RISE Act

Bill Number

H.R. 4102

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-06-24: Referred to the House Committee on Ways and Means.

Last Updated

2025-07-23T14:12:27Z

AI-Generated Summary

Purpose

The RISE Act (Revitalizing Investment, Savings, and Entrepreneurship Act) aims to encourage investment, savings, and business startups by lowering the maximum tax rate on capital gains—profits from selling investments like stocks or real estate—to 15%.

Key Provisions

• Tax Rate Cap: Sets the tax rate on "adjusted net capital gain" (the portion of taxable income from long-term capital gains after deductions) at a maximum of 15% for amounts exceeding the threshold taxed at lower rates (typically 0% for lower incomes).
• Effective Date: Applies to tax years starting after the bill's enactment.
• Short Title: Officially named the "Revitalizing Investment, Savings, and Entrepreneurship Act" or "RISE Act."

Significant Changes to Existing Law

• Under current U.S. tax law (Internal Revenue Code Section 1(h)), long-term capital gains are taxed at 0%, 15%, or 20% based on income level, with the 20% rate applying to higher earners (e.g., individuals with taxable income over about $500,000, depending on filing status).
• This bill eliminates the 20% rate by amending the tax bracket structure: It removes one subparagraph, renumbers others, and revises the 15% bracket to cover all adjusted net capital gains above the lower threshold, effectively capping the top rate at 15%.
• Does not affect short-term capital gains (taxed as ordinary income) or other investment taxes like the 3.8% Net Investment Income Tax for high earners.

Potential Impacts

• On Citizens: Benefits individuals and families with capital gains by reducing their tax liability, potentially increasing disposable income for reinvestment or spending; primarily helps middle- and upper-income taxpayers who realize significant gains from investments or asset sales.
• On Government Agencies: The Internal Revenue Service (IRS) would administer simpler capital gains calculations, but the U.S. Treasury could see reduced federal revenue (estimates vary, but similar proposals suggest billions in annual losses), potentially affecting funding for public programs.
• On International Relations: Minimal direct impact, though lower U.S. capital gains taxes could make the country more attractive for foreign investment, influencing global capital flows.

Main Stakeholders Affected

• Investors and Business Owners: Gain from lower taxes on profits from selling stocks, bonds, businesses, or property, encouraging risk-taking and entrepreneurship.
• Taxpayers at Higher Incomes: Most directly benefit, as the change targets the top bracket; lower-income individuals with minimal capital gains see little effect.
• Federal Government and Taxpayers: Indirectly affected through lower revenue, which could lead to budget adjustments or higher taxes elsewhere.
• Financial Institutions: May see increased trading and investment activity due to tax incentives.

Notable Legal, Constitutional, or Political Implications

• Legal: Simplifies the tax code by removing a bracket, but requires IRS updates to forms and guidance; no challenges to constitutionality anticipated, as Congress has broad authority over taxation under Article I of the U.S. Constitution.
• Constitutional: Aligns with the 16th Amendment's allowance for income taxes, including on capital gains; does not raise equal protection issues, though it could spark debates on tax fairness.
• Political: As a revenue-reducing measure, it may face opposition in budget reconciliation or deficit hawks; supporters argue it boosts economic growth, while critics highlight potential increases in income inequality—though the bill itself focuses solely on tax mechanics without addressing broader policy debates.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Hill, J. French [R-AR-2]

Cosponsors (5)

Rep. Steube, W. Gregory [R-FL-17], Rep. Haridopolos, Mike [R-FL-8], Rep. Meuser, Daniel [R-PA-9], Rep. Simpson, Michael K. [R-ID-2], Rep. Palmer, Gary J. [R-AL-6]

Recent Actions

• 2025-06-24: Referred to the House Committee on Ways and Means.
• 2025-06-24: Introduced in House
• 2025-06-24: Introduced in House

Bill Versions

• Revitalizing Investment, Savings, and Entrepreneurship Act — issued 2025-06-24 — PDF (2 pages)