ROBINHOOD Act
- Sponsor
- Rep. Goldman, Daniel S. [D-NY-10]
- Committees
- Ways and Means Committee (primary)
- Last action
- Dec 4, 2025
Bottom line
The bill seeks to increase tax revenue from high-income individuals by taxing their borrowing against capital assets, aiming to address wealth inequality and ensure a 'fair share' contribution to the tax base.
What it actually does
This bill imposes a new 20% excise tax on the amount borrowed annually through certain secured loans and lines of credit for individuals with an adjusted gross income (AGI) exceeding $400,000 ($450,000 for joint filers). The tax applies to loans secured by capital assets, explicitly excluding residential mortgages, home equity loans, margin loans, and loans secured by farmland.
Proponents argue
Supporters argue that high-income individuals often use secured loans against their capital assets to access liquidity without triggering capital gains taxes, effectively deferring or avoiding their 'fair share' of taxes. This bill would close that perceived loophole, generate significant revenue, and promote greater tax equity by ensuring that wealth, not just income, contributes to the tax base.
Opponents contend
Opponents might contend that this tax could discourage investment, reduce liquidity for high-net-worth individuals, and potentially lead to capital flight. They may argue it constitutes double taxation or that it unfairly targets a specific form of financial activity that is essential for capital markets and economic growth.
The bill is very short and straightforward, making it highly accessible for a reader to understand its core provisions quickly.
Section 2
Excise Tax on Secured Loans and Lines of Credit
This section establishes a new 20% excise tax on the amount borrowed annually through 'specified secured loans or lines of credit.' The tax is paid by the borrower. A 'specified secured loan' is defined as a loan or revolving credit arrangement secured by capital assets (as defined in section 1221(a) of the Internal Revenue Code, generally including stocks, bonds, and other investments, but not real estate or farmland) where the credit amount is based on the asset's value. This tax only applies to 'applicable borrowers,' defined as individuals with an adjusted gross income exceeding $400,000 ($450,000 for joint filers). Excluded from this tax are residential mortgage loans, home equity loans, margin loans, and loans secured by farmland.
Supporters argue
Proponents argue this provision directly addresses a perceived loophole where wealthy individuals can access significant liquidity by borrowing against appreciated assets without realizing capital gains, thus deferring or avoiding taxation. This tax ensures they contribute to the tax base on these transactions, promoting tax fairness and generating revenue.
Critics contend
Opponents would argue that this tax could stifle economic activity by making it more expensive for high-net-worth individuals to access capital for investments or other purposes. They might also contend it could lead to a reduction in the value of capital assets used as collateral or encourage individuals to seek alternative, potentially less transparent, financing methods.
Tradeoffs
The provision balances the goal of increasing tax equity and revenue from high-income individuals against potential impacts on capital markets, investment incentives, and the liquidity management strategies of wealthy taxpayers. It also navigates the complexity of defining what constitutes a 'specified secured loan' to avoid unintended consequences on common financial products.