Preferential Capital Gains Treatment for High-Net-Worth Individuals

Eliminating Special Treatment for Concentrated Wealth Holders

AKA “Harmonize Capital Gains Tax Treatment for Fiscal Accountability”


Which agency/agencies promulgated the regulation? *
Internal Revenue Service (IRS)
Which title, parts, and/or sections of the Code of Federal Regulations (C.F.R.) should be rescinded? *
Rescind and revise regulatory provisions within 26 CFR Part 1 that authorize preferential capital gains treatment for high-net-worth individuals and asset classes disproportionately used for wealth preservation rather than productive investment, including: §1.1(h) – Preferential maximum tax rates on long-term capital gains §1.1202-1 – Exclusion of gain from Qualified Small Business Stock (QSBS) §1.1256-1 – 60/40 split treatment of certain regulated futures contracts and other financial instruments §1.1045-1 – Rollover of QSBS gains into new qualified stock Any additional interpretive guidance or safe harbors that enable multi-tiered entity structures to segment or defer capital gains without meaningful economic risk or real asset reinvestment
What is your name?
—OPTIONAL--
Is your proposed rescission a notice of proposed rulemaking, final rule, direct final rule, interim final rule, or interpretive rule? *
Notice of Proposed Rulemaking
What is the name of the regulation being rescinded, if applicable? *
Preferential Capital Gains Treatment for High-Net-Worth Individuals
Please provide a short summary of the justifications for the rescission. *
Existing capital gains exemptions disproportionately benefit concentrated wealth holders and undermine public trust in fiscal equity. Rescinding these carve-outs would restore fairness and fiscal responsibility within the tax system.
Please insert the address of the agency. [NPRM, DFR, and IFR only]
Department of the Treasury Internal Revenue Service 1111 Constitution Avenue, NW Washington, D.C. 20224
Please insert the contact information for the agency. *
public_liaison@irs.gov
What is the background for the regulation being rescinded? *
Originally intended to incentivize investment and economic growth, broad-based capital gains exemptions have increasingly been used by ultra-high-net-worth individuals and corporations to shelter disproportionate wealth, eroding the tax base and increasing inequality.
Explain the reasons for the rescission. *
Repealing these exemptions will simplify tax administration, promote transparency, reduce regulatory capture, and affirm the government's commitment to fair and equitable public finance.
Describe the text of the relevant C.F.R. provisions as it will exist after the rescission. *
All preferential exceptions benefiting the top 5% of individual or corporate earners shall be eliminated. Standard capital gains tax treatment will apply uniformly without special exclusions based on asset class, holding structure, or wealth tier
Please insert the name of the current agency head. *
Michael Faulkender
Please insert the title of the agency head. *
Acting Commissioner of Internal Revenue