Prevent Presidential Profiteering Act
- Sponsor
- Rep. Thompson, Mike [D-CA-4]
- Committees
- Ways and Means Committee (primary)
- Last action
- Feb 4, 2026
Bottom line
The bill aims to prevent a President or their close associates from personally profiting from lawsuits against the U.S. government during or immediately after their time in office by imposing a full tax on any such damages.
What it actually does
This bill amends the Internal Revenue Code of 1986 to impose a 100% tax on any damages received by a current or former President, their family members, or controlled entities from civil actions filed against the United States government. This tax applies to amounts received from lawsuits initiated or settled during the President's term in office. The bill also specifies that these damages are excluded from gross income for standard income tax purposes, preventing double taxation.
Proponents argue
Supporters argue that this bill is essential for maintaining the integrity of the presidency and preventing conflicts of interest. They contend that a President should not be able to personally enrich themselves through litigation against the very government they lead or have led, especially for actions taken during their tenure. A 100% tax ensures that any damages awarded are returned to the Treasury, upholding the principle that public service should not be a vehicle for personal financial gain from such specific legal actions.
Opponents contend
Critics might argue that this bill could be seen as punitive or discriminatory, potentially targeting specific individuals or the office of the President in a way that infringes upon an individual's right to seek legal redress. They may contend that it could discourage legitimate claims against the government, even if those claims are valid, by effectively confiscating any awarded damages. Concerns could also be raised about the precedent of singling out a specific class of individuals for such a unique tax treatment, potentially raising constitutional questions regarding due process or equal protection.
The bill is very short and clearly written, making it highly accessible for a reader to understand its core provisions quickly.
Section 2(a), adding Chapter 50B, Section 5000E to Subtitle D of the Internal Revenue Code of 1986
100% Tax on Damages from Civil Actions Against the U.S. by Presidents or Related Persons
This provision establishes a new tax equal to 100% of any damages received by a 'covered person' from a civil action filed against the United States government. A 'covered person' includes any individual who has served as President, their spouse, certain family members (as defined by Section 152(d)(2) of the IRC), and any entity they control. The tax applies to damages from lawsuits filed or settled during the period the individual served as President.
Supporters argue
Supporters argue this provision closes a potential loophole where a President or their associates could financially benefit from legal disputes with the government they are sworn to serve. It reinforces ethical standards by ensuring that public service is not leveraged for personal financial gain through specific legal actions against the state.
Critics contend
Opponents might contend that a 100% tax is an extreme measure that could be viewed as confiscatory, potentially infringing on an individual's right to compensation for legitimate grievances. They may argue it could deter even valid lawsuits against government overreach or misconduct if the individual knows any awarded damages will be fully taxed away.
Tradeoffs
The bill balances the principle of preventing presidential profiteering against concerns about an individual's right to seek legal redress and receive compensation. It aims to eliminate financial incentives for certain lawsuits while potentially raising questions about the fairness of a 100% tax rate on awarded damages.
This subsection specifies that for purposes of Chapter 1 (income tax), the 'qualified civil action amount' (the damages subject to the 100% tax) shall not be included in the gross income of the covered person.
Section 5000E(d)(2) of the Internal Revenue Code of 1986, as added by Section 2(a) of the bill
Why it matters:This is standard legislative practice to clarify tax treatment and prevent unintended consequences (like double taxation). It ensures that the 100% tax is the only tax applied to these specific damages, rather than being taxed as income and then again by the special 100% levy.
Case for: Proponents would argue this clarification is necessary to ensure the tax is applied as intended, preventing an effective tax rate greater than 100% on the damages. It streamlines the tax treatment for these specific amounts.
Case against: No specific opposition is typically raised against such a clarifying provision, as it prevents an unintended and likely unconstitutional outcome of taxing more than 100% of an amount. However, critics of the overall bill might see it as a technical detail of a fundamentally flawed policy.
Estimated impact: This provision ensures that any damages subject to the 100% tax are not also subject to standard income tax, thus preventing an additional tax burden that would exceed the total amount of damages received.