ROBINHOOD Act

Bill Number

H.R. 6438

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-12-04: Referred to the House Committee on Ways and Means.

Last Updated

2026-07-01T08:08:00Z

AI-Generated Summary

Purpose

The ROBINHOOD Act (H.R. 6438) aims to amend the Internal Revenue Code of 1986 to increase tax revenue from high-income individuals by imposing an excise tax on certain types of secured loans and lines of credit. An excise tax is a fee on specific activities, here applied to borrowing against valuable assets to promote fairer tax contributions from wealthy borrowers.

Key Provisions

• Imposition of Tax: A 20% excise tax is levied on the amount borrowed in a taxable year from "specified secured loans or lines of credit." This includes loans or revolving credit secured by capital assets (e.g., investments like stocks or bonds, as defined under tax law as non-personal-use property held for investment).
• Who Pays and How: The tax is paid by the borrower and collected annually by the Secretary of the Treasury (through the IRS) in a manner determined by the Secretary.
• Eligibility Criteria:
• Applies only to "applicable borrowers," defined as individuals with adjusted gross income (AGI, which is total income minus specific deductions) exceeding $400,000 ($450,000 for joint filers).
• Excludes common loans like residential mortgages, home equity loans/lines of credit, margin loans (for stock purchases), and those secured by farmland.
• Administration: The Secretary can issue regulations to implement the tax.
• Effective Date: Applies to loans and lines of credit extended after the date of enactment.

Significant Changes to Existing Law

• Adds a new Subchapter E to Chapter 36 of the Internal Revenue Code, creating the first federal excise tax specifically targeting secured borrowing by high-income individuals against capital assets.
• No prior federal tax directly imposes a percentage-based fee on the borrowed amount for these loan types, shifting the tax burden to borrowers rather than lenders and focusing on high earners.

Potential Impacts

• Government Agencies: The IRS will gain new revenue collection responsibilities, potentially increasing federal funds for public programs (estimated as "redistribution of billions" in the bill's title). This could require additional administrative resources for enforcement and guidance.
• Citizens: High-income individuals may face higher borrowing costs, discouraging use of asset-backed loans for non-essential purposes and possibly encouraging alternative financing like selling assets. Lower- and middle-income earners are unaffected, as the tax targets only those above the AGI thresholds.
• International Relations: No direct impacts, as the bill focuses on domestic U.S. taxpayers and does not address foreign entities or cross-border loans.

Main Stakeholders Affected

• High-Income Individuals (Applicable Borrowers): Primary targets, facing the new 20% tax on eligible loans, which could alter their financial planning.
• Lenders and Financial Institutions: Indirectly affected, as borrowers might reduce demand for these loan products, though lenders are not directly taxed.
• U.S. Government (IRS and Treasury Department): Responsible for collecting and administering the tax, benefiting from increased revenue.
• General Taxpayers: Potential indirect beneficiaries through redistributed funds, though specifics on allocation are not detailed.

Notable Legal, Constitutional, or Political Implications

• Legal: The tax's focus on high earners aligns with progressive taxation principles but could face challenges in court over definitions (e.g., what qualifies as a "capital asset") or enforcement practicality. The exclusion of certain loans (like mortgages) may raise questions of unequal treatment under tax law.
• Constitutional: Appears consistent with Congress's power to levy taxes (Article I, Section 8), as it is a uniform excise tax on a specific activity without targeting protected classes. No apparent free speech or due process issues.
• Political: Promotes wealth redistribution rhetoric (evident in the acronym "ROBINHOOD"), potentially polarizing debates on tax fairness and economic inequality. It could influence broader tax reform discussions but risks opposition from financial sectors concerned about reduced lending activity.

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

Sponsor

Rep. Goldman, Daniel S. [D-NY-10]

Cosponsors (10)

Rep. Khanna, Ro [D-CA-17], Rep. Cohen, Steve [D-TN-9], Rep. Foushee, Valerie P. [D-NC-4], Rep. Smith, Adam [D-WA-9], Rep. McGovern, James P. [D-MA-2], Rep. Pettersen, Brittany [D-CO-7], Rep. Tlaib, Rashida [D-MI-12], Rep. Deluzio, Christopher R. [D-PA-17], Rep. Williams, Nikema [D-GA-5], Rep. Lofgren, Zoe [D-CA-18]

Recent Actions

• 2025-12-04: Referred to the House Committee on Ways and Means.
• 2025-12-04: Introduced in House
• 2025-12-04: Introduced in House

Bill Versions

• Redistribution of Billions by Instituting New High-Income Obligations on Overlooked Debt Act — issued 2025-12-04 — PDF (4 pages)