Wealth Tax News – 4/24/2026

This week’s developments show continued momentum behind efforts to tax high earners, with California’s billionaire-tax fight continuing to intensify, New York advancing a pied-à-terre proposal, and states such as Washington and Maine moving forward with new taxes on millionaires.

California

In California’s Wealth-Tax Fight, You Can Make $30,000 Collecting Signatures – Bloomberg

California’s proposed wealth tax has started a costly fight, with labor unions supporting the measure and tech figures funding rival initiatives to block new taxes. Campaigns are pouring millions into gathering signatures to qualify for the ballot, paying circulators up to $15 per signature and drawing workers from across the country who can earn tens of thousands of dollars.

Is California trying to tax your savings? Campaign may stir confusion – San Francisco Chronicle

Building a Better California is pushing three ballot initiatives, including the “Retirement and Personal Savings Protection Act,” to block or undermine SEIU’s proposed wealth tax. The PAC’s messaging implies broad middle-class tax savings, but the measure would ban future state taxes on personal property ownership (e.g., financial assets, business interests) post-Jan. 1, 2026, while sparing income taxes or real estate. Complementary initiatives mandate Prop 98/Gann limit compliance for new taxes (redirecting funds to schools/refunds) and pre-ballot audits for special taxes. If conflicting measures pass, the highest yes-vote prevails. Critics are calling them “revengements” to frustrate voters, amid signature drives for November.

California’s billionaire tax referendum in November is self-defeating – The Washington Post

George F. Will warns that California’s proposed wealth tax would trigger severe unintended consequences, including an exodus of the rich, who provide 40% of state income tax revenue, already costing over $550 billion in targeted assets per a Hoover Institution analysis, with net present value turning negative as lost ongoing taxes exceed projected $40 billion one-time gains (far below advocates’ $100 billion). Legally vulnerable as potential takings, due process violations, or bills of attainder, he argues, the proposed wealth tax risks paving the way for recurring levies by lifting intangible property tax caps, while eroding economic mobility, federalism’s incentives for low-tax states, and individual liberty through intrusive government valuation of all assets.

Ongoing State Tax Revenue Implications of the 2026 California Billionaire Tax Act – California Tax Foundation

The report argues that California’s wealth tax proposal could reduce ongoing state revenue by about $3.53-$4.49 billion a year if wealthy residents leave and take future income tax payments with them. It says the biggest losses would come from reduced income tax collections, with smaller hits from sales taxes and broader economic spillovers, and warns that the long-term revenue loss could exceed the tax’s one-time gain.

Viewpoint: Billionaire tax would hurt California’s nonprofits – San Francisco Business Times

California’s wealth tax proposal risks eroding local philanthropy, as data shows donors, especially affluent ones, overwhelmingly support home-state causes: 79% of high-net-worth gifts stay local per a 2025 Bank of America study, and from 2000-2016, California donors directed 74% of $1M+ gifts’ value in-state. Billionaires already exiting would likely redirect giving to new communities due to fading ties and California’s aggressive “closest connections” residency test, which could consider ongoing California-focused philanthropy as proof of retained residency, and exposing them to the proposal and future income taxes they wanted to escape.

New York City

New York Governor Hochul Proposing Tax on Second Homes Worth $5 Million or More – WSJ

Gov. Kathy Hochul (D) is proposing an annual surtax on NYC second homes (pieds-à-terre) valued at $5 million or more to generate an estimated $500 million yearly to help close the city’s budget gap over two years. The measure, backed by Mayor Zohran Mamdani (D), would spare primary residences and rentals but has drawn real estate industry opposition, which warns it could stifle investment, cut construction jobs, lower property values, and fail to deliver projected revenue.

Hochul’s pied-à-terre plan hasn’t silenced tax-the-rich calls – POLITICO Pro

Gov. Hochul’s pied-à-terre tax proposal remains insufficient for progressive Democrats, unions, and advocates who are demanding broader increases on incomes over $5 million and corporations to offset federal cuts under the OBBBA and address affordability issues. Unions like District Council 37 are asking legislative leaders for these tax increases during delayed state budget talks while the targeted $500 million surtax mainly helps NYC’s budget gap but leaves larger unmet needs.

Washington

Public records show WA’s millionaires’ tax crafted to overturn 1933 income tax ruling – My Northwest

In documents obtained by The Center Square, Washington lawmakers and Attorney General’s office collaborated to craft a new 9.9% millionaires tax on incomes over $1 million as a test case to overturn a 1933 state Supreme Court ruling classifying income as property and barring broad income taxes. Senate Majority Leader Jamie Pedersen (D) aimed to force judicial reconsideration, likening it to anti-Roe v. Wade laws, while defending dual goals of revenue and legal precedent change. The tax, signed by Gov. Bob Ferguson (D), now faces lawsuits from critics like former WA Attorney General Rob McKenna, who argue it violates uniformity and 1% cap requirements under state constitution.

Maine

Wealth-Tax Fever Is Spreading to Less-Wealthy States – WSJ

Maine has joined a growing group of Democratic-led states adopting or considering taxes on high earners, enacting a 2% surcharge on income over $1 million to raise revenue for public services. Supporters argue the tax will fund education, healthcare, and property tax relief, while critics warn it could drive away wealthy residents and hurt small businesses.

Massachusetts

Massachusetts ‘millionaires tax’ cost the state $4 billion in departing income – Illinois Policy Institute

An analysis by the Illinois Policy Institute found that Massachusetts’ 2022 millionaires tax, a 4% surtax on income over $1 million, coincided with a net loss of over 30,000 residents and $4.18 billion in adjusted gross income (AGI) from 2022-2023, per new IRS data, with high earners driving most of the departures. Those making $200,000+ accounted for 28% of departing individuals but 70% of the lost AGI, the highest share for that group since IRS tracking began in 2011, highlighting the policy’s disproportionate impact on the state’s revenue base despite collections from those who stayed. Critics link this to the shift from a flat to progressive tax structure, warning of similar risks for states like Illinois eyeing comparable hikes.

Illinois

Millionaire tax amendment fails to gain enough support from House Democrats – NPR Illinois

The Illinois millionaire tax proposal on incomes over $1 million failed to advance in the House, lacking the 71 Democratic votes needed for a supermajority before the May 3 deadline to reach the November ballot. House Speaker Emanuel “Chris” Welch acknowledged it was “very close” but required more work amid concerns over voter trust, revenue allocation splits between property tax relief and K-12 education, and skepticism from businesses and Gov. JB Pritzker (D).

Some Illinois lawmakers want to tax millionaires to raise revenue – The State Journal Register

Illinois lawmakers are negotiating the FY2027 budget during better than expected FY2026 revenue growth of $1.5 billion through March, though uncertainties under President Trump’s F2027 budget emerge. Progressive Democrats, including House Speaker Emanuel Welch, are pushing for a constitutional amendment referendum by May 3 to enable a millionaires tax on income over $1 million. The measure would split revenue between property tax relief and schools, despite past voter rejection of graduated taxes in 2020 and Gov. Pritzker’s lower priority on it.

Other

Wealth, millionaire tax push spreads to more states: What experts say – CNBC

Democratic-led states like Massachusetts, Washington, and Maine have enacted millionaire taxes, while California eyes a proposal, New York proposes a pied-à-terre levy on luxury second homes over $5M, and others like Rhode Island debate increases amid fiscal pressures and inequality concerns. Polls show ~60% of the public think the wealthy don’t pay their fair share of federal income taxes, but the Tax Foundation warns of revenue volatility from mobile high-earner income (business/capital gains), asset shifts, and capital flight to low-tax states.

Reeves Reaps More Than £30 Billion From Higher UK Wealth Taxes – Bloomberg

The UK collected over £30 billion ($40.5 billion) in tax revenue during the 2025-26 cycle, up nearly 40% from the prior year, contributing to the lowest budget deficit since the Labour Party took power in 2024. Capital gains tax receipts surged £8.5 billion to £22.2 billion as taxpayers rapidly sold assets before the rate increases from 10% to 14% in 2025 and 18% in 2026, alongside cuts to business tax cuts. The inheritance tax added nearly £8.5 billion amid frozen thresholds. UK Chancellor Rachel Reeves also introduced a “mansion tax” surtax on homes over £2 million from 2028 and VAT on private school fees but rejected broader wealth taxes despite pressure from the left wing of the party.

EU Study Finds Wealth Taxes Workable If Designed Correctly – Bloomberg Law

A European Commission-backed study found that wealth taxes could be effective in raising revenue and reducing inequality in the EU if designed properly. The report concludes that these types of taxes work best when narrowly targeted at the very wealthy, use high thresholds, and rely on broad tax bases with clear, enforceable valuation rules, pointing to Switzerland as a model. It also highlights current gaps, such as inconsistent inheritance rules, exemptions, and weak enforcement, that allow many wealthy individuals to avoid taxes, and recommends stronger reporting systems, asset registers, and coordination across countries to improve effectiveness.

Wealth Taxes Target The Rich But Often Miss Their Mark – Bloomberg

Bloomberg’s Editorial Board argues that wealth taxes have largely failed in practice across countries like France, Germany, Sweden, and now under consideration in Denmark, New York, and California, due to high administrative costs, easy avoidance, and capital flight. They require contentious asset valuations and punish illiquid holdings, prompting people to relocate, taking jobs and economic activity with them, as seen in Norway. Better alternatives include consistent capital gains taxation upon realization, taxing wealth transfers at death (closing step-up basis loopholes), and targeting assets like land and real estate, which avoid exporting capital while broadening the base more effectively.

Why a wealth tax doesn’t work – Opinion – Deseret News

The author argues that wealth taxes enjoy public support amid state budget deficits but often prove ineffective. Recent IRS data shows high-tax states like California and New York are hemorrhaging income to low-tax states, echoing critics views of wealth taxes due to low revenue, high costs, capital flight, and economic drag. Critics like tax expert Daniel J. Pilla warn such taxes punish success by taxing accumulated property post-income taxes.

Wealth Tax Movement Boosts Appeal of Tax-Exempt Municipal Bonds – Bloomberg

Democrats’ push for higher taxes on the wealthy in states like Washington, Maine, and others is boosting demand for tax-exempt municipal bonds. Analysts expect this to drive stronger in-state buying, lowering yields for issuers in affected states—such as Washington’s market, where taxable-equivalent yields could rise 1.16%. While Massachusetts’ millionaires tax has generated over $6 billion and tightened municipal spreads, opponents warn of capital flight.

Family Enterprise USA Action engages with legislators on Capitol Hill on behalf of family offices, successful families, and family-owned businesses. It is focused exclusively on the critical tax and economic policies that impact them. Since 1995, FEUSA Action has been the leading advocacy group working daily in Washington, D.C., to reduce and eliminate estate tax, gift tax, and generation skipping transfer tax while blocking increased income and capital gains taxes, the creation of a wealth tax, and other hostile policies that punish hardworking taxpayers and success in the U.S. It is a bipartisan 501.c4 organization.

#incometax #CapitalGainsTax #R&DExpensing #DontPunishSuccess #GrantorTrusts #likeKindExchanges #AcceleratedDepreciation #EstateTax #Deathtax #wealthtax #taxLegislation #incometaxrates #repealestatetax #FamilyOffice #SuccessfulFamilies @PolicyAndTaxationGroup @DitchTheEstateTax #PolicyAndTaxationGroup #DitchTheEstateTax #FamilyEnterpriseUSAAction