Senate Finance Committee Chair Ron Wyden (D-OR) intends to introduce a broad "mark-to-market" bill later this year that would require certain taxpayers to pay an annual tax on any unrealized gain on assets. The plan to introduce such a bill was reported by Adam Carasso, Senior Tax and Economic Adviser on the Senate Finance Committee, at a recent D.C. Bar event titled "Legislative Update for Investors in Financial Products and Markets."
Although the details of this bill have yet to be released, Senator Wyden outlined a mark-to-market plan in a white paper titled "Treat Wealth Like Wages" in 2019. In the white paper, Senator Wyden proposed imposing the mark-to-market taxation of tradeable assets (e.g., stocks and bonds) on taxpayers with over $1 million in income or $10 million in assets. The plan would also impose a lookback charge on the realization of gains from non-tradable assets (e.g., business interests and real estate) to reduce incentives available to taxpayers for deferring sale of the assets. Senator Wyden also proposed eliminating the preferential capital gains rates, and taxing capital gain and loss at ordinary income rates.
Previously, Senator Wyden introduced the Modernization of Derivatives Tax Act of 2017 (or "MODA"), which would require mark-to-market and ordinary income treatment for nearly all derivatives.
Mr. Carasso said that any bill introduced by Chair Wyden later this year would be one of many tax proposals introduced by Democrats.
Senator Elizabeth Warren proposed a bill that would provide for an annual tax on households and trusts with a net worth of over $50 million.
A New York State Senate bill that would establish a "billionaire mark to market tax" was referred to the State Budget and Revenue Committee on February 5, 2021.
The Senate Finance Committee will hold hearings on July 18, 2017 to discuss overhauling the tax code and to consider the nomination of David J. Kautter as U.S. Treasury Assistant Secretary for Tax Policy.
Senator Ron Wyden (D-OR) introduced a draft bill that would amend the Internal Revenue Code to revise the tax treatment of derivatives and their underlying investments.