Who Is Writing the Next Estate Tax Bill? A Watchlist

Short answer. Ron Wyden and Richard Neal, who take the gavels at Senate Finance and House Ways and Means in January 2027, and the senators whose bills are already drafted: Patty Murray (Fair Trusts for Fiscal Responsibility Act, S. 4490), Chris Van Hollen (S. 4196 and the STEP Act), Elizabeth Warren (Ultra-Millionaire Tax Act), and Bernie Sanders (For the 99.5 Percent Act). None of it becomes law before 2029. 2027 and 2028 are the drafting years, and the drafting happens in public.

Jurisdiction: Federal; California
Bills Tracked: S. 2845 / H.R. 5427 (Billionaires Income Tax Act); S. 4287 (GRATS Act); S. 4279 (Protecting Proper Life Insurance from Abuse Act); S. 4490 (Fair Trusts for Fiscal Responsibility Act); S. 4196 (Strengthen Social Security by Taxing Dynastic Wealth Act); S. 3956 / H.R. 7767 (Make Billionaires Pay Their Fair Share Act); H.R. 8085 (Ultra-Millionaire Tax Act of 2026); H.R. 2912 (Oligarch Act of 2025); S. 587 / H.R. 1301 (Death Tax Repeal Act of 2025); Cal. Props. 40 and 42 (Nov. 2026)
Primary Statutes: I.R.C. §§ 68, 170, 664, 671–679, 1014, 1015, 2001, 2010(c), 2032A, 2036, 2503(b), 2601–2664, 2702, 2704, 4966, 7520, 7702; Cal. Prob. Code §§ 19501–19530, 21205; Cal. Rev. & Tax. Code § 13301
Last Reviewed: November 8, 2026 — next scheduled review January 2027
Category: Legislative Watch — Transfer Tax — Charitable Planning

Review log. This page is re-checked every two months, or sooner when a bill moves. Each review updates the status column of the watchlist and adds a line here.

• November 8, 2026 — First publication, five days after the midterm election. California proposition margins reflect the November 7 count and will be updated when certified. Facts checked against primary sources by an independent review on the publication date.

Executive Summary

On November 3, 2026, Democrats won control of both chambers of Congress. The people on this page stop being the authors of marker bills and start chairing the committees that write tax law: Ron Wyden at Senate Finance, Richard Neal at House Ways and Means. President Trump holds the veto through January 2029, so none of these proposals becomes law before then. What happens in 2027 and 2028 is the drafting: hearings, committee bills, and the platform of the 2028 Democratic nominee. The bill that could pass in 2029 will be written in the open over the next two years. A client who reads it as it is written has time to decide what, if anything, to do.

The list below is Democratic because the pressure for change is. The One Big Beautiful Bill Act of July 2025 set the estate, gift, and GST exemption at $15 million per person, indexed, with no sunset. The Republican agenda beyond that is repeal: the Death Tax Repeal Act of 2025 was introduced with 45 Senate and 174 House cosponsors, now 46 and more than 180, and it would also preserve the basis step-up. Every proposal that would narrow an exemption, tax unrealized gains, restrict a trust technique, or change the charitable deduction comes from the other side of the aisle. That is a statement about where the bills are, not about who is right.

Two results from the same election set the terms for California clients. Proposition 40, the one-time 5% tax on billionaires’ net worth, failed with roughly 53% voting no as of the November 7 count. Proposition 42 passed with about 52% voting yes, ballots still being counted; it amends the state constitution to prohibit new state taxes on the ownership of financial assets and other personal property and voids conflicting taxes enacted or taking effect on or after January 1, 2026. A later ballot measure could undo it. Until one does, the state wealth-tax route is closed, and its architects have said so: Gabriel Zucman conceded on November 4 and announced he would pursue the tax through Congress instead, and SEIU-UHW’s Dave Regan said the union may return to voters in 2028.

The most consequential new item on the list is not a wealth tax. It is the Fair Trusts for Fiscal Responsibility Act (S. 4490), introduced May 12, 2026 by Patty Murray with Wyden, Chris Van Hollen, Cory Booker, and Angela Alsobrooks. It would impose an annual withholding tax of 1% to 3% on the assets of large irrevocable trusts, above an exemption of at most $50 million per beneficiary, creditable against the estate tax eventually owed; a separate section of the same bill would treat a grantor’s payment of any irrevocable grantor trust’s income tax as a taxable gift, with no size threshold and no grandfathering. It is the legislative form of a 2026 University of Pennsylvania Law Review article by Brian Galle, David Gamage, and Bob Lord, and it is the first bill in decades aimed at dynasty trusts as such rather than at the techniques used to fund them.

A client who wants an existing plan, or a new one, checked against this list can schedule a review; the section before the sources describes what the review covers.

Which Tax Rules Would These Proposals Change?

Every proposal on this page targets one of a dozen rules in current law. The rules are stated here as they stand on the review date, with the lever each proposal would pull. Readers who know them can skip to the next section.

The exemption and the rate (L1). Each person can transfer $15,000,000 in 2026 free of federal estate, gift, and generation-skipping transfer tax. I.R.C. § 2010(c), as amended by the One Big Beautiful Bill Act, Pub. L. 119-21, § 70106; Rev. Proc. 2025-32. The figure is indexed for inflation from 2027 and has no sunset. Transfers above it are taxed at 40%. § 2001(c). A surviving spouse adds the deceased spouse’s unused estate and gift exemption by electing portability on a timely Form 706, § 2010(c)(4)–(5); the GST exemption is not portable. Exemption used by gift before a later reduction is not clawed back at death. Treas. Reg. § 20.2010-1(c).

The annual exclusion (L1). Gifts of up to $19,000 per recipient in 2026 use no exemption and require no return, provided the recipient gets a present interest. § 2503(b); Rev. Proc. 2025-32. A gift in trust qualifies only through a withdrawal right, the Crummey power. The Sanders bill would cap annual-exclusion gifts in trust.

Basis step-up at death; carryover basis for gifts (L2). Property acquired from a decedent takes a basis equal to its fair market value at death, up or down, so gain accrued during life is never income-taxed. § 1014(a). For California community property, both halves step up at the first spouse’s death. § 1014(b)(6). Property received by gift keeps the donor’s basis. § 1015(a). The realization proposals, the STEP Act and the Greenbook, would treat death and gift as sales.

Grantor trusts (L3). A trust whose grantor keeps one of the powers listed in §§ 673–677 is disregarded for income tax: the grantor pays the tax on the trust’s income although the assets sit outside the grantor’s estate. The grantor’s payment of that tax is not a gift to the beneficiaries. Rev. Rul. 2004-64. A sale between the grantor and the trust is not a taxable event. Rev. Rul. 85-13. Assets in such a trust get no § 1014 step-up at the grantor’s death unless they are included in the estate. Rev. Rul. 2023-2. The intentionally defective grantor trust (IDGT), the spousal lifetime access trust (SLAT), and the irrevocable life insurance trust (ILIT) rest on these rules.

Grantor retained annuity trusts (L4). The grantor transfers assets to a trust and keeps a fixed annuity for a term of years; the taxable gift is the value transferred minus the present value of the annuity at the § 7520 rate. § 2702. An annuity set to return the full value plus the § 7520 rate produces a gift near zero, the “zeroed-out” GRAT approved in Walton v. Commissioner, 115 T.C. 589 (2000), and growth above that rate passes to the remainder beneficiaries free of gift tax. If the grantor dies during the term, the trust property needed to fund the annuity, usually all of it, returns to the estate. § 2036; Treas. Reg. § 20.2036-1(c)(2). Current law sets no minimum term and no minimum remainder.

The § 7520 rate. The rate used to value annuities, life estates, and remainders in every split-interest transfer on this page, GRATs and charitable remainder trusts included. It is 120% of the federal midterm rate and is published monthly. § 7520(a).

Generation-skipping transfer tax and dynasty trusts (L5). Transfers to grandchildren or more remote descendants, outright or in trust, are taxed at the top estate tax rate, 40%, on top of any estate or gift tax. §§ 2601, 2641. Each person has a GST exemption equal to the basic exclusion amount, $15,000,000 in 2026. § 2631(c). Once the exemption is allocated to a trust, the trust is exempt for as long as it lasts. California requires trust interests to vest within lives in being plus 21 years or within 90 years, Cal. Prob. Code § 21205; South Dakota, Nevada, Delaware, and other states permit perpetual trusts, which is where dynasty trusts are sited. The Fair Trusts Act taxes these trusts annually; the Sanders bill and the Greenbook limit the exemption to about two generations.

Valuation discounts (L6). Property is valued at the price a willing buyer would pay a willing seller. Treas. Reg. § 20.2031-1(b). A minority interest in a family LLC or partnership is worth less than its share of the underlying assets because the holder cannot control or readily sell it, and appraisers apply discounts for lack of control and lack of marketability. § 2704 limits the discounts attributable to lapsing rights and certain restrictions. Treasury’s 2016 proposed regulations under § 2704, which would have curtailed family-entity discounts, were withdrawn in 2017.

Realization, the capital gains rate, and the constitutional question (L7). The income tax reaches a gain only when it is realized, usually by sale. §§ 61, 1001. Realized long-term gains are taxed federally at up to 20% plus the 3.8% net investment income tax, §§ 1(h), 1411, and in California as ordinary income at up to 13.3%. A wealth tax taxes net worth without any sale; a mark-to-market tax taxes the year’s unrealized gain; a minimum tax on economic income does the same above a floor. Whether Congress may tax unrealized gain without apportioning the tax among the states, U.S. Const. art. I, § 2, cl. 3 and § 9, cl. 4, was left open in Moore v. United States, 602 U.S. 572 (2024).

The charitable deduction and split-interest trusts (L8). A gift of appreciated long-term property to a public charity is deductible at fair market value up to 30% of adjusted gross income, with a five-year carryforward. § 170(b)(1)(C), (d). From 2026, itemized charitable deductions are allowed only above a floor of 0.5% of adjusted gross income, and a top-bracket taxpayer’s itemized deductions are worth 35 cents, not 37, on the dollar. § 170(b)(1) and § 68, as amended by Pub. L. 119-21. A charitable remainder unitrust pays its income beneficiaries a fixed percentage of 5% to 50% of the trust’s value, revalued each year, for life or for a term of up to 20 years, then passes what remains to charity. § 664(d)(2). The trust pays no income tax, so an appreciated asset sold inside it is not taxed at sale, § 664(c), and each distribution carries the trust’s income out to the beneficiaries in a fixed order. § 664(b). The donor takes an immediate income tax deduction for the calculated remainder value, which must be at least 10% of the value contributed. § 664(d)(2)(D). A donor-advised fund produces a deduction when funded and has no payout requirement, § 4966; a private foundation must distribute 5% of its assets each year. § 4942.

Private placement life insurance (L9). Investment growth inside a contract that qualifies as life insurance under § 7702 is not taxed as it accrues, § 72(e), and the death benefit is excluded from income. § 101(a). A private placement contract applies those rules to a separate account invested in hedge funds or other alternatives, subject to the diversification rules of § 817(h) and the investor-control doctrine of Rev. Rul. 2003-91. The Wyden bill would deny these contracts insurance treatment.

State transfer taxes (L10). California has no estate, inheritance, or gift tax. Proposition 6 of June 1982, an initiative statute, repealed them and bars the Legislature from reimposing a tax by reason of death without a vote of the people, Cal. Rev. & Tax. Code § 13301, which is why Senator Scott Wiener’s 2019 estate tax bill, SB 378, was drafted as a ballot measure. Proposition 42, approved in November 2026, adds a constitutional bar on new state taxes on the ownership of financial assets and other personal property. Washington taxes estates above $3,000,000 at rates up to 20% for deaths on or after July 1, 2026. New York’s exemption is $7,350,000 for 2026, and an estate more than 5% above it loses the exemption entirely.

How the List Is Built

A name appears here only if two conditions are met. First, the person has a written proposal with specific trust-and-estate mechanics: a bill, a Treasury Greenbook entry they authored, a paper with numbers and Code sections, or a platform plank with a threshold and a rate. Second, the person has a channel to enact it: a committee gavel, a seat on a tax-writing committee, a pipeline into Treasury or committee staff, a ballot-initiative sponsor, or a presidential candidacy. Commentators without a proposal and proposals without a sponsor are left out.

The narrative is organized by influence, in three tiers: people who can move a bill in the 120th Congress; people who write the ideas those bills contain; and people who will shape the 2028 platform. A fourth section covers the states, and a fifth covers the charitable thread, which is where this practice lives.

Each proposal is tagged to one or more of ten levers. The tags recur in the watchlist table and in the closing section on what a client does now.

Tier One: The People Who Hold the Pen in 2027

Ron Wyden returns as chairman of Senate Finance. His record is the broadest on this list, and all of it is current. The Billionaires Income Tax Act (S. 2845, introduced September 17, 2025 with 20 Senate cosponsors and a House companion, H.R. 5427, from Steve Cohen and Don Beyer) imposes annual mark-to-market taxation on tradable assets for taxpayers with more than $1 billion in assets or more than $100 million of income for three consecutive years, with a deferral charge on non-tradable assets and an end to the basis step-up at death for those taxpayers. The Getting Rid of Abusive Trust Schemes Act (S. 4287, reintroduced April 14, 2026 with Angus King) would require every GRAT to run at least 15 years and no longer than the annuitant’s life expectancy plus ten, forbid decreasing annuities, set a minimum remainder for gift tax purposes equal to the greater of 25% of the contributed value or $500,000, treat transfers between a grantor trust and its deemed owner as sales, and treat the grantor’s payment of the trust’s income tax as a gift unless the trust reimburses it. The Protecting Proper Life Insurance from Abuse Act (S. 4279, April 13, 2026) adds a new § 7702C under which an “applicable private placement contract” is not life insurance or an annuity for federal tax purposes; existing policies would have 180 days to convert. Wyden also co-leads the Fair Trusts Act. He said in July 2026 that it was time for his Billionaires Income Tax; as chairman he decides whether it gets a markup.

Richard Neal returns as chairman of Ways and Means. His September 2021 committee bill is the template for what a Democratic House can produce: inclusion of grantor-trust assets in the grantor’s estate, distributions from grantor trusts treated as gifts, sales to grantor trusts recognized for income tax, valuation discounts eliminated for nonbusiness assets, and the exemption cut to $5 million indexed. Every one of those provisions was stripped on October 28, 2021 before the House voted. In May 2026, Politico reported that he was preparing to retake the gavel and described House Democrats’ priorities as health subsidies, energy credits, expired extenders, IRS oversight, and refocusing attention on how much the wealthy pay; neither he nor the report offered a transfer-tax plank. The provisions were stripped under his chairmanship, in the leadership deal that produced the October 28 framework. Whether he writes them again is the single most important open question on this page.

Patty Murray is the new name. The Fair Trusts for Fiscal Responsibility Act (S. 4490) would impose an annual withholding tax on large irrevocable trusts: 1% on assets between $50 million and $100 million, 1.5% between $100 million and $250 million, 2% between $250 million and $1 billion, and 3% above $1 billion. The $50 million figure is a ceiling, not a floor: each beneficiary has one $50 million bracket amount, allocated by default pro rata across every covered trust in which that beneficiary holds an interest, and a trust’s own threshold is the lowest allocation among its beneficiaries, so a trust can be taxed well below $50 million when its beneficiaries hold interests in several trusts. The withholding is a prepayment, creditable against the estate and GST tax eventually due and refundable to the extent it exceeds that tax. The exclusion covers wholly charitable trusts, meaning trusts that can make distributions only to § 2055(a) organizations, and § 401(a) qualified plan trusts. A charitable remainder trust with living income beneficiaries is not within it, and nothing in the bill subtracts the charity’s remainder from the trust’s taxable value: the base is the net value of all trust assets less qualified debt, and the charity, as an exempt beneficiary, receives no share of the $50 million allocation. Covered trusts would value their assets annually and report. The trust tax applies to calendar years after 2026 with no grandfathering of existing trusts. Section 4 of the bill reaches far below $50 million: a new § 2503(d) would treat a grantor’s payment of an irrevocable grantor trust’s income tax as a taxable gift unless the trust reimburses it within the year, effective for amounts paid after enactment, for every such trust regardless of size or creation date. The sponsors project $675 billion over ten years. Murray is the Senate’s senior appropriator, not a Finance member, which is why Wyden’s co-sponsorship matters.

Chris Van Hollen has two bills on the list and appears on a third. The Strengthen Social Security by Taxing Dynastic Wealth Act (S. 4196, reintroduced in late March 2026) sets the estate exemption at $3.5 million per person ($7 million per couple), caps the lifetime gift exemption at $1 million, raises the top rate to 45%, and routes the revenue to the Social Security Trust Fund. The Sensible Taxation and Equity Promotion (STEP) Act, circulated in 2021 as a discussion draft with Booker, Sanders, Whitehouse, and Warren, treats a transfer by gift, at death, or to a non-grantor trust as a sale; a transfer between a grantor and the grantor’s own grantor trust is not a sale, but the trust’s property is deemed sold when the grantor dies or stops being its owner. The exclusion is $1 million at death, of which only $100,000 may be used for lifetime gifts, and non-grantor trusts recognize their gain every 21 years. He is a cosponsor of the Fair Trusts Act. Axios named him in March 2026 among potential 2028 contenders who have endorsed wealth taxes.

Elizabeth Warren sits on Finance. The Ultra-Millionaire Tax Act of 2026 (S. 4246, introduced March 26, 2026; H.R. 8085, introduced March 25 by Pramila Jayapal with Brendan Boyle) imposes 2% annually on the net worth of households and trusts between $50 million and $1 billion and 3% above $1 billion, rising to 6% if universal health coverage legislation is in effect, with a 40% exit tax on expatriation and a 30% audit mandate. The House text answers a question that matters here: it excludes the present value of a charitable remainder interest from net worth, attributes the income interest in a charitable remainder trust to the beneficiaries who hold it, and attributes grantor-trust property to the grantor. The sponsors cite a $6.2 trillion ten-year estimate. Her March 2023 letter to Treasury with Van Hollen, Sanders, and Whitehouse asked for regulations requiring a minimum GRAT remainder, confirming no basis step-up for assets in an irrevocable grantor trust outside the estate, and reissuing valuation rules for family entities; Revenue Ruling 2023-2, denying the step-up, followed nine days later.

Bernie Sanders carries the estate-tax bill with the most specific mechanics. The For the 99.5 Percent Act, last introduced in April 2023 as S. 1178, sets the exemption at $3.5 million, the gift exemption at $1 million, and rates of 45% above $3.5 million, 50% above $10 million, 55% above $50 million, and 65% above $1 billion; it imposes a 10-year minimum GRAT term with a 25%-or-$500,000 remainder floor, includes grantor-trust assets in the estate, denies GST exemption for transfers to anyone more than two generations below the transferor unless born before the trust was created (the 2021 version used a 50-year limit instead), and restricts valuation discounts and the annual exclusion for gifts in trust. In March 2026 he and Ro Khanna introduced the Make Billionaires Pay Their Fair Share Act (S. 3956 / H.R. 7767), a 5% annual tax on the entire net worth of any individual or trust whose net assets exceed $1 billion, not only on the excess; Emmanuel Saez and Gabriel Zucman score it at $4.4 trillion over ten years, with the revenue funding $3,000 payments to every person in households with income of $150,000 or less.

Sheldon Whitehouse, a Finance member who chaired the Budget Committee from 2023 to 2025, was an original cosponsor of the 2021 version of the 99.5 Percent Act and of the STEP Act and co-unveiled the Billionaires Income Tax Act. Jeff Merkley, the ranking Democrat on Budget and its presumptive chairman, cosponsors both the Billionaires Income Tax Act and the Ultra-Millionaire Tax Act; he would write the reconciliation instructions that any 2029 tax bill would travel under.

Don Beyer and Brendan Boyle are the House tax-writers to watch. Beyer, on Ways and Means, co-leads with Steve Cohen both the House Billionaires Income Tax Act and the Billionaire Minimum Income Tax Act, a 25% minimum rate on the full economic income, including unrealized gains, of households worth more than $100 million; Cohen is the sponsor of record on each. Boyle, the ranking Democrat on Budget and presumptive chairman, is the House co-lead on the Ultra-Millionaire Tax Act. Summer Lee’s Oligarch Act of 2025 (H.R. 2912, April 14, 2025) is the most aggressive design in Congress: a wealth tax of 2%, 4%, 6%, and 8% on wealth above 1,000, 10,000, 100,000, and 1,000,000 times median household wealth, with a 30% audit mandate. Ro Khanna is covered under the 2028 tier. Angus King, the Maine independent who caucuses with Democrats, is the co-author of the GRATS Act and, with Chuck Grassley, of the 2021 Accelerating Charitable Efforts Act on donor-advised funds.

Jimmy Panetta is the local counterweight. His 19th District includes northern San Luis Obispo County, Paso Robles among its cities. He sits on Ways and Means and Budget. His transfer-tax record runs the other way from the rest of this tier: the Preserving Family Farms Act, which he has introduced in three Congresses, most recently as H.R. 4937 in 2023 with Mike Kelly, would raise the § 2032A special-use valuation cap from its statutory base of $750,000 (indexed) to $13 million; the 2021 version used $11.7 million. In 2025 he cosponsored H.R. 2891, which would allow qualified charitable distributions from IRAs to donor-advised funds. A Democratic Ways and Means majority includes members whose estate-tax activity is relief, not restriction.

Tier Two: The People Who Write the Ideas

Lily Batchelder ran the Office of Tax Policy at Treasury from 2021 to 2024, the office that wrote the Greenbook proposals that are still the most complete Democratic transfer-tax package in print. The FY2025 Greenbook (March 11, 2024) would treat transfers by gift or at death as realization events with a $5 million per-person exclusion, portable between spouses; exempt transfers to a spouse or to charity; tax the non-charitable share of a transfer to a split-interest trust; impose a 10-year minimum GRAT term with the 25%-or-$500,000 remainder floor and no tax-free swaps; treat the grantor’s payment of a grantor trust’s income tax as a gift; recognize gain on sales to grantor trusts; limit the GST exemption to roughly two generations; and value partial interests in family-held property pro rata when the family holds 25% or more. Her own proposal, from a 2020 Hamilton Project paper, goes further: repeal the estate tax and tax inheritances above a lifetime exemption as ordinary income to the heir, subject to both income and payroll tax, with gains realized on transfer. She is back at NYU.

Ray Madoff has moved from donor-advised funds to the estate tax itself. Her 2025 book The Second Estate proposes repealing the estate tax, taxing inheritances above $1 million as income to the heir, and taxing capital gains when assets are transferred by gift or at death. Her earlier work produced the Initiative to Accelerate Charitable Giving with John Arnold and, from it, the King–Grassley ACE Act of 2021: a 15-year payout window for donor-advised funds in exchange for the upfront deduction, and private-foundation payout rules that exclude family salaries and DAF contributions. In a January 2026 interview she restated two proposals: mandatory distribution deadlines for foundations and DAFs, and caps on the tax benefits available to high-income taxpayers.

Roger Colinvaux is Madoff’s co-author and the most persistent academic voice on charitable intermediaries. His 2022 Boston College Law Review article argues that the ACE Act should apply to existing DAF accounts, and his 2019 proposal with Madoff would defer the charitable deduction for a DAF contribution until the money leaves the fund for an operating charity.

Brian Galle, David Gamage, and Bob Lord wrote Taxing Dynasties (174 U. Pa. L. Rev., 2026), which estimates that at least $4.5 trillion of family wealth sits in trusts that the GST tax will never reach and proposes an annual withholding of one to two percent on dynasty trusts as a prepayment of transfer tax. The paper thanks Senator Murray’s office; the Fair Trusts Act is its bill. Lord practiced tax law for nearly forty years before joining Americans for Tax Fairness and then Patriotic Millionaires, where he is senior vice president for tax policy; his 2021 papers with Daniel Hemel, Closing Gaps in the Estate and Gift Tax Base and Revitalizing the Generation-Skipping Transfer Tax, proposed repealing § 2702(b)(1), the provision that makes zeroed-out GRATs possible, and treating IDGTs as non-grantor trusts for income tax. Galle, with Gamage and Darien Shanske, also designed the ULTRA method (Duke Law Journal, 2023), under which a taxpayer who cannot value an asset pays wealth tax with a notional equity interest in it; Gamage and Ari Glogower designed the “wealth integration” approaches, which use wealth as a factor in computing income tax so that the levy can survive a direct-tax challenge.

Daniel Hemel, now at NYU, is the technician behind the grantor-trust and GRAT provisions. Beyond the papers with Lord, his 2022 letter to the Ways and Means Oversight Subcommittee chairman called Revenue Ruling 85-13, the ruling that lets a grantor sell assets to a grantor trust without recognizing gain, disastrous, and argued that the IRS could begin the reform itself.

Emmanuel Saez and Gabriel Zucman designed Proposition 40 and scored the Sanders–Khanna bill. Zucman’s post-election statement that Congress is now the venue, and that a Trump veto would still “pave the way for a 2028 billionaire tax,” is the clearest statement of the two-year strategy on this page.

William Gale and John Sabelhaus at Brookings are the centrist voice. Taxing the Great Wealth Transfer (December 2024, with Oliver Hall; restated in the Milken Institute Review in 2025 and in an EconoFact explainer in May 2026) frames the basis step-up as the point where gains escape the income tax entirely and argues for converting the estate tax to an inheritance tax or taxing unrealized gains at death. When a Democratic Treasury wants a proposal it can describe as moderate, this is where it will look.

Chuck Collins, Helen Flannery, and Bella DeVaan run the Charity Reform Initiative at the Institute for Policy Studies. Their Gilded Giving series, now in a 2026 edition subtitled Philanthropy Under Oligarchy, supplies the data behind DAF payout and foundation payout proposals and the dynasty-trust reports behind Van Hollen’s and Warren’s bills; during the Prop 40 campaign the group tracked the 22 billionaires funding the opposition.

Rob Reich of Stanford supplies the normative case against the charitable deduction as structured: replace it with a universal credit so that a high-bracket donor’s gift is not subsidized more heavily than anyone else’s, and end foundation perpetuity. He has spoken at the Boston College Forum on Philanthropy’s reform conventions, which Madoff convenes.

Goldburn Maynard Jr. (UConn, where he teaches estate and gift taxation) and Dorothy Brown (Georgetown) supply the racial-wealth-gap framing that now appears in the preamble of every Democratic wealth-tax bill; the Ultra-Millionaire Tax Act’s own press release describes the bill as narrowing that gap. Brown’s concrete proposal is a refundable wealth tax credit measured by household wealth. Neither has proposed transfer-tax mechanics, but the framing decides which arguments a 2027 hearing hears first.

Tier Three: The 2028 Platform

The 2028 Democratic field has not published tax platforms. What exists is a record on one question, the wealth tax, which the left is working to make a litmus test: Axios reported in March 2026 that activists were pressing prospective candidates to embrace one and that Alexandria Ocasio-Cortez, Van Hollen, and Khanna had done so.

Gavin Newsom opposed Proposition 40 from the week it was filed in October 2025, called it damaging to the state, and endorsed Proposition 42 on October 9, 2026. On June 26, 2026, the day after SEIU-UHW let the June 25 withdrawal deadline pass and sent the measure to the ballot, he published a Substack post proposing a federal minimum tax on people worth more than $100 million, a return to pre-2017 corporate rates, a national public equity fund, and a rewrite of inheritance rules, which he said otherwise risk “a permanent American aristocracy of inherited wealth.” He gave no mechanics. Khanna’s response, at a press conference the same day, was that taxing loans against assets would raise about $100 billion and did not qualify as a billionaire tax. The two Californians have staked out the poles of the intraparty argument, and both intend to run.

Ro Khanna is the House sponsor of the Sanders bill and the most prominent elected supporter of Prop 40. The bill itself contains no liquidity relief beyond a valuation election; Khanna’s own answer to the founder problem, offered in August 2026 during his exchange with Mark Cuban over Prop 40, was a government loan secured by pledged shares, repaid over roughly ten years or settled by surrendering the shares. Whether that idea reaches bill text is the detail a Silicon Valley client should watch.

Chris Murphy traveled to Los Angeles on March 28, 2026 to campaign for the measure that became Prop 40, before it had qualified. Cory Booker cosponsored the STEP Act in 2021 and the Fair Trusts Act in 2026 and ran in 2020 on ending the step-up. Ocasio-Cortez has endorsed wealth taxes and holds no tax-writing seat. The governors most often named for 2028 have not taken positions on transfer taxes that this review could find; that absence is itself a data point, and it is the item most likely to change at the next review.

Two organizers belong here. Dave Regan of SEIU-UHW, who wrote and funded Prop 40, has said the union will try again in 2028 if the legislature does not address health-care funding: “That’s not a hypothetical. That’s our plan.” Igor Volsky of Tax the Greedy Billionaires is running the campaign to make wealth taxation a primary-season test, including a digital ad buy against Newsom.

The States: California, Washington, New York, Vermont

California. Proposition 40 would have taxed the net worth of roughly 200 residents at 5%, once, as of January 1, 2026, and would have followed those who moved. It lost after a campaign in which the opposition raised about $317 million across Props 40, 41, and 42, roughly a third of it from Sergey Brin. Proposition 42 won. Its text bars new state taxes on the ownership of financial assets, business interests, and other personal property and voids conflicting taxes enacted or taking effect on or after January 1, 2026, and because it is a constitutional amendment, only another statewide vote can reverse it. Assemblymember Alex Lee’s recurring wealth-tax bill, last filed as AB 259 in 2023, is foreclosed on the same terms. The Democratic coalition split: the state party endorsed Prop 40 after a contested executive-board vote on August 2, 2026, and the California Federation of Labor Unions, the Nurses Association, and the Federation of Teachers followed; Newsom, the California Teachers Association, Planned Parenthood’s state affiliate, and the building trades opposed it, and Xavier Becerra, elected governor on the same ballot, opposed it as well.

Washington. In 2025 the legislature raised the top estate tax rate from 20% to 35% on estates above $9 million and lifted the exemption to $3 million. In March 2026 it reversed the rate increase: Senate Bill 6347 returns the top rate to 20% for deaths on or after July 1, 2026, and fixes the exemption at a flat $3 million, ending the inflation indexing adopted a year earlier. In the same session it enacted Senate Bill 6346, a 9.9% tax on household income above $1 million beginning in 2028, and on November 3 voters rejected Initiative 645, the repeal measure, by 58% to 42%. The sequence is instructive: a Democratic trifecta pulled back the estate tax rate within a year and kept the income surtax. State Senator Jamie Pedersen of Seattle wrote the income tax.

New York. S. 165 / A. 3632, the Billionaire Mark-to-Market Tax Act sponsored by Senator Jessica Ramos with 23 Senate cosponsors, would require residents with net assets of $1 billion or more to recognize gain as if all assets were sold at year-end, annually. It sits in the Budget and Revenue Committee.

Vermont. The House Ways and Means Committee circulated Taxing Dynasties as a committee document for its trusts workgroup on April 14, 2026, a sign that at least one state is studying an annual trust tax of its own.

What Happens to a Charitable Remainder Trust Under Each Proposal?

This practice drafts charitable remainder trusts, so the question for each proposal above is specific: what happens to a CRUT funded with appreciated stock?

The proposal that would change the most is the Greenbook’s realization rule. Under it, a transfer of appreciated property to a split-interest trust is a taxable event for the donor, with gain excluded only to the extent of the charity’s share of the value transferred. A donor who funds a CRUT with $5 million of stock carrying a $500,000 basis, where the calculated remainder value is 30%, would have a recognition event on 70% of the $4.5 million gain, $3.15 million, in the year of funding, sheltered only by whatever remains of the proposal’s $5 million per-person lifetime exclusion; a donor who had used that exclusion on earlier gifts would pay tax on the full $3.15 million. The immediate income tax deduction for the calculated remainder value would survive; the deferral of gain on the income interest, which is the economic engine of the technique, would not. The STEP Act treats a transfer to any non-grantor trust as a sale and excepts “charitable trusts” without saying whether a split-interest trust qualifies; whether a CRUT sits inside that exception is the first question to put to any bill text that follows the draft. Batchelder’s inheritance-tax design realizes gain on transfer as well. Van Hollen, who holds both the STEP Act and a seat at the table in 2027, is the person to watch on this lever.

The Fair Trusts Act does not exclude charitable remainder trusts. Its exclusion is limited to trusts that can distribute only to § 2055(a) charities and to § 401(a) qualified plan trusts; a CRUT with living income beneficiaries is a covered trust, valued at the net value of all its assets with no subtraction for the charity’s remainder, and the charity, as an exempt beneficiary, takes no share of the $50 million allocation, so the CRUT’s threshold is whatever its income beneficiaries allocate to it. A large CRUT whose income beneficiaries also hold interests in other large trusts could owe the annual withholding on its full value. The Ultra-Millionaire Tax Act is explicit in the other direction: the House text excludes the present value of the charitable remainder interest from net worth and attributes the income interest to the beneficiaries who hold it, so a CRUT’s remainder is outside the wealth-tax base and its income interest is counted against the beneficiary, not the grantor. The Sanders–Khanna bill and the Oligarch Act leave trust attribution undefined.

The deduction itself is the other exposure. Reich’s proposal to replace the charitable deduction with a universal credit would convert the immediate income tax deduction for the calculated remainder value, worth up to 35 cents on the dollar to a top-bracket donor under the 2026 rules, into a flat-rate credit worth the same to every donor; a credit rate set below the top bracket, which is the point of the proposal, reduces the benefit for the donors who fund most CRTs. Madoff’s and Colinvaux’s deferred-deduction design for donor-advised funds does not touch CRTs. Their argument against DAFs, that the deduction arrives before the charity benefits, is the same argument that can be made against a long-term CRT with a low payout, and a 2027 hearing on charitable intermediaries would be the place to hear it made.

Madoff’s estate-tax repeal would remove the estate-tax motive for testamentary charitable planning while leaving the income-tax function of a lifetime CRT intact. Treasury’s proposed § 4966 regulations on donor-advised funds, published in November 2023, remained unfinalized as of late May 2026, when the Council on Foundations asked Treasury to finish them.

The Watchlist: Who, What, Status, Levers, and Effect on Planning

Status reflects the record as of the review date. “Introduced” means the bill sits in committee with no hearing. Levers refer to the table above.

What a Client Does Now, Lever by Lever

Nothing on this page is law, and none of it will be law before 2029. The right response to most of it is to know the trigger, not to act. The triggers are: a hearing in either tax-writing committee on a specific lever; inclusion of a lever in the 2028 nominee’s platform; and, after January 2029, a bill with a committee markup date. Each entry below states what changes if the lever is pulled and what a prudent client does before then.

L1 Exemption and rates. The $15 million exemption is indexed and has no sunset. The Van Hollen and Sanders bills would set it at $3.5 million with a $1 million gift exemption, and a 2029 bill would most likely take effect the following January 1. A client whose estate is between $3.5 million and $15 million has no reason to make large gifts now and every reason to keep the plan flexible: disclaimer provisions, a bypass trust that can be funded or not, and portability elected at the first death. A client above $15 million who was going to use exemption anyway should use it on the ordinary schedule; the exemption used before a reduction is not clawed back under current regulations.

L2 Realization at death or gift. This is the lever with the widest reach, because it applies below the exemption. Every version on the list carries an exclusion ($1 million in STEP, of which only $100,000 may be used during life; $5 million in the Greenbook) and a residence exclusion. The planning consequence is the same one that governs now: hold low-basis assets until death, gift high-basis assets, and keep basis records current. No version has had a hearing in the Senate. Until one does, there is nothing to do.

L3 Grantor trusts. The effective dates differ by provision, and the differences are the exposure. The GRATS Act’s rule treating sales between a grantor and the trust as taxable applies to transfers after enactment whatever the trust’s age; its rule treating the grantor’s payment of the trust’s income tax as a gift applies only to trusts created after enactment; the Fair Trusts Act’s version of that same gift rule applies to payments after enactment for every irrevocable grantor trust, old or new. A grandfathered trust is one whose funding is protected, not one whose later sales, swaps, and tax payments are. A client who has decided to fund an IDGT, SLAT, or ILIT for reasons that hold under current law should fund it fully now rather than in stages, and should draft the reimbursement clause so the trustee can repay the grantor’s income tax if a gift rule arrives. A client who has not decided should not let this list decide for them. Revenue Ruling 2023-2 already denies the basis step-up to assets in an irrevocable grantor trust outside the estate; swaps of low-basis assets back into the estate remain available until a bill says otherwise.

L4 GRATs. A 15-year minimum term and a 25% minimum remainder end the rolling two-year GRAT. The bills apply to GRATs created after enactment. A client with a GRAT program should run it; a client considering one has at least two years in which the current rules apply.

L5 Dynasty trusts and GST. The Fair Trusts Act applies to existing trusts, not only new ones, from the first calendar year after enactment. That is the exposure. The $50 million figure is the most a beneficiary’s trusts can shelter in total, and each trust’s threshold is the lowest allocation among its beneficiaries, so a family with several large trusts for the same beneficiaries reaches the tax at lower trust values than the headline suggests. A client funding a GST-exempt trust now should expect the exemption to be honored and should expect annual valuation and reporting if the family’s trusts for any one beneficiary approach $50 million in aggregate.

L6 Valuation. The Greenbook’s pro-rata rule for family-held partial interests and Neal’s 2021 elimination of discounts for nonbusiness assets have no 2026 sponsor. Discount planning proceeds under current law; Treasury’s 2016 proposed § 2704 regulations, withdrawn in 2017, could return without Congress.

L7 Wealth, mark-to-market, and minimum taxes. Every federal version applies at $50 million or $100 million of net worth or $1 billion of assets. Below those thresholds, none of these bills applies. Above them, the open design questions are valuation of illiquid holdings, attribution of trust assets (the Ultra-Millionaire Tax Act answers it; the Sanders–Khanna bill and the Oligarch Act do not), and relief for founders holding illiquid stock; a client in that range should expect to be asked for annual valuations under any version that passes and should keep appraisal records that could support one. The constitutional question after Moore v. United States is unresolved, and the mark-to-market and minimum-tax designs exist in part to survive it.

L8 Charitable. A client funding a CRUT with appreciated stock should fund it under current law, which taxes nothing at funding and allows the immediate income tax deduction for the calculated remainder value. The Greenbook rule would tax the non-charitable share of the gain at funding, above the $5 million exclusion; the STEP Act would treat the transfer as a sale unless a CRUT counts as a “charitable trust” under its exception, which the draft does not say. Both apply to transfers after their effective dates, so a trust funded before enactment is outside them. A client with a donor-advised fund should expect a payout clock in any charitable-reform bill and should treat the fund as a distribution vehicle rather than an endowment.

L9 Private placement life insurance. The Wyden bill reaches existing policies, with 180 days to convert to a conventional product. A client holding PPLI should know the policy’s conversion terms now.

L10 State measures. California cannot enact a wealth tax without another statewide vote, and the next opportunity is the 2028 ballot. Washington residents with estates above $3 million face the state’s estate tax at a 20% top rate from July 1, 2026, and a 9.9% income surtax from 2028. A California client with Washington property should revisit domicile and situs assumptions in light of both.

Questions Clients Ask

Will the $15 million estate tax exemption go down? Not before 2029. The exemption is $15,000,000 per person for 2026, indexed from 2027, with no sunset, and President Trump holds the veto through January 2029. The Democratic bills on file would set it at $3.5 million (Van Hollen, S. 4196; Sanders, S. 1178) or $5 million (Neal’s 2021 committee bill), effective the January 1 after enactment. Exemption used by gift before a reduction is not clawed back. Treas. Reg. § 20.2010-1(c).

Would a federal wealth tax apply to me? Every federal proposal starts at $50 million of net worth (Warren), $100 million (Beyer’s minimum tax; Newsom’s proposal), or $1 billion (Sanders–Khanna; Wyden’s mark-to-market). Below those thresholds none of the bills applies. California cannot enact a wealth tax of its own without a statewide vote to repeal Proposition 42.

Is the step-up in basis going away? No bill ending the § 1014 step-up has had a hearing in either tax-writing committee. Every version carries an exclusion, $1 million in the STEP Act (only $100,000 of it for lifetime gifts) and $5 million per person in the Greenbook, plus a residence exclusion, and the Wyden bill ends the step-up only for taxpayers above $1 billion in assets or $100 million in income. The Republican bill with 46 Senate cosponsors, the Death Tax Repeal Act, would preserve it.

Does the Fair Trusts Act apply to a charitable remainder trust? Yes. S. 4490 excludes only wholly charitable trusts and § 401(a) plan trusts. A CRUT with living income beneficiaries is a covered trust, valued at the net value of all its assets with no subtraction for the charity’s remainder. The $50 million exemption is one amount per beneficiary allocated across all of that beneficiary’s trusts, and the charity, as an exempt beneficiary, receives none of it, so the CRUT’s threshold is whatever its income beneficiaries allocate to it. The bill has no hearing scheduled.

Should a CRUT be funded now, before any of this changes? A CRUT funded under current law with unencumbered stock and no binding sale agreement recognizes no gain at funding, sells the appreciated asset inside the trust without tax, and gives the donor an immediate income tax deduction for the calculated remainder value. The Greenbook would tax the non-charitable share of the gain at funding above a $5 million exclusion; the STEP Act would treat the transfer as a sale unless a CRUT falls within its “charitable trust” exception. Both reach only transfers after their effective dates, and neither has had a hearing. The decision turns on the asset, its basis, the client’s income needs, and the charitable intent, not on a bill in committee.

Can California enact its own estate tax? Not without a vote of the people. Proposition 6 of 1982 repealed the state’s inheritance and gift taxes and bars the Legislature from reimposing a tax by reason of death on its own, Cal. Rev. & Tax. Code § 13301; Senator Wiener’s 2019 bill, SB 378, was written as a ballot measure for that reason and never reached the floor. Proposition 42 now adds a constitutional bar on new taxes on the ownership of financial assets. The next opportunity for either is the 2028 ballot.

Future-Proofing a New or Existing Estate Plan

None of the proposals above becomes law before 2029, and most will never be enacted in the form described here. A plan can still be written, or amended, so that it does not have to be redone when one of them is. A future-proofing review covers four things:

1. Which levers touch the plan at all. For most California families the answer is two, L1 and L2; for a family with a charitable plan, L8; for a family above $50 million, most of them.
2. Whether the instrument already carries the provisions that let a trustee or protector adjust to a change without a court proceeding or a new document, each within the limits its own terms and the statute set: a trust protector with power to amend administrative and tax provisions; decanting authority under the California Uniform Trust Decanting Act, Cal. Prob. Code §§ 19501–19530; a substitution power; disclaimer and Clayton QTIP provisions, which let the survivor and the executor decide after the first death how much goes into a bypass trust; and formula clauses tied to the exemption in effect at death rather than to a dollar figure.
3. A trigger list for this client: which hearing, markup, or platform plank means it is time to act, and what the action is.
4. For a client with appreciated assets or a charitable plan, whether a charitable remainder trust funded under current law is the right step now, with the immediate income tax deduction for the calculated remainder value illustrated at the client’s own numbers.

To schedule a review of a new or existing plan, book a consultation. Bring the current trust instrument and an asset list with cost basis.

Sources

Election results and California measures: California Secretary of State, Proposition 42 title and summary; Legislative Analyst’s Office, Proposition 42 analysis; KQED/AP results for Propositions 40 and 42 as of Nov. 7, 2026 (kqed.org/elections/results/california); CalMatters, campaign finance totals (Nov. 4, 2026); CalMatters, “Gavin Newsom backs measure to kill the billionaire tax” (Oct. 9, 2026); San Francisco Standard, California Democratic Party endorsement (Aug. 2, 2026); Washington Free Beacon, Zucman statement (Nov. 2026); K&L Gates, 2026 Midterm Election Guide to the 120th Congress (Nov. 4, 2026); OPB, “6 PNW lawmakers could gain powerful positions” (Nov. 4, 2026); MassLive/CPA Practice Advisor on Neal (Nov. 5, 2026).

Bills (text as introduced): Billionaires Income Tax Act, S. 2845 / H.R. 5427 and the Finance Committee one-pager (Sept. 17, 2025); Getting Rid of Abusive Trust Schemes Act, S. 4287 (Apr. 14, 2026; §§ 2(c), 3(d), 4(c) for the three effective dates); Protecting Proper Life Insurance from Abuse Act, S. 4279 (Apr. 13, 2026); Fair Trusts for Fiscal Responsibility Act, S. 4490 (May 12, 2026; proposed §§ 2901, 2902(b)–(c), 2921(a), 2922(a)(2); bill §§ 2(e), 3(c), 4; murray.senate.gov one-pager); Strengthen Social Security by Taxing Dynastic Wealth Act, S. 4196 (Mar. 2026); STEP Act section-by-section (2021 discussion draft); Ultra-Millionaire Tax Act of 2026, H.R. 8085 (Mar. 25, 2026; proposed § 2901(c)(4) on split-interest trusts) and Senate companion S. 4246 (warren.senate.gov, Mar. 26, 2026); For the 99.5 Percent Act, S. 1178 (118th Cong., Apr. 2023; JCT score letter on the 2021 version, Mar. 24, 2021); Make Billionaires Pay Their Fair Share Act, S. 3956 / H.R. 7767 (Mar. 2, 2026); Oligarch Act of 2025, H.R. 2912 (congress.gov); Death Tax Repeal Act of 2025, S. 587 / H.R. 1301; Preserving Family Farms Act, H.R. 4937 (118th Cong.; panetta.house.gov); House Ways and Means Committee bill, Sept. 2021 (Americans for Tax Fairness analysis, Sept. 23, 2021); Warren, Van Hollen, Sanders, Whitehouse letter to Secretary Yellen (Mar. 20, 2023).

Treasury and IRS: General Explanations of the Administration’s Fiscal Year 2025 Revenue Proposals (Mar. 11, 2024; realization at transfer and the $5 million exclusion, and the estate, gift, and trust proposals); Rev. Rul. 2023-2; Proposed Regulations under § 4966, REG-142338-07 (Nov. 14, 2023), status per Council on Foundations comment letter (May 29, 2026).

Current law stated in “Which Tax Rules Would These Proposals Change?”: Pub. L. 119-21 (July 4, 2025), §§ 70106 (basic exclusion amount), 70111 (limitation on itemized deductions), 70425 (0.5% floor); Rev. Proc. 2025-32 (Oct. 9, 2025) (2026 basic exclusion amount, GST exemption, and annual exclusion); Treas. Reg. §§ 20.2010-1(c), 20.2031-1(b), 20.2036-1(c)(2); Rev. Rul. 85-13; Rev. Rul. 2003-91; Rev. Rul. 2004-64; Walton v. Commissioner, 115 T.C. 589 (2000); Moore v. United States, 602 U.S. 572 (2024); Cal. Prob. Code §§ 19501–19530, 21205; Cal. Rev. & Tax. Code § 13301 (Prop. 6, June 8, 1982; Ballotpedia); Sen. Scott Wiener, SB 378 press release (Mar. 26, 2019); New York 2026 basic exclusion amount (N.Y. Dep’t of Taxation and Finance).

Scholarship: Galle, Gamage & Lord, Taxing Dynasties, 174 U. Pa. L. Rev. (2026); Hemel & Lord, Closing Gaps in the Estate and Gift Tax Base (Coase-Sandor Working Paper No. 937, 2021) and Revitalizing the Generation-Skipping Transfer Tax (2021); Galle, Gamage & Shanske, Solving the Valuation Challenge: The ULTRA Method for Taxing Extreme Wealth, 72 Duke L.J. (2023); Batchelder, Leveling the Playing Field between Inherited Income and Income from Work through an Inheritance Tax (Hamilton Project, 2020); Madoff, The Second Estate (2025), and interview, The Conversation (Jan. 6, 2026); Munnell, “Taxing Inheritances Under the Income Tax Is a Great Idea,” Center for Retirement Research at Boston College (Nov. 26, 2025); Colinvaux, Speeding Up Benefits to Charity, 63 B.C. L. Rev. 2621 (2022); Gale, Hall & Sabelhaus, Taxing the Great Wealth Transfer (Brookings, Dec. 2024) and EconoFact explainer (May 26, 2026); Institute for Policy Studies, Gilded Giving 2026; Reich, Just Giving (2018); Brown, “A Wealth Tax Credit” (Federal Reserve Bank of Minneapolis, 2021).

2028 and advocacy: Axios, “Left pushes wealth tax as litmus test for 2028 Dems” (Mar. 29, 2026); Good Morning America, Newsom national billionaires’ tax (June 26, 2026); San Francisco Standard, Khanna on Newsom (June 26, 2026); HuffPost, Murphy backs California billionaire tax (Mar. 2026); AP, Prop 40 coverage (Nov. 4, 2026).

States: Washington SB 6346 and SB 6347 (Axios Seattle, Apr. 8, 2026; Washington State Standard, Nov. 4, 2026; MyNorthwest, Nov. 5, 2026) and Washington Department of Revenue, estate tax; New York S. 165; Vermont House Ways and Means, Galle testimony materials (Apr. 14, 2026).

This page is a legislative watchlist, not legal advice. It describes proposals that are not law and reflects the public record as of November 8, 2026. Bill status, sponsors, and provisions change; the review log above records what was re-checked and when. A client weighing any of the techniques discussed should rely on the law in force at the time of the transaction and on advice specific to the client’s facts.