Sen. Markey and Sen. Sanders Introduce the Equal Tax Act to Tax Investment Gains Like Regular Income
Small business owners are affected in two key ways. First, the qualified business income deduction (Section 199A) is capped at $1 million in taxable income, meaning high-earning pass-through business owners lose part of their 20% deduction. Second, business assets transferred at death or by gift are now subject to capital gains taxes on appreciation, though qualifying family businesses get a 50% exclusion above $1 million if heirs continue operating for 10 years.
“so much of the taxable income of the taxpayer for the taxable year as does not exceed $1,000,000”
Read twice and referred to the Committee on Finance.
Sent to a congressional committee for expert review. The committee decides whether this bill moves forward.
Introduced in Senate
The bill was officially filed and given a number. It now enters the legislative queue.
No votes have been recorded for this legislation yet.
The Equal Tax Act aims to raise $300 billion over a decade by taxing capital gains at ordinary rates for high earners. It closes the stepped-up basis loophole but includes specific protections for family farms and small businesses to ensure they can remain operational across generations.
The Equal Tax Act would ensure that millionaires and billionaires pay the same tax rates on investment income as working people do on wages. The bill addresses the 'stepped-up basis' loophole, requiring taxes on asset appreciation when transferred as gifts or at death.
The Equal Tax Act is highlighted as a key component of a broader legislative agenda to restore fairness. By taxing all income over $1 million at the same rate, the bill removes the preferential treatment currently given to capital gains over earned labor income.
Document Type
Congressional Bill
Official Title
Equal Tax Act
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