Prevent Presidential Profiteering Act
- Bill Number
- H.R. 7381
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-02-04: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-05-20T08:08:42Z
AI-Generated Summary
Purpose
The "Prevent Presidential Profiteering Act" (H.R. 7381) aims to prevent former Presidents of the United States and their families from profiting from civil lawsuits filed against the U.S. government during their time in office. It does this by imposing a tax that effectively captures 100% of any damages awarded or settled from such lawsuits.
Key Provisions
- Imposition of Tax: A new Chapter 50B is added to Subtitle D of the Internal Revenue Code of 1986, creating Section 5000E. This imposes a 100% tax on the "qualified civil action amount" received by "covered persons" in any taxable year.
- Covered Persons: Includes any individual who has served as President, their spouse, children, grandchildren, parents, grandparents, siblings, or half-siblings (defined as "members of the family" under similar tax rules), and any business or entity controlled by these individuals (based on ownership or control principles like those in existing tax law).
- Qualified Civil Action Amount: Refers to damages (from settlements, verdicts, judgments, or other means) received from civil lawsuits filed by the covered person against the U.S. government (or its agencies) where the filing, settlement, or judgment occurred during the President's term in office (the "applicable period," starting from inauguration and ending at the end of the term).
- Treatment of the Tax: The tax is handled like regular income taxes for administrative purposes (e.g., collection and penalties under Subtitle F). However, these amounts are excluded from gross income for general income tax purposes under Chapter 1, meaning they are not double-taxed but fully captured by this specific 100% tax.
- No Deductions Allowed: Amends Section 275(a)(6) of the Internal Revenue Code to prevent any deduction of this tax from overall income taxes.
- Effective Date: Applies to amounts received after the date of enactment.
Significant Changes to Existing Law
- Introduces a entirely new tax chapter (50B) specifically targeting presidential-related civil damages, which did not exist before.
- Modifies deduction rules in Section 275 to explicitly block deductions for this new tax, ensuring full enforcement.
- Adds a clerical update to the table of chapters in Subtitle D for organizational purposes.
These changes expand the Internal Revenue Code's scope to include a punitive tax measure tied to presidential service, without altering broader civil lawsuit or presidential immunity laws.
Potential Impacts
- On Government Agencies: The U.S. Department of the Treasury and Internal Revenue Service (IRS) will need to administer and enforce this new tax, potentially increasing administrative workload for tracking and collecting from a small number of high-profile individuals. It may deter lawsuits against the government by former Presidents, reducing litigation costs for agencies.
- On Citizens: Primarily affects a narrow group (former Presidents and families), but could set a precedent for taxing proceeds from government-related disputes. For the general public, it promotes the idea that public office should not lead to personal financial gain through lawsuits, potentially enhancing trust in government accountability.
- On International Relations: No direct impacts, as the bill focuses on domestic tax policy and U.S. internal lawsuits.
Main Stakeholders Affected
- Former U.S. Presidents and Their Families: Directly taxed on any qualifying damages, potentially limiting their ability to retain financial awards from lawsuits related to their presidency.
- Controlled Entities: Businesses or organizations owned or controlled by former Presidents or family members, which could face the tax if they receive the damages.
- U.S. Government and IRS: Responsible for implementation, enforcement, and potential defense against related legal challenges.
- Taxpayers Generally: Indirectly, through any increased IRS administrative costs or broader precedents on taxing government-related gains.
Notable Legal, Constitutional, or Political Implications
- Legal Implications: The 100% tax rate acts as a de facto prohibition on profiting from such lawsuits, raising questions about its enforceability under tax law principles (e.g., whether it qualifies as a legitimate excise tax). It excludes these amounts from gross income to avoid overlap with standard taxes, but covered persons may still challenge it in court over valuation or applicability.
- Constitutional Implications: Relies on Congress's broad power to levy taxes (under Article I, Section 8), but could face scrutiny for potentially violating equal protection (14th Amendment) by targeting a specific class of individuals (former Presidents) without a clear rational basis. It does not alter existing presidential immunities or civil lawsuit rights but indirectly discourages certain filings.
- Political Implications: The bill's focus on civil actions during a President's term may be viewed as a response to high-profile lawsuits by former officials, potentially polarizing debates on executive accountability versus personal rights. As introduced by Democratic representatives and referred to the House Ways and Means Committee, it highlights partisan divides on presidential conduct and ethics.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (17)
Rep. Doggett, Lloyd [D-TX-37], Rep. Larson, John B. [D-CT-1], Rep. Davis, Danny K. [D-IL-7], Rep. Chu, Judy [D-CA-28], Rep. DelBene, Suzan K. [D-WA-1], Rep. Moore, Gwen [D-WI-4], Rep. Boyle, Brendan F. [D-PA-2], Rep. Panetta, Jimmy [D-CA-19], Rep. Gomez, Jimmy [D-CA-34], Rep. Horsford, Steven [D-NV-4], Rep. Sánchez, Linda T. [D-CA-38], Rep. Evans, Dwight [D-PA-3], Rep. Schneider, Bradley Scott [D-IL-10], Rep. Suozzi, Thomas R. [D-NY-3], Rep. Dexter, Maxine [D-OR-3], Del. Norton, Eleanor Holmes [D-DC-At Large], Rep. Salinas, Andrea [D-OR-6]
Recent Actions
- 2026-02-04: Referred to the House Committee on Ways and Means.
- 2026-02-04: Introduced in House
- 2026-02-04: Introduced in House
Bill Versions
- Prevent Presidential Profiteering Act — issued 2026-02-04 — PDF (5 pages)