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Most people do not owe a new federal tax simply because an investment or home rose in value. The Biden administration’s unrealized-gains proposals described here targeted taxpayers with wealth above roughly $100 million; they were proposals, not a general tax currently owed. The $100 million figure is a wealth threshold—not the amount of gain taxed. Current law does have narrow mark-to-market rules for certain contracts, so it is not accurate to say unrealized gains are never taxed.
What an unrealized-gains tax would do
Under the usual realization-based approach, a capital gain generally enters the tax calculation when it is realized, such as when an asset is sold. A mark-to-market approach instead periodically values covered assets and recognizes qualifying increases before sale. The Congressional Research Service (CRS) explains that a gain recognized this way is added to the asset’s basis, affecting the calculation of a later gain or loss.
“Tax on unrealized gains” can refer to different designs, not one settled rule. A proposal might use an annual mark-to-market system for publicly traded assets, a minimum tax that includes unrealized gains, or a deferral-and-interest system for assets that are difficult to value or sell. These mechanisms have different tax bases, payment timing, and consequences. CRS, Mark-to-Market Taxation of Capital Gains, discusses these choices.
What the $100 million figure means
In the proposals at issue, $100 million refers to taxpayer wealth, not taxable gain and not tax due. A person with $100 million in wealth might have very different amounts of unrealized appreciation, other income, prior tax payments, and assets that qualify under a particular proposal. The threshold alone cannot determine a bill.
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| Figure or quantity | What it represents |
|---|---|
| Total wealth | The value of a taxpayer’s assets under the proposal’s rules; the cited versions use a high-wealth threshold around $100 million. |
| Unrealized gain | The appreciation in covered assets that has not yet been recognized through a realization event. |
| Tax under a proposal | A result of the proposal’s income definition, minimum-tax calculation, previous payments, credits, deferrals, and other rules—not a fixed percentage of total wealth. |
The cited official materials do not provide a complete tax calculation for someone with exactly $100 million in wealth. Applying a headline rate directly to $100 million would therefore confuse the threshold, the tax base, and the eventual payment.
Why you may see either 20% or 25%
The figures describe different versions and should not be blended into one timeless rate.
| Version | Rate and threshold described | How to read it |
|---|---|---|
| Treasury Assistant Secretary Lily Batchelder’s remarks | At least 20% of income, including unrealized gains, for taxpayers with wealth greater than $100 million. | This is the version in Batchelder’s Treasury remarks. U.S. Treasury remarks by Lily Batchelder. |
| FY2025 budget proposal described by Treasury Secretary Janet Yellen | 25% minimum tax on total income, including unrealized gains, for taxpayers with more than $100 million in wealth. | This is Yellen’s description in the FY2025 budget hearing transcript. U.S. Government Publishing Office hearing transcript. |
Neither rate means that the government would automatically take 20% or 25% of a person’s total wealth. Each is described as a minimum-tax rate applied to a defined income measure under that proposal.
Why public and private assets pose different problems
Publicly traded shares have observable market prices, which makes periodic valuation more straightforward. A private company, real estate, or another nonpublic asset may have no frequent arm’s-length sale price. It can also be hard for an owner to pay a tax tied to appreciation without selling part of the asset.
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In Batchelder’s Treasury remarks on the 20% version, she described a deferral option for unrealized gains on nontradeable assets, with an interest charge, and credits when an asset is later sold. She also described valuation rules intended to use measures taxpayers may already have. Those details belong to that version; they should not be assumed to apply identically to the FY2025 proposal or any other bill.
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When should you be concerned?
For an ordinary investor or homeowner, an asset’s appreciation alone is not a reason to assume this proposed high-wealth minimum tax applies. First distinguish a proposal from an enacted tax rule, then check whether a specific current-law provision applies to the type of asset and transaction involved.
- If you are tracking a proposed broad minimum tax: the cited Biden administration versions focused on people above a very high wealth threshold, not every person whose portfolio or property increased in value.
- If you hold covered section 1256 contracts: a specific current-law mark-to-market rule may apply at year end. The statute treats each covered contract held then as sold at fair market value for tax purposes. See 26 U.S.C. §1256.
- If you own complex private assets or have wealth near a proposal’s threshold: the asset definitions, valuation rules, and final legal status matter. A tax professional can assess your actual circumstances; the proposal headline alone cannot establish a liability.
Are these proposals current law?
The broad Biden-style minimum tax described above is not shown as enacted law by the cited sources. In her FY2025 budget hearing testimony, Yellen described a budget proposal. A separate 2026 bill, S.4246, was introduced and referred to the Senate Finance Committee on March 26, 2026; its stated subject is a tax on net asset value. That is a distinct wealth-tax approach, and the recorded introduction and referral do not establish enactment. Check the bill’s current status before relying on it: Congress.gov, S.4246.
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Constitutional questions about a broad tax on unrealized gains are disputed and design-specific. Congress.gov’s Constitution Annotated discussion of direct taxes and the Sixteenth Amendment surveys historical doctrine; it does not establish that the Supreme Court has definitively approved or barred every modern version.
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