SB 4306, the “Millionaires Surtax Act,” would amend the Internal Revenue Code to impose a new 10 percent surtax on high-income individuals. The surtax would apply to a taxpayer’s modified adjusted gross income above $2 million, or above $1 million for taxpayers not filing a joint return or not qualifying as a surviving spouse. The bill also includes special rules for nonresident aliens, U.S. citizens and residents living abroad, and certain charitable trusts, and it specifies that the new tax would not be treated as a rate change for certain Internal Revenue Code purposes.
The bill would take effect for taxable years beginning after December 31, 2026. In practical terms, it would increase federal tax liability for very high earners and could affect tax planning, estimated payments, and income structuring for individuals with income above the thresholds. It would not apply to corporations, and it excludes certain charitable trusts from the surcharge. The measure is framed as a targeted tax increase on millionaires rather than a broad-based tax change.
Impact
SB 4306 would add a new Part VIII to subchapter A of chapter 1 of the Internal Revenue Code, creating section 59B and establishing a federal surtax on high-income individuals. It would directly affect individual taxpayers with modified adjusted gross income above the stated thresholds, while leaving corporations outside its scope. The bill would also require conforming clerical changes to the Code’s table of parts and would apply prospectively to tax years beginning after December 31, 2026.
Sentiment
Based on the bill text and the absence of committee debate or recorded votes, the measure appears to be presented as a straightforward progressive tax proposal aimed at raising revenue from very high-income taxpayers. The sponsorship by multiple senators suggests support among lawmakers favoring higher taxes on wealthy individuals, but there is no recorded committee discussion in the provided materials to show broader consensus or opposition. Overall, the available record indicates a policy proposal likely to be viewed favorably by supporters of tax equity and skeptically by opponents of tax increases.
Contention
The main point of contention is likely the policy choice to impose an additional 10 percent tax on income above $2 million, or $1 million for certain filers, which opponents may view as punitive or as a disincentive to investment, work, or entrepreneurship. Supporters would likely argue that the surtax targets only the highest earners and is designed to increase progressivity in the tax code. Additional technical issues may include the treatment of joint filers versus single filers, the special rules for expatriates and nonresident aliens, and the exclusion of charitable trusts from the tax.