Wealth Tax News – 5/15/2026

This week’s wealth tax debate continued to intensify across the federal and state landscape, with developments spanning California’s proposed billionaire tax, Washington’s new millionaires tax, Rhode Island’s high-earner surtax, New York City’s proposed second-home levy, and broader federal arguments over how best to tax concentrated wealth.

This week’s articles show that taxes on billionaires, millionaires, and high-value second homes are now a visible part of the political conversation, not only as revenue tools but also as flashpoints in broader debates over fairness, economic growth, and whether high-income taxpayers will stay, pay, or leave.

Please find summaries of relevant articles with web links below. 

Federal

Presidential Hopeful Ro Khanna Turns His Back on Silicon Valley Tech Scions – Bloomberg
Rep. Ro Khanna (D-CA) has embraced California’s proposed wealth tax as part of a broader response to rising inequality and backlash against concentrated tech wealth, positioning it as a way to “save capitalism from itself.” Bloomberg highlights how these proposals create tension with Silicon Valley, where critics argue wealth taxes could spur capital flight and alienate investors.

Can a billion dollars be ‘earned?’ AOC says it’s not possible  – USA Today
Rep. Alexandria Ocasio-Cortez (D-NY) argued in a podcast interview that billion-dollar fortunes are not truly “earned” but reflect systemic inequality, suggesting extreme wealth accumulation stems from market power and structural advantages rather than individual merit. She linked her comments to rising wealth concentration now at historic highs, and said many Americans wrongly internalize economic struggles as personal failure due to a cultural narrative that equates wealth with virtue.

ITEP Suggests Using the Corporate Tax to Target the Rich – Tax Notes
The Institute on Taxation and Economic Policy published a report arguing that strengthening the corporate tax is a more durable strategy for taxing the wealthy than alternatives like wealth taxes or taxes on unrealized capital gains. Steve Wamhoff, the report’s author, says that corporate tax policy is more resilient because it faces fewer legal vulnerabilities and less frequent political reversal compared to individual income tax rates, which have fluctuated significantly across different administrations. ITEP recommends raising corporate tax rates for the largest companies, subjecting certain pass-through entities to corporate taxation, and adopting the OECD global minimum tax. The report also notes that while four Supreme Court justices signaled opposition to taxing unrealized gains in Moore v. United States (2024), the Court has never challenged Congress’ constitutional authority to tax corporations, which was affirmed in Flint v. Stone Tracy Co. (1911). Supporters argue that a global minimum tax would discourage future Congresses from cutting corporate rates, since any forgone revenue would simply be collected by other participating countries instead.

Plotting the comeback – Weekly Tax POLITICO
Progressive groups, including Tax the Greedy Billionaires Action, Americans for Tax Fairness Action Fund, Patriotic Millionaires, and P Street, argue that redistricting has made Democrats’ path back to a House majority more difficult. They support doubling down on a populist tax-the-rich message and reference recent polling showing that raising taxes on billionaires and taxing extreme wealth is one of the most popular policy approaches with voters.

California

Contributor: Yes, billionaires must pay a wealth tax to save healthcare and democracy – Los Angeles Times
In this opinion piece, Sen. Bernie Sanders argues that a 5% wealth tax on billionaires is necessary to address extreme wealth inequality and fund healthcare and other social programs. He says that a small group of ultra-wealthy individuals has accumulated massive gains while most Americans struggle, and that taxing their wealth would generate significant revenue to support working families and counter what he views as an undemocratic concentration of economic power.

Progressives’ Big Dilemma in the California Governor’s Race – New York Magazine
New York Magazine highlights a growing strategic challenge for progressives in California’s governor’s race as they consider whether former Rep. Katie Porter or Tom Steyer should lead their movement. Porter leans on her populist credentials while attacking Steyer’s fortune built in part on fossil fuels and criticizing the design of the high-profile wealth tax that he supports as poor tax policy. Steyer, meanwhile, is spending heavily to brand himself as a “class traitor” championing single-payer healthcare, aggressive climate measures, and higher taxes on the rich, gaining key progressive endorsements.

Billionaire Tom Steyer faces wary voters in run for California governor – The Washington Post
Tom Steyer’s California gubernatorial campaign highlights a central tension for Democratic voters on whether they can trust a billionaire to address affordability and inequality. While Steyer promotes progressive policies, self-funding his campaign and supporting higher taxes on the wealthy, many voters have remained skeptical that someone so rich can relate to everyday financial struggles. On the campaign trail, he faces frequent questions about his wealth and past investments, even as some voters are persuaded by his climate advocacy, philanthropy, and independence from corporate donors. In a crowded race, Steyer’s candidacy is effectively testing whether voters will overlook their distrust of billionaires if they view him as aligned with working-class interests.

Two Takes: Should California pass a billionaire’s tax? – San Francisco Chronicle
Enrico Moretti, a UC Berkeley economics professor, and Darien Shanske, a UC Davis law professor, offer opposing views on California’s proposed one-time 5% billionaire tax. Shanske, who co-authored the tax measure, argues that billionaires pay disproportionately less than middle-class earners because most of their wealth goes untaxed, and the tax is urgently needed to offset federal healthcare cuts that have already resulted in layoffs. He emphasizes the tax includes payment plans and deferral options, and dismisses fears that billionaires will flee the state. Moretti argues that the tax will drive wealthy residents and future entrepreneurs away, citing his research showing one in five billionaires leave states that impose estate taxes. He warns that California’s already high tax rates make it vulnerable to losing startup founders to states like Texas and Florida, which would cost far more in long-term economic activity and tax revenue than the wealth tax would generate. While Moretti supports taxing the ultra-wealthy, he argues it should be done at the federal level where relocation is harder.

Rhode Island

Fight over proposed millionaires tax in RI heats up – The Providence Journal
Rhode Island’s proposed millionaires tax is at a crossroads as lawmakers weigh the policy against an unexpected $233 million revenue windfall. Opponents argue that higher taxes could drive wealthy residents away and are unnecessary given current finances. Supporters say that new revenue is still needed to offset federal funding cuts and fund key programs, pushing for increased surtaxes on high earners as part of long-term fiscal planning.

Rhode Island High-Earner Surtax Would Hurt Small Businesses – The Tax Foundation
In her testimony for a hearing with the Rhode Island legislature, Katherine Loughead, Director of State Projects at the Tax Foundation, warned that House Bill 7313, which would impose a 3% surtax on taxable income over $640,000 starting January 1, 2027, would significantly harm the state’s economy and competitiveness. The surtax would raise Rhode Island’s top marginal income tax rate to 8.99%, making it the 10th highest in the nation and dropping the state’s tax competitiveness ranking from 40th to 41st overall. Loughead emphasized that the tax increase would disproportionately affect small businesses, as 55.6% of Rhode Island filers earning over $500,000 have pass-through business income, and approximately 75 percent of the state’s pass-through business income is earned by those with incomes of $500,000 or more. She cited research showing that higher marginal income tax rates reduce economic growth, investment, employment, and wages—even for workers not directly subject to the surtax—while encouraging outmigration. The proposal would also undermine Rhode Island’s regional competitiveness, making it less attractive than Massachusetts (which taxes income under $1.1 million at just 5 percent) and placing its marginal rate on $640,000 of income higher than New Jersey, Vermont, Maine, New York, and Massachusetts. Loughead noted that 23 states have reduced income tax rates since 2020, lowering the national median top rate from 5.4% to 4.7%, while only five states and D.C. have raised rates during that period.

Washington

Group launches petition to overturn state millionaires tax before it takes effect – KOMO News
Washington’s new millionaires tax is facing a repeal effort before it takes effect. A conservative group called “Let’s Go Washington” has launched a ballot initiative. The group argues that the tax could drive out high earners, expand over time to lower-income groups, and require a costly new administrative system. While the tax is projected to raise about $2 billion annually for programs like sales tax exemptions, opponents are mobilizing to gather signatures to put repeal on the ballot.

Millionaires tax architect dismisses ‘wealth exodus’ fears – FOX 13 Seattle
WA State Sen. Jamie Pedersen (D) is defending Washington’s new millionaire tax as a way to make the state’s tax system less regressive, while downplaying concerns that it will drive wealthy residents out and noting that business groups are more focused on estate taxes and sales taxes on services. He is facing criticism and legal challenges after emails revealed coordination with the Attorney General’s office to frame the tax as an excise tax and include a clause limiting voter referendum. Pedersen argues the tax is constitutional and similar to other state taxes, says revenues will help offset B&O taxes and cut some sales taxes, and acknowledges that future legislatures could revisit thresholds or broader reforms as part of a larger tax overhaul.

Washington wants to know: Do millionaires leave states with targeted high earners’ taxes? – KOMO News
Washington’s millionaires tax has reignited debate over whether high-earner taxes drive wealthy residents out, with critics pointing to outmigration data from states like Massachusetts. Supporters highlight strong revenue gains and limited evidence that taxes are the primary cause of moves. Experts suggest the real-world impact is mixed, with some high earners considering relocation or tax planning strategies, but many ultimately staying due to business ties and other factors.

New York City

NYC Second-Home Tax Proposal Stalls With Key Questions Unanswered – Bloomberg
New York lawmakers are struggling to design the proposed “pied-à-terre” tax. While politically appealing as a way to target wealthy nonresidents without raising broad taxes, the plan faces major hurdles, including unclear tax structure and rates, inconsistent property valuation methods, difficulty identifying true owners (often hidden behind LLCs), and coordination challenges between state and city agencies.

NY Real Estate, Business Groups Lobby to Defang Second Home Tax – Bloomberg Law
New York’s proposed “pied-à-terre” tax on second homes over $5 million has drawn pushback from real estate and business groups, which see it as the first step toward broader tax increases on wealthy residents. While Gov. Kathy Hochul (D) and legislative leaders support the measure to help close a multibillion-dollar budget gap, industry advocates warn it could deter investment, freeze high-end property transactions, and ultimately reduce other tax revenues. They are lobbying to scale back or add exemptions, arguing the policy could worsen New York’s business climate and accelerate capital flight, even as some lawmakers say it is unlikely to significantly impact development.

The Red-Blue Economic Divide – WSJ
Kimberyl Strassel, a member of the WSJ Editorial Board, argues that a widening economic divide between red and blue states is playing out in real time, with lower-tax, business-friendly states like Florida attracting people and investment while high-tax states like New York lose both. While referencing the online fight between Mayor Mamdani and Citadel founder Ken Griffin, Strassel says that progressive tax policies, such as proposed taxes on wealthy residents and second homes, discourage business activity and accelerate outmigration. She adds that states with lower taxes and fewer regulations are seeing stronger growth, job creation, and population gains.

Trump Praises Griffin, Warns Mamdani Not to ‘Tax People Out’ – Bloomberg Government
President Trump warned Mayor Mamdani not to “tax people out of New York” during a radio interview, saying the city cannot afford to lose wealthy figures like Ken Griffin. Trump cautioned that taxing high earners leads to permanent departures and warned it could devastate the city and state, though he also called Mamdani a “nice person” despite previously labeling him a “communist.” On the same day, Mamdani dropped plans for a broader property tax hike, though his second-home tax proposal remains.

Maine

Maine Democratic gubernatorial candidates split on 2nd-home tax – Bangor Daily News
Maine’s Democratic gubernatorial candidates largely agreed on major policy issues but split sharply over a proposal to impose higher property taxes on out-of-state second-home owners, with some backing a constitutional amendment to allow it and others warning it would be legally difficult and politically impractical. Supporters argued it would shift more of the tax burden onto wealthy homeowners. Opponents favored alternative revenue options like taxing gambling, cannabis, or high earners.

Other

Wealth Taxes Are Rich in Appeal, Poor in Practice – Bloomberg
Tobin Harshaw argues that while frustration over inequality and rising living costs makes wealth taxes politically appealing, they are often impractical and potentially counterproductive. He highlights that high earners contribute a large share of tax revenue but are increasingly mobile, meaning aggressive taxation can drive them—and their tax base—to lower-tax states like Florida. Citing various commentators, the piece contends that wealth taxes are difficult to administer, may yield less revenue than expected, and risk unintended consequences, including capital flight and distorted incentives. Harshaw suggests that focusing solely on taxing the rich overlooks deeper structural issues like wage stagnation, and that fairness alone is not a sufficient strategy for sustainable public finance.

Schrager: Taxing wealthy won’t limit power – The Columbian
In this column, Allison Schrager argues that wealth taxes are poor tax policy that risk reducing growth without actually curbing the power of the rich. She says that such taxes are hard to administer, distort investment and entrepreneurship, and simply shift power from billionaires to government bureaucrats rather than addressing underlying institutional weaknesses or resentment over inequality. Instead, she adds that tax policy should focus on efficiently raising revenue with minimal economic distortions, while concerns about concentrated wealth and power are better tackled by strengthening institutions and restoring public trust.

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.

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