Anti-Corruption Tax (ACT) Act
- Sponsor
- Sen. Blumenthal, Richard [D-CT]
- Committees
- Finance Committee (primary)
- Last action
- Sep 22, 2026
Bottom line
The bill seeks to eliminate financial benefits derived from discretionary federal actions for high-ranking officials and their families by taxing such income at 100%, aiming to deter conflicts of interest and corruption.
What it actually does
This bill amends the Internal Revenue Code of 1986 to impose a 100% surtax on "public office windfall income" received by certain high-level federal officials, their spouses, and their children. This income is defined as taxable income attributable to a "covered favorable government action"—a discretionary federal action taken while the official served, directed at them or an entity they beneficially own, and expected to confer a substantial economic benefit.
Proponents argue
Supporters argue this bill is a critical step to combat corruption and restore public trust by removing the financial incentive for public officials to use their office for personal or family gain. They contend it would deter conflicts of interest and ensure that government actions are made solely in the public interest, not for private enrichment.
Opponents contend
Opponents might argue that the bill is overly broad, potentially chilling legitimate business activities of public officials' family members, or that it could be difficult to implement and enforce due to the complexities of tracing income attribution and defining "substantial economic benefit." They might also raise concerns about potential constitutional challenges related to due process or taking of property.
The bill is short and relatively straightforward, allowing for a quick read, but its implications require careful consideration.
Section 2(a), adding new Part VIII, Section 59B(a) to the Internal Revenue Code of 1986
Imposition of 100% Public Office Windfall Tax
This provision establishes a new tax, in addition to existing taxes, equal to 100% of an individual's "public office windfall income." This effectively means that any income determined to be a "windfall" from public office, as defined later in the bill, will be entirely confiscated by the government.
Supporters argue
Supporters argue that a 100% tax rate is necessary to completely eliminate any financial incentive for public officials to engage in self-dealing or to direct government actions for personal profit, thereby upholding the integrity of public service.
Critics contend
Critics might argue that a 100% tax rate is punitive and could face legal challenges, potentially being seen as an unconstitutional taking of property or an ex post facto law if applied retroactively without clear guidelines.
Tradeoffs
The tension is between the desire to eliminate corruption incentives and the potential for overreach or unintended consequences that could discourage qualified individuals from public service or create legal challenges.
Section 2(a), adding new Section 59B(b)
Scope of Individuals Subject to the Tax
This section defines who is subject to the new tax. It includes current or former Presidents, Vice Presidents, and individuals at Level I of the Executive Schedule (senior cabinet members, etc.). It also extends to their spouses during the period in which a covered favorable government action was made, and their children (as defined by section 152(f)(1) of the IRC).
Section 2(a), adding new Section 59B(c)(1)
Definition of Taxable Windfall Income
This provision defines "public office windfall income" as any taxable income that is "attributable to a covered favorable government action." This is the core concept that triggers the 100% tax, meaning the income must be directly linked to a specific government action as defined elsewhere in the bill.
Section 2(a), adding new Section 59B(c)(2)
Types of Government Actions Triggering the Tax
This section specifies what constitutes a "covered favorable government action." It must be a discretionary Federal action taken while the official is in office, directed at a covered individual or an entity they beneficially own, and reasonably expected to confer a substantial economic benefit beyond routine actions. It then lists eight specific types of actions, including licenses, permits, leases, contracts, exemptions, financial assistance, and merger approvals.
This provision defines "beneficially owned" by referencing section 1010.230 of title 31, Code of Federal Regulations, as in effect on the date of the enactment of this section. This C.F.R. section typically deals with beneficial ownership for financial institutions and anti-money laundering purposes.
Section 2(a), adding new Section 59B(c)(3)
Why it matters:This is standard legislative practice to avoid reprinting lengthy regulatory definitions and to ensure consistency with existing legal frameworks, particularly in financial regulation. However, it makes the bill less accessible to a general audience.
Case for: Referencing existing regulations ensures consistency with established legal definitions and leverages existing compliance infrastructure, avoiding the creation of new, potentially conflicting definitions.
Case against: Critics might argue that relying on external regulations makes the bill less transparent and harder for the public and even legal professionals to fully understand without specialized knowledge of financial regulations.
Estimated impact: This definition is crucial as it determines the scope of entities whose income could be subject to the 100% tax, significantly influencing the bill's reach.