The Millionaire Tax Movement Is Growing: What Business Owners and High-Income Taxpayers Should Know

State and federal tax proposals targeting high-income earners, high-value property owners, and ultra-high-net-worth households are gaining attention across the country.

These proposals do not all work the same way. Some are income surtaxes. Others focus on net worth, real estate transfers, luxury second homes, or high-value property. Some have already been enacted, while others are still moving through legislatures, courts, or ballot processes.

For business owners, investors, and high-income taxpayers, the key takeaway is not that every proposal will become law. It is that tax policy aimed at higher-income and higher-asset households is changing quickly, and the impact can vary significantly by state.

California: Billionaire Wealth Tax Proposal Moves Through the Ballot Process

California is considering one of the more aggressive wealth-tax proposals in the country. The proposed Billionaire Tax Act, as originally introduced, would impose a one-time 5% tax on the net worth of individuals whose wealth exceeds $1 billion. However, aspects of the proposal have been subject to revision and ongoing debate as it moves through the ballot process.

Supporters have framed the proposal as a way to fund health care and other public programs. Critics argue that a state-level wealth tax could encourage high-net-worth residents to relocate and could create valuation and administration challenges.

Because this proposal remains part of the ballot process, taxpayers should treat it as a development to monitor rather than an enacted tax.

Maine: Millionaire Surcharge Signed Into Law

Maine has moved from proposal to law. The state approved a 2% income tax surcharge on taxable income above $1 million for individual filers and above $1.5 million for joint filers and heads of household.

The surcharge is expected to raise substantial revenue for state programs. For affected taxpayers, it also means Maine’s top effective state income tax rate is increasing for income above the new threshold.

Illinois: Millionaire Tax Proposal Stalls

Illinois considered a constitutional amendment that would have allowed voters to approve an additional 3% tax on income above $1 million.

That effort did not gain enough support in the Illinois House, making it unlikely to appear on the November 2026 ballot. For now, the proposal appears stalled rather than active law.

New York: Pied-a-Terre Tax Debate Targets Luxury Second Homes

New York’s current debate focuses less on income and more on high-value second homes in New York City. Gov. Kathy Hochul has supported a pied-a-terre tax proposal aimed at certain luxury second homes, with early public descriptions focusing on properties valued at $5 million or more.

The proposal is intended to help New York City raise revenue from ultrawealthy nonresident property owners. However, details around valuation, eligibility, and implementation have continued to develop, and critics have warned that the proposal could lead to legal challenges and property valuation disputes.

At this stage, taxpayers should view the proposal as a pending policy issue, not a final tax rule.

Washington: New Millionaires Tax Enacted, Legal Challenges Expected

Washington has enacted a new 9.9% tax on Washington taxable income above $1 million, scheduled to take effect in 2028.

This is a significant development because Washington has historically been known for not imposing a traditional personal income tax. Supporters argue that the tax will help fund public services and re-balance the state’s tax structure. Opponents have challenged the law, arguing that it conflicts with Washington’s constitutional treatment of income and property.

Because litigation is expected, taxpayers with Washington connections should monitor both the effective date and the legal outcome.

Massachusetts: Existing Millionaire Surtax Remains a Major Test Case

Massachusetts already has one of the most closely watched high-income surtaxes in the country. Since tax year 2023, the state has imposed an additional 4% surtax on taxable income above the annual threshold.

Revenue from the surtax is dedicated to education and transportation. The law remains a useful comparison point for other states because it shows how a voter-approved high-income surtax can move from proposal to implementation.

Oregon: Wealth Tax Proposal Could Reach Voters

Oregon may become another state to consider a wealth-tax-style proposal at the ballot box. A proposed initiative would impose a 2% tax on assets for individuals with $30 million or more in assets.

The proposal is still in the initiative process, so it has not become law. However, it reflects a broader trend of proposals that focus on accumulated wealth rather than annual income alone.

Vermont: Lawmakers Consider Higher Taxes on Top Earners

Vermont lawmakers have discussed proposals to raise taxes on the state's highest earners, including ideas that would create a new top income tax bracket and increase taxes on certain investment income.

These proposals remain under debate; none have been enacted. If enacted, they could put Vermont among the states with some of the highest top marginal income tax rates in the country.

Connecticut: Advocates Continue to Push Wealth-Tax Ideas

Connecticut has not enacted a new millionaire or billionaire tax this year, but advocacy groups and some lawmakers continue to push for higher taxes on wealthy residents.

Current discussions have included proposals involving higher top income tax rates, high-value property, and broader tax reform. At this point, these efforts should be viewed as policy proposals rather than enacted law.

Maryland: Billionaire Wealth Tax Proposal Introduced

Maryland lawmakers have considered House Bill 1238, which includes a one-time wealth tax on a resident’s net worth above $1 billion, along with additional tax provisions affecting certain ultra-high-net-worth taxpayers. The proposal would direct proceeds to a state investment and stabilization fund.

The bill has been introduced and reviewed through the legislative process, but it has not been enacted. Like other wealth-tax proposals, it raises questions about valuation, administration, enforcement, and taxpayer mobility.

Rhode Island: Second-Home Surcharge Scheduled to Begin

Rhode Island has enacted a high-end second-home surcharge often referred to as the “Taylor Swift Tax,” because of the singer’s well-known vacation property in the state.

Beginning July 1, 2026, certain non-owner-occupied residential properties valued at $1 million or more are subject to an additional annual charge. The law generally targets properties that are not used as a primary residence and are used fewer than 183 days per year, with exceptions for qualifying rentals and primary residences.

This is an example of how states are also using property-based taxes, not only income taxes, to target high-value assets.

New Jersey: Mansion Tax Structure Expanded

New Jersey has already expanded its mansion tax structure for high-value real estate transactions. The state moved from a flat 1% fee on certain transactions over $1 million to a tiered system, with higher rates applying as transaction values increase.

For transactions above $3.5 million, the rate can reach 3.5%. The changes also shifted the burden to sellers for covered transactions, which can affect negotiations, pricing, and closing costs.

Hawaii: High-End Property and Tax Proposals Remain in Debate

Hawaii lawmakers have considered several tax proposals aimed at high-value property, capital gains, and higher-income taxpayers. Local discussions have also included higher property taxes on expensive homes to support housing and homelessness programs.

Several state-level proposals have stalled or remained under debate, so taxpayers should avoid treating these ideas as final unless a specific local or state measure has been enacted.

Federal Level: Ultra-Millionaire Tax Reintroduced

At the federal level, lawmakers have renewed efforts to tax ultra-high-net-worth households. The reintroduced Ultra-Millionaire Tax Act would apply an annual wealth tax to fortunes above $50 million, with a higher rate on wealth above $1 billion.

The proposal faces significant political and legal hurdles, but it remains part of the broader national conversation around wealth taxation and high-income tax policy.

What This Means for Taxpayers

The phrase “millionaire tax” now covers a wide range of policies, including income surtaxes, wealth taxes, mansion taxes, second-home taxes, and luxury property surcharges.

That distinction matters. A taxpayer may be affected by one proposal because of annual income, another because of net worth, and another because of real estate ownership. The rules can also depend on filing status, residency, property use, asset location, and whether the law is already effective or still being challenged.

For business owners and high-income taxpayers, the practical step is to stay proactive. State tax policy can change quickly, and proposals that seem distant can become planning issues once they reach a ballot, pass a legislature, or trigger residency and asset-location questions.

Final Thought

Not every millionaire-tax or wealth-tax proposal will become law. Some will stall, some will be revised, and some may face court challenges.

Even so, lawmakers in several states continue to explore taxes aimed at high-income households, high-value assets, and luxury real estate as potential revenue sources.

State tax policy is changing quickly. For taxpayers with significant income, substantial investments, high-value real estate, or multi-state business activity, these developments are worth monitoring before they become planning issues. Staying informed can help avoid surprises and create opportunities to evaluate residency, asset ownership, and long-term tax strategies before changes take effect.