WASHINGTON — The Treasury Department released internal guidance Tuesday confirming that individuals with net worths exceeding $1 billion are now exempt from all federal income taxes, citing the need to "stimulate job creation at the highest levels of economic ambition."
The policy, outlined in a three-page directive drafted at the request of Captain Sharts-a-Lot’s economic council, reclassifies billionaire income as "pre-tax wealth appreciation"—a category not subject to withholding, payroll deductions, or any existing IRS collection mechanism.
Under the new framework, a person worth $51 billion would owe the federal government nothing, while a single mother earning $34,000 would see her effective rate remain at 12 percent, plus an additional 6.2 percent payroll tax.
"We discovered that taxing success is a drag on human potential," said Deputy Treasury Secretary Paul Whitaker at a press conference. "The working poor contribute best when they are slightly underwater. It encourages diligence."
Separately, the Office of the Comptroller of the Currency issued a rule reversing the Biden-era cap on bank overdraft fees, allowing institutions to charge up to $50 per overdraft. The 20 largest U.S. banks collected $3.1 billion in overdraft revenue in 2025, according to public filings.
JPMorgan Chase CEO Jamie Dimon, whose net worth exceeds $2 billion, is among those who will benefit from both measures. The bank reported $2.2 billion in overdraft fees last year alone.
The directive includes a "patriotic wealth shield" provision for elected officials, permitting them to defer tax assessments on assets held in blind trusts. The president, whose net worth Forbes recently estimated at $6.5 billion, is expected to use the shield for his ongoing business holdings.
An IRS spokesperson confirmed the guidance took effect immediately, adding that taxpayer inquiries would be routed to an automated hotline staffed during limited business hours.
