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The Democratic Party’s landslide victory in the midterm elections has renewed momentum for taxing the wealthy at the national level. Sen. Ron Wyden (D-Ore.), who will take back control of the Senate Finance Committee, is already warning billionaires. Several proposals have already been submitted to the committee, including measures to eliminate carried interest tax benefits and tax large trust assets.
“On taxes, the committee will step up efforts to pay billionaires their fair share and hold them accountable for tax fraud. Democrats will lead the way on tax policies that put American families first and demand that the ultra-wealthy and corporations pay their fair share,” Wyden said in a statement Wednesday morning.
Tax lawyers told CNBC that the wealth tax and other tax increases are unlikely to pass because Democrats do not have enough seats to overcome President Donald Trump’s veto. But they said the measure was worth monitoring because it shapes the party’s agenda for the next presidential election.
“The proposals are not necessarily going to become law in the next two years, but they do signal what will be on the next administration’s agenda if there is a change of administration in two years,” said Justin Miller, partner and national director of wealth planning at Evercore Wealth Management.
Here are three tax proposals before the Senate Finance Committee that could gain attention post-blue tsunami.
Repeal of the carried interest loophole law
In April, Mr. Wyden and Sen. Angus King, R-Ime., introduced a bill that would eliminate the carried interest tax break, a popular tax break on Wall Street. Under current law, fund managers can tax a portion of a fund’s profits at a lower capital gains tax rate if the investment is held for at least three years. The Carried Interest Loophole Repeal Act would tax investment profits as ordinary income and require fund managers to recognize and pay taxes on deemed compensation annually, rather than deferring taxes until the fund earns the income.
Lawmakers on both sides of the aisle have been proposing changes to the carried interest tax for about 20 years, said Joshua Odintz, a partner at Holland & Knight and former tax adviser to the Treasury Department and the Senate Finance Committee. President Trump repeatedly criticized the provision during the 2016 presidential campaign, calling it “unfair to American workers.”
Odinz said he expects interest carryovers to come under greater scrutiny as Congress faces pressure to shore up the Social Security Trust Fund, which is expected to be depleted by the end of 2032. But he believes the tax cuts will likely be repealed as part of a budget reconciliation bill, rather than as a standalone bill.
“I think issues like carryover interest need to be addressed in the context of the larger tax bill, where it’s hard for members of Congress to say, ‘No, I’m just going to stand up and kill the bill on this one issue,'” he said. “It’s much easier when you have a series of tradeoffs. Members can point to different tradeoffs and say, ‘Look, I get this. I think I had to give up on that, but on the net, this is better for my jurisdiction.'”
Fair Trust Act on Fiscal Responsibility
Sen. Patty Murray (D-Wash.) introduced a bill targeting trusts used to transfer assets while minimizing estate and gift taxes. The Fiscal Responsibility Fair Trust Act establishes a graduated annual tax on trust assets over $50 million, with the tax rate rising to 3% on assets over $1 billion. It would also create a withholding tax system, whereby taxes paid each year would be tracked in an account and later deducted as inheritance or generation-skipping taxes when assets are transferred or a trust is terminated. Unused credits towards inheritance tax may be refunded.
“This is noteworthy because if it gains traction it could fundamentally change the way estate planning is done for the ultra-high net worth,” said David Blum, partner and chair of Ackerman’s national tax practice group.
Miller said he was skeptical the bill would pass given how complex it would be to implement it. He believes it would be more practical for the U.S. to follow the example of the U.K. and Canada and tax trust assets periodically over a set number of years. In the UK, inheritance tax is levied every 10 years, and in Canada there is a 21-year rule for most personal and family trusts.
Redistributing Billions of Dollars by Creating a New High-Income Obligation for Overlooked Debt (ROBINHOOD) Act of 2026
Several incoming Democratic senators, including James Talarico and Abdul El-Sayed, have pledged to rein in the “buy, borrow, die” tax strategy practiced by billionaires Larry Ellison and Elon Musk. Wealthy founders and investors borrow against their stock in order to sell the stock and get cash without incurring capital gains taxes. If you hold the assets until your death, your heirs can receive the assets on a graduated tax basis, while the accumulated gains remain tax-free.
The Senate Robinhood Act, introduced in June by Sen. Ruben Gallego (D-Ariz.), would require ultra-wealthy borrowers to pay capital gains taxes on certain long-term assets they borrow against. Applicable to individuals with assets of at least $1 billion or annual income of $100 million or more, and only if unrealized gains on assets are at least equal to the amount of the loan.
A companion House bill introduced by Representative Daniel Goldman of New York would impose a 20% tax on certain asset-backed loans for borrowers with incomes over $400,000. The House bill forgives several types of loans, including mortgages and margin loans.
Miller said these bills are narrower in scope and much easier to implement than the broad wealth tax proposals that dominate the headlines. These “buy, borrow, die” bills have gotten less attention, but have a more realistic chance of passing, he said.
With tax policy gridlock expected over the next two years, Odinz advised wealthy taxpayers to be proactive.
“If we see a problem that is not intended based on the stated purpose of the law, I think concerned constituents should engage with Wyden and his staff. I think it’s worth getting involved now rather than later,” he said. “With a Democrat in the White House and control of both chambers in 2029, we may see swift movement toward a reconciliation bill that goes in the opposite direction of OBBBA and TCJA.”
