The current code taxes labor reliably while allowing capital, wealth, perks, and inherited appreciation to escape or defer tax. The Accord taxes progressively by broadening the base, applying higher rates at the top, and pairing broad consumption taxation with monthly rebates and luxury surcharges.
Accumulated wealth helps settle accumulated public obligations. The current US code lets wealth compound across generations at preferential rates with no annual federal instrument, and at transfer the basis steps up — so decades of unrealized appreciation never enter any tax base. The result over fifty years is a stock of concentrated wealth that has paid little federal tax during its accumulation and pays diminished federal tax at its transfer.
The architecture's response is not new money confiscated. It is expected estate-tax liability collected gradually during life, with the prepaid amount credited against estate-tax settlement at transfer. The framing matters: this is not a Warren-style mark-to-market wealth tax. It is forward-collection of a liability Congress has plenary authority over (estate tax, since 1916), structured to avoid the Apportionment Clause problems that direct-tax instruments face.
The threshold is $10M individual — or $20M jointly held, only when proceeds are irretrievably jointly owned equally per a filing testament; without the testament, the prepayment is calculated individually even if married. Brackets are progressive across the canonical structure. Amounts paid during life are credited against estate-tax liability at death; the Estate Tax Prepayment Plan and the estate tax are halves of one settlement, not two parallel charges.
Illiquid-asset holders (closely-held businesses, real estate, private equity) may defer the prepayment to estate settlement under a published liquidity-protection rule at statutory interest. The annual rate is bounded so it never exceeds a fraction of long-run real returns on the underlying stock — preserving capital while smoothing the eventual settlement and providing decades of fiscal capacity now.
Three v10.2 architectural commitments protect the constitutional framing and strengthen the disclosure incentive structure.
First, the annual top-up rule. The Estate Tax Prepayment Plan is constitutionally framed as installment prepayment of an undisputedly constitutional estate tax. To preserve that framing, each year's payment is the smaller of the full statutory rate on bracketed wealth or the remaining gap to projected estate-tax liability (recomputed annually at current asset values). Most years that equals the full statutory rate; some years it caps at the residual gap; when cumulative prepayments already cover the projected liability, the year's top-up is zero — one continuous mechanism whose amount varies with the gap, never a suspension. A holder whose assets stop appreciating eventually stops paying because the obligation is already prepaid; charging beyond it would be uncompensated taking.
Second, volatility excess as heir basis credit. When cumulative prepayments at death exceed actual estate tax owed, the excess becomes a basis credit on inherited assets — allocated proportionally, transferred through normal succession, expiring at the heir's own death. NOT forfeited (would be uncompensated taking). NOT a direct refund (creates a "government writes checks to billionaire estates" optics problem). The basis-credit mechanism accomplishes the fairness function via the existing tax-basis architecture without a refund pipeline.
Third, hidden-asset disclosure architecture. A specific class of assets — foreign financial holdings, foreign physical assets, domestic-private physical assets (art, precious metals, collectibles), cryptocurrency cold storage — is genuinely hard to detect without taxpayer cooperation. The Accord opens a 36-month onboarding window with declining benefit, structured as a three-year taper. The window opens at enactment (retroactive to January 1 of the enactment year), and filings stagger by asset class within the same 36 months — financial assets first (trivially valued), hard-to-value physical and private-business interests in later cohorts — so the IRS valuation load spreads instead of queueing:
Year 1 (months 1-12): prompt declaration earns a 10% lifetime discount on the holder's own bracket-determined payment for the disclosed eligible-category assets. No back tax. No penalties.
Year 2 (months 13-24): the standard bracket rate on disclosed assets, plus retrospective back tax with interest for the period held undeclared. No penalties.
Year 3 (months 25-36): standard graduated bracket rates apply on disclosed assets, plus back tax. No penalties — Year 3 remains a penalty-avoidance window.
Year 4 onward (after the 36-month window closes): standard graduated rates plus back tax plus applicable penalties. Penalty magnitudes are set by Treasury enforcement schedule, not specified in canon — the architectural deterrent is the open-ended liability.
An undeclared asset bequeathed remains structurally bound to the estate it came from. Discovery within two heir generations brings the patriarch's estate back into scope for reconciliation — including distributions that have already been made. The heir's own property — earnings, their own home, inheritance from a different family line — is unaffected; only what was received from this same estate is in scope. Voluntary disclosure during the 36-month window settles the matter cleanly; later discovery carries broader consequences for the estate's distributions, with magnitudes set by Treasury enforcement schedule.
Total Treasury collection over the asset's lifetime is preserved because the suspension mechanism reconciles eventual estate tax; what changes is the timing and the visibility, not the long-run capture.
Individuals with net worth above $10M; couples with net worth above $20M (jointly held with testament). Below the threshold: no prepayment. Above the threshold: progressive bracket rates apply only to the wealth above the threshold, never to the threshold dollars themselves. Practically: the top fraction of the top 1%.
Per Federal Reserve Survey of Consumer Finances 2022, roughly 0.4% of US households have net worth above $10M; the population is ~600,000 households controlling approximately $35T in net worth. The architecture targets this stock of concentrated wealth without touching the upper-middle class.
Households below the threshold — no instrument applies. Above the threshold, only the wealth above the threshold pays. The personal residence, ordinary retirement accounts, and household goods are excluded from the taxable base under canonical valuation rules. Closely-held businesses inherited intact may use the liquidity-protection deferral. The architecture deliberately holds the threshold high so that the typical small-business owner, the typical farm-family heir, and the typical affluent professional are unaffected.
The filing testament for joint treatment is a substantive protection, not a procedural one. It ensures that the marriage-doubling concession actually reflects shared ownership: a household where one spouse legally owns the wealth and the other has only marital rights pays the individual schedule, not the doubled threshold. This closes the route by which a billionaire could nominally double the threshold without parting with control.
Pending canonical scoring rerun (post-bracket-reconciliation).
The Estate Tax Prepayment Plan's revenue is meaningful but smaller than the income-side spine. It bites a narrow filer base on a very large taxable base. Its primary fiscal role is decades-of-prepayment against future estate-tax settlement — providing the architecture's debt-retirement guarantee with capital that would otherwise wait until the holder's death.
The combined prepayment+estate+accession+GST architecture (annual installment escalator 0.80→2.00% v10.9, plus estate brackets 30/34/38% topping at 38% above $250M, plus the flat 5% accession stamp on the heir's lifetime receipts, plus a derived ≈39.0% GST on direct skips, all reconciled at settlement) produces effective long-run capture on accumulated wealth that's substantially higher than today's effective US estate-tax rate (~17% per IRS 706 statistics) — but lower than any single instrument's top rate would suggest, because the estate tax prepayment paid during life reduces the at-transfer balance and the four instruments work in sequence rather than stacking nominally. The architecture is designed to be felt as continuous rather than as a transfer-event shock.
See tax ladder · fiscal scoring
- Estate-tax timing (lifetime gifts)
- Lifetime gifts above the published exemption pay gift-tax parity at estate-bracket rates; cumulative tracking across decades. See lifetime-gifts subpage.
- Foundation / DAF transfers
- Large transfers to controlled tax-exempt entities face transfer-tax parity. Investment income at the entity then pays the Institutional Investment Excise. See foundation-transfers subpage.
- Tax-exempt accumulation
- The Institutional Investment Excise is the estate-tax-prepayment parallel for tax-exempt institutional capital. The same architecture, applied to entities that hold rather than individuals.
- Marriage-doubling without transfer
- Joint $20M threshold requires the irrevocable-joint-ownership filing testament. Without the testament, the prepayment is individual.
- Capital flight
- Exit tax (38% on net worth above $10M exemption) prices departure. Alliance Incentive provides reciprocal market access for jurisdictions aligning tax floors.
- Hidden assets — voluntary onramp
- 36-month disclosure window with year-by-year tapering benefit. **Year 1**: a 10% LIFETIME discount on the holder's bracket payment for disclosed hard-to-discover assets (paintings, self-custody crypto, off-shore accounts), no back tax, no penalties. **Year 2**: standard bracket rate + back tax with interest; no lifetime discount. **Year 3**: standard rates + back tax, penalty-avoidance window. **Year 4+ / undisclosed-and-discovered**: standard rates + back tax + penalties + compounded interest, with heir liability — undisclosed assets accrue interest and penalties to the heir as well as to the holder's estate. Magnitudes set by Treasury enforcement schedule.
- Hidden assets — estate reach
- An undeclared asset bequeathed remains bound to the estate. Discovery within two heir generations brings the estate's distributions back into scope for reconciliation, capped at the heir's total inheritance from the same estate. Heir's personal property and inheritance from other estates are unaffected. Magnitudes set by Treasury enforcement schedule.
- Hidden assets — HARO involuntary discovery
- 2× damages standard / 3× damages egregious (≥2 indicators). $10M+ assets trigger criminal referral. 40% whistleblower bounty. AI analytics. Statute reach: life of holder plus two generations of heirs, against the asset and the estate that bequeathed it.
The Estate Tax Prepayment Plan depends on a network of closures across the architecture. Detail rules live in the linked subpages.
- Estate tax
- The Estate Tax Prepayment Plan IS estate-tax prepayment by design. Estate brackets 30/34/38% topping above $250M (CFG.wealth.estateBrackets, v10.9; top bracket Debt-Sunset-adjustable). Amounts paid during life credit against settlement; the annual top-up formula prevents prepayments from exceeding projected ET.
- Capital-gains convergence
- Above the $10M lifetime CGAL, capital gains converge to ordinary marginal — ensuring wealth growth is taxed, not just the wealth stock.
- Buy-borrow-die elimination
- Death is a realization event. Forces accumulated appreciation into the income-tax base before it enters the estate-prepayment base.
- Institutional Investment Excise
- Estate-prepayment parallel for tax-exempt institutional capital. ~1.4% long-run avg, self-calibrating, $5M deduction, mission-deployed assets exempt.
- HARO (Hidden Asset Recovery Office)
- 30-year mandate, dedicated funding outside annual cycle. 40% whistleblower bounty, AI analytics, life-of-holder + life-of-heir statute. The credible enforcement that makes the disclosure-window architecture work.
- Heir basis credit (volatility excess)
- When cumulative estate-tax prepayments at death exceed actual estate tax owed, excess becomes a basis credit on inherited assets. Lives in the existing tax-basis architecture; no refund pipeline needed.
The Estate Tax Prepayment Plan filing is the audit basis for the rest of the architecture. The disclosed possessions are the contemporaneous record under penalty of perjury that no later valuation game can contradict — providing the foundation for estate-tax settlement, basis-step-up elimination, and the Institutional Investment Excise on related entities. False statement at one layer is independently tax fraud, and the disclosed records are evidence for every other instrument that touches the same wealth.
Why this won't fail like France's wealth tax (ISF)
France's Impôt Sur la Fortune (ISF) ran from 1989 to 2017 before President Macron abolished it. The reasons it failed are well-documented and frequently cited as evidence that wealth taxes don't work in modern economies. The Accord's Estate Tax Prepayment Plan architecture differs from ISF on every failure dimension — not by accident but by design. Each architectural difference addresses a specific ISF failure mode.
- Threshold (ISF: ~€1.3M / Accord: $10M individual)
- ISF caught upper-middle households who could relocate within the EU at low cost. The Accord targets only the top fraction of the top 1% — a population for whom relocation is materially more costly than for upper-middle households.
- Constitutional basis (ISF: direct wealth tax / Accord: estate-tax prepayment)
- ISF was a direct wealth tax with no prior constitutional precedent in the French context. The Accord uses Congress's plenary estate-tax authority (since 1916) and structures the prepayment as forward-collection of a future estate-tax liability — sitting in the same constitutional space as estate tax itself.
- Exit pricing (ISF: none / Accord: 38% exit tax + realization)
- France lacked an exit tax — and EU freedom of movement made relocation to Belgium / Switzerland / Luxembourg cheap. An estimated 40,000+ wealthy households left France during ISF's run. The Accord prices departure: 38% (pegged to the estate top rate) on net worth above the $10M exemption plus realization of accrued capital gains on assets converted to fund departure.
- International coordination (ISF: France acted alone / Accord: Alliance Incentive)
- France implemented ISF unilaterally; capital-flight destinations had no reciprocal pressure to align. The Accord's Alliance Incentive provides reciprocal market access for jurisdictions aligning tax floors with the architecture — narrowing the case for purely-tax-driven jurisdiction shopping.
- Compliance ramp (ISF: enforcement-first / Accord: disclosure window + enforcement)
- France relied on enforcement against an entrenched non-disclosure pattern. The Accord opens with a 36-month tapered disclosure window (Year 1: a 10% lifetime discount on the holder's bracket payment for eligible hidden-asset categories, no back tax, no penalties; Year 2: standard bracket rate plus back tax with interest, no penalties; Year 3: the same, no penalties) — encouraging compliance through a one-time onboarding ramp. Post-window, standard rates apply plus back tax plus interest and penalties on the Treasury enforcement schedule (magnitudes deliberately unspecified), plus estate-cannot-settle until reconciled.
- Layered enforcement (ISF: standalone / Accord: integrated audit basis)
- ISF stood alone, dependent on its own filings without cross-instrument verification. The Accord's Estate Tax Prepayment Plan filing is the audit basis for estate tax, basis-step-up elimination, and the Institutional Investment Excise on related entities. False statement at one layer is independently tax fraud — and disclosed records become evidence for every other instrument that touches the same wealth.
- Valuation (ISF: contested / Accord: standardized + interest-pricing)
- ISF valuation was a chronic enforcement problem. The Accord standardizes the valuation rule (existing bank/estate valuation infrastructure) and ties non-disclosure to compounding interest — making aggressive valuation games more expensive than honest reporting.
Wealth taxes are administratively unworkable. Valuation games for closely-held assets are intractable. Capital flight is real (France's ISF lost ~40,000 wealthy households 2002–2017 before Macron abolished it in 2017). And the Apportionment Clause arguably forbids a federal direct tax that isn't apportioned by population.
(a) Constitutional architecture. The estate-tax-prepayment framing relies on Congress's plenary estate-tax authority since 1916, not a new direct-tax authority. Forward-collection of a future estate-tax liability sits in the same constitutional space as estate tax itself — and the Court has not invalidated estate tax on Apportionment Clause grounds in over a century.
(b) Valuation. Closely-held-business and real-estate valuations are already done annually for the wealthiest filers (banks require them for collateral; estates require them at settlement). The architecture standardizes the valuation rule and ties non-disclosure to compounding interest — making aggressive games more expensive than honest reporting.
(c) Capital flight. France lacked an exit tax, lacked a peer-jurisdiction reciprocal-access network, and had EU freedom-of-movement making relocation trivial. The Accord prices departure: 38% exit tax (pegged to the estate top rate) on net worth above the $10M exemption plus realization of accrued gains on assets converted to fund departure. Alliance Incentive provides reciprocal market access for jurisdictions aligning tax floors. Together these change the math substantially. (See the wealth calculator for stay-vs-flight modeling.) The France ISF lessons are addressed in detail in the case-study section below.
(d) Compliance. The 36-month disclosure window creates a one-time, tapering path to come into compliance: Year 1, a 10% lifetime discount on the holder's bracket payment for eligible hidden-asset categories with no back tax and no penalties; Year 2, the standard bracket rate plus back tax with interest, no penalties; Year 3, the same plus back tax, no penalties. From Year 4 onward — or on discovery — standard rates apply plus back tax plus interest and penalties on the Treasury enforcement schedule (magnitudes deliberately unspecified), and estates cannot settle to heirs until reconciled. That makes hiding uneconomic.
Honesty about gaps. The Accord's credibility comes partly from explicit acknowledgment of what is not yet specified. The items below are flagged for v10.2 specification or for outside expert review.
- Filing testament procedure: the irrevocable-joint-ownership testament is a new administrative artifact. Form, custodian, revocation rules, and tax treatment of revocation pending v10.2 specification.