation. Discuss your concerns with your trusted financial professional as you continue to monitor this proposed legislation.

Click here to schedule a call with a BWC advisor today.


  1. https://www.warren.senate.gov/imo/media/doc/Wealth%20Tax%20Bill%20Text.pdf

The information presented in this article is obtained from or based on sources believed to be reliable. BWC does not represent or warrant its accuracy or completeness and is not responsible for losses or damages arising out of errors, omissions or changes or from the use of information presented in this article. The article does not purport to contain all the information that an interested party may desire and, in fact, provides only a limited view. Information presented does not constitute an offer to sell or a solicitation of an offer to buy any security.

All investments involve risk, including loss of principal invested. Past Performance does not guarantee future performance. Individual client accounts and performance vary. BWC does not provide tax advice.

About Beirne Wealth Consulting Services, LLC – www.beirnewealth.com

Beirne Wealth Consulting Services, LLC (“BWC”) is a privately owned, SEC Registered Investment Advisor with offices in Connecticut and Pennsylvania. BWC provides independent, fee-based investment management services and customized financial planning solutions. Our institutional business provides consulting expertise to defined benefit and defined contribution plans, endowments, foundations and non-profit organizations. Our private clients include high net-worth individuals and prominent families, many of whom bring complex wealth management challenges and multigenerational planning needs. For more information, please visit www.beirnewealth.com or give us a call today at 888-231-6372.

*Registration does not imply a level of skill or training.

© 2021 Beirne Wealth Consulting Services, LLC (BWC). All rights reserved. Reproduction or Use without permission is prohibited.