It’s important to monitor the good, bad and ugly proposals passing through the halls of Congress, especially those affecting family-owned businesses. On March 17, 2026, when members of Family Enterprise USA meet on Capitol Hill to support the Congressional Family Business Caucus, the “hot topic” legislative proposals will focus on affordability. Aptly, the meeting’s theme will be, “Pricing and Profits: Affordability Strategies for Family-Owned Businesses.”
Many proposed bills on Capitol Hill are focused on the affordability issue but are in the discussion phase behind closed doors. Most will fade, but some will gain oxygen and stay alive for votes this year or next — or never. That’s how it works here. At the state level, the proposals getting the most attention and oxygen are targeting the wealthy, with several “millionaire” or “billionaire” tax bills on the table.
Of the proposals put forward publicly, we know our Capitol Hill legislators are looking at policies ranging from expanded paid family leave, capital-gains tax relief and potential regulatory reforms. Some or all of these policies could be wrapped together in a new “sister” bill to last year’s H.R. 1 (the “One Big Beautiful Bill Act”) that many in Washington are calling “Reconciliation 2.0.” Our insiders, from law and government affairs firm Brownstein, see this potential bill as focusing heavily on proposals to address the affordability challenges facing families and family-owned businesses across the country.
One group of House members, who work together as the Republican Study Committee (RSC), has put forward a package of proposals — titled, “Making the American Dream Affordable Again” — that is focused on rising costs of energy, housing and health care.
The package also targets spending cuts and extending tax policies, codifying deregulation and strengthening energy production, among other goals. “Reconciliation 2.0 is the most powerful and potent legislative tool in the toolbox for us to fix what’s broken,” says Committee Chairman Rep. Jodey Arrington (R-TX), and former co-chair of the Congressional Family Business Caucus.
Here’s what the RSC says about the scope of its package of proposals:
Key Components of the Reconciliation 2.0 Framework
• Energy and Environment: Promoting American energy dominance by accelerating permitting and reducing regulations.
• Health Care: Reducing costs, increasing transparency and empowering consumers through health savings accounts.
• Economic and Social Policy: Extending tax cuts, eliminating marriage penalties in the child tax credit and addressing 401(k) contributions.
• Fiscal Responsibility: Implementing large-scale spending cuts, aiming to lower costs and targeting waste in federal programs.
These are worthy objectives for many family-owned businesses and some of the proposals could bring significant cost savings. But what are the odds of Reconciliation 2.0 actually being signed into law? Right now, with mid-terms looming, passing another party-line bill will be challenging. “While there are a lot of thoughtful proposals to address affordability challenges facing Americans, the reconciliation process is a long and complex road,” says Mark Warren, a shareholder at Brownstein. “With the extremely narrow vote margin in the House, the President will need to engage to ensure nearly unanimous support for passage of a second reconciliation bill.”
More on the Horizon
Meanwhile, the implementation of new state wealth taxes continues to cast its shadow over successful family-owned businesses and families. Several states continue to discuss a wealth tax, with California moving toward a ballot initiative for the November elections that would impose a one-time 5% tax on Californians with more than $1 billion in assets. Illinois is considering a similar billionaire wealth tax, while Rhode Island has a wealth-tax proposal targeting residents with financial assets of more than $25 million, with certain exceptions.
Other states like Washington, Virginia, Rhode Island, Hawaii and Michigan are proposing higher income tax rates or surcharges on high-income residents (e.g., annual income of more than $1 million per year). “When state legislatures or voters face a proposed wealth tax without significant public debate and analysis, wealth taxes stand a real chance of enactment,” says Russ Sullivan, who leads the tax policy practice at Brownstein. “The closer the voters examine the real impact — such as California billionaires moving to Florida — the chances of a wealth tax becoming law fade.”
Some of these proposals seek to tax unrealized gains and live in the shadow of the “Billionaires Income Tax Act,” first introduced in Congress by Senator Ron Wyden (D-OR), which has now also been introduced in the House of Representatives.
We’ve compiled a chart (Family Enterprise USA Wealth Tax Status) of the latest news from key states. Here are a few highlights:
• California: Voters may see a “Billionaire Tax Act” on the ballot in November, which would impose a 5% tax on certain assets of individuals/trusts valued over $1 billion.
• Washington: The legislature is actively pursuing a 9.9% income tax on high earners with income above $1 million, on top of its current 7% tax on capital gains.
• Illinois: Legislation is under consideration to impose an unrealized-gains tax on billionaires, although the proposal would face obstacles under the state constitution.
• Virginia: The legislature has several proposals under consideration to impose higher marginal tax rates on high-income earnings as well as a proposed 3.8% tax on net investment income.
Other proposals to watch are centered around implementing new incentives to encourage businesses to provide paid leave for employees, indexing capital gains, repealing the federal estate tax, taxing unrealized gains and adding/modifying regulations in ways that will increase compliance costs for businesses.
Advocating for family-owned businesses in Washington and state capitals across the U.S. is a full-contact sport. In 2026, we must engage and defeat tax proposals discouraging successful entrepreneurs from taking economic risks that create jobs and improve communities across the country.