{"id":43273,"date":"2026-04-23T17:13:57","date_gmt":"2026-04-23T17:13:57","guid":{"rendered":"https:\/\/financialrush.com\/?p=43273"},"modified":"2026-04-23T17:13:57","modified_gmt":"2026-04-23T17:13:57","slug":"wealth-millionaire-tax-push-spreads-to-more-states-what-experts-say","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=43273","title":{"rendered":"Wealth, millionaire tax push spreads to more states: What experts say"},"content":{"rendered":"

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Tax The Rich political rally hosted by the Democratic Socialists of America and featuring Senator Bernie Sanders, March 29, 2026, at Lehman College in New York City.<\/p>\n

Andrew Lichtenstein | Corbis News | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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More Democratic states are embracing higher taxes on the wealthy<\/a> amid increased fiscal pressures<\/a>. But these policies could cause future revenue issues, experts say.\u00a0<\/p>\n

“Progressive taxation<\/a>,” or paying higher rates<\/a> as income rises, isn’t new or surprising, said Jared Walczak, a senior fellow at the Tax Foundation, a nonprofit think tank.<\/p>\n

In 2023, the average income tax rate was 14.1%, while the top 1% of taxpayers paid 26.3% on average<\/a>, according to a Tax Foundation analysis of the latest IRS data.<\/p>\n

But there’s an increasing focus on generating more revenue from the top earners and\u00a0the\u00a0highest-net-worth individuals, Walczak said, “and there’s fundamentally a challenge with this.”<\/p>\n<\/div>\n

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Read more CNBC personal finance coverage<\/h2>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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In 2022, Massachusetts voters approved a 4% tax<\/a> on annual income above $1 million, and Washington in late March enacted a millionaires’ tax<\/a>, which applies a 9.9% levy to residents who make more than $1 million per year. Maine in April also added a surcharge of 2%<\/a> on yearly earnings above $1 million. <\/p>\n

In recent years, there have also been income tax hikes<\/a> on higher earners in the District of Columbia and states such as Maryland and New York, according to tracking published in February from the Center on Budget and Policy Priorities. <\/p>\n

State tax hikes on the wealthy have also been floated in places like California<\/a>, Rhode Island, Virginia and others. <\/p>\n

Last week, New York City Mayor Zohran Mamdani and New York Governor Kathy Hochul proposed a “pied-\u00e0-terre tax,”<\/a> which would levy a yearly surcharge on empty second homes in New York City worth more than $5 million.<\/p>\n<\/div>\n

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As momentum builds for higher taxes on top earners in some states, others have aggressively cut income taxes, according to Lucy Dadayan, a principal research associate at the Urban-Brookings Tax Policy Center. <\/p>\n

“We are seeing a divergence in state tax policies,” she said.<\/p>\n

Since 2021, more than 20 states \u2014 the majority of those with individual income taxes \u2014 have reduced top marginal rates<\/a>, while a handful of states and the District of Columbia have raised them, according to a February report from the Tax Foundation.<\/p>\n

This shows “different fiscal priorities and different approaches to economic growth,” Dadayan said. <\/p>\n<\/div>\n

Support for higher taxes on the wealthy<\/h2>\n
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Recent data suggests support among certain Americans for tax increases on the wealthy. <\/p>\n

“We’re in a much more populist political environment right now \u2014 on the left and the right \u2014 and this rhetoric works,” said Walczak.<\/p>\n

Roughly 60% of U.S. adults said they feel the wealthy “don’t pay their fair share”<\/a> of federal income taxes, according to a Pew Research Center survey that polled about 8,500 in late January. <\/p>\n

Another survey, from Fox News, found the top concern about federal income taxes was the “wealthy are not paying enough.”<\/a> The company polled 1,000 registered voters in late March.<\/p>\n

The Fox News survey found the issue ranked highest among Democratic and independent voters, while Republicans were more concerned by government spending.<\/p>\n

Meanwhile, a minority of taxpayers from both parties said they were open to higher taxes on the wealthy<\/a> to address the federal budget deficit, according to a separate survey from the Bipartisan Policy Center. The nonprofit think tank polled 1,200 taxpayers in late March.\u00a0<\/p>\n<\/div>\n

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The problem with taxing the wealthy <\/h2>\n
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While many Americans support higher taxes on the ultrarich, federal proposals have failed to gain traction<\/a>.\u00a0<\/p>\n

Tax hikes on the wealthy aren’t likely to happen amid Republican control of Congress and the White House, policy experts say. But several Democratic lawmakers have floated <\/a>new proposals<\/a> to raise taxes ahead of the midterm elections.<\/p>\n

Some policy analysts have criticized these ideas and have said these changes may not provide a stable revenue source for states enacting the tax hikes.<\/p>\n

“We are talking about a small number of individuals with very volatile income” because the highest earners have business and capital gains income versus wages, Walczak said.<\/p>\n

“We’ve had some incredibly strong years of returns in the market,” he said. “But that’s not always the case.”\u00a0<\/p>\n

Adam Michel, director of tax policy studies at the Cato Institute, a libertarian think tank, has also said wealth taxes raise less revenue than expected<\/a>.<\/p>\n

“Investors have a strong incentive to shift portfolios toward assets<\/a> that are harder to value, easier to shelter, or more mobile across borders, rather than toward their most productive use,” he wrote in a Substack post in January. “This encourages tax avoidance rather than genuine economic activity.” <\/p>\n<\/div>\n

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