Wealth Tax News – 7/17/2026

Momentum for taxing the ultra-wealthy is building at every level of government in the last two weeks – from a progressive “Five & Dime” push in Congress to California’s high-stakes November ballot fight over a one-time 5% billionaire tax, alongside income-tax battles in Washington State, new luxury-property levies in New York City and Rhode Island, and a Lehigh County, Pennsylvania proposal.

Supporters point to backfilling federal healthcare cuts and rising public frustration with inequality, while opponents—including billionaires funding over $129 million in opposition spending, Governor Newsom, and commentators at the WSJ, Forbes, and the Cato Institute – warn of capital flight, residency audits, legal challenges, and long-term harm to innovation and younger generations. With several of these measures headed to voters or courts this fall, the coming months will be a real-world test of whether wealth taxes can survive practical, legal, and political scrutiny.

Please find summaries of relevant articles with web links below. Please reach out to any member of your Brownstein National Tax Policy Group team with questions or to set up a meeting.

California Wealth Tax Initiative 2026: Latest Polls – The New York Times
The New York Times has set up a page on their website tracking recent polling on the California wealth tax proposal.

Federal

The left sees a billionaire backlash — and an opening for a wealth tax – The Washington Post
Dan Merica reports that growing public frustration with extreme wealth, highlighted by high-profile billionaires and rising inequality, is creating new political momentum for a federal wealth tax among progressives. Advocacy groups and some Democrats are pushing proposals like a “Five & Dime” tax on high-net-worth households, arguing it could raise significant revenue and address disparities in how the wealthy are taxed. Polling from the Pew Research Center suggests broad concern that wealthy individuals do not pay their fair share, though the idea still faces practical, legal, and political obstacles.

California

Chamath Palihapitiya on CA wealth tax proposal: We’re better off addressing the core problem – CNBC
In an interview with CNBC, Palihapitiya (founder and CEO of Social Capital) argued that California’s wealth tax proposal would be ultimately harmful to economic activity and may eventually morph into a tax on Californians who are significantly less wealthy. He argues the tax may be a response to broader underlying issues such as ineffective governance and a general sense among many people that there is no meaningful path to financial success in the current economy. He noted that he will be staying in California and paying the tax if it takes effect.

Billionaires who fled California wealth tax risk intrusive residency audit – Financial Times
California’s proposed wealth tax on the paper wealth of billionaires resident as of January 1, 2026 is prompting wealthy tech figures to claim they’ve left the state, but they now face aggressive residency audits to test those claims. Sergey Brin, David Sacks, and Travis Kalanick all say they relocated shortly before the effective date, but advisers warn California’s tax authorities will scrutinize not just days spent in‑state but property, family, and financial ties to argue they remain residents. Supporters expect the tax to raise about $100 billion to backfill federal healthcare cuts and are confident few billionaires truly severed connections in the brief window, while affected billionaires are funding competing ballot measures, organizing campaigns against the tax, and preparing constitutional and residency lawsuits that could drag on for years.

A wealth tax in America? Not if Silicon Valley’s billionaires have their way – Financial Times
California’s proposed wealth tax highlights a major clash between populist anger at extreme wealth and organized opposition from Silicon Valley billionaires, led by Sergey Brin. Together, they have collectively committed at least $129 million to defeat the measure and placed spoiler initiatives on the ballot that could block any wealth tax. Supporters, including economists Emmanuel Saez and Gabriel Zucman, see the tax as a first step toward limiting “oligarchic drift.” Opponents, including Michael Moritz, Chamath Palihapitiya, and Governor Gavin Newsom, warn it will accelerate capital flight, invite repeat and broader wealth taxes, and deepen a rift within California’s Democratic establishment.

More States Want to Tax the Rich. Here’s How. WSJ Podcasts
Alex Ossola and Jeanne Whalen discuss the growing wave of state-level efforts to tax wealthy Americans, focusing on California’s proposal. While supporters, including labor groups, argue the tax is necessary and popular amid rising concern over inequality, it faces significant opposition from business leaders, policymakers, and even some Democrats who warn of capital flight, legal challenges, and design flaws. The broader trend shows states more commonly pursuing high-income taxes rather than wealth taxes, with mixed evidence on economic impacts, while policymakers increasingly debate whether federal reforms are needed to address structural issues like tax avoidance strategies used by wealthy individuals.

Hunting the billionaires risks killing Silicon Valley – New York Post
The California Post Editorial Board argues that the state’s proposed wealth tax risks driving away wealthy innovators and undermining Silicon Valley’s economic engine. The Board criticizes efforts to audit individuals who have left the state as overly aggressive and suggests the policy will discourage investment, entrepreneurship, and job creation while doing little to solve underlying fiscal issues like rising healthcare costs.

The Billionaire Tax Is A Retirement-Security Measure – Forbes
Teresa Ghilarducci argues that California’s proposed wealth tax is fundamentally a retirement‑security measure because it is designed to backfill Medi‑Cal funding lost under federal tax cuts, protecting Medicaid’s role as the de facto long‑term‑care insurer for middle‑class retirees. She contrasts it with Proposition 42, branded as the “Retirement and Personal Savings Protection Act,” which would block new taxes on the types of assets billionaires hold and could kill the Billionaire Tax if both pass and Prop 42 receives more yes votes. She called Prop 42 a “poison pill” that shields extreme wealth while threatening long‑term‑care financing.

New York

NYC New Property Tax Blasted as a ‘Half-Baked Money Grab’ – Bloomberg
New York City’s new tax on luxury second homes (the pied‑à‑terre tax) is being rolled out quickly to raise about $500 million, but real estate lawyers and industry groups say the rules are confusing and unfair. They argue the bare‑bones regulations leave major gray areas around residency proof, temporary vacancies, trusts, co‑op ownership, and tenant status, and worry co‑op buildings could be on the hook if individual owners don’t pay. The tax will initially use different rates and valuation thresholds for houses versus co‑ops and condos, then shift after 2028 to a unified system for second homes valued at $5 million or more, but opponents say owners still lack clarity on how values will be set or how exemptions will work.

Washington

Washington Millionaires Tax Repeal Bid Heads for State Ballot – Bloomberg Law
Washington millionaire tax is now facing a likely repeal vote in November after a repeal initiative led by Brian Heywood’s Let’s Go Washington met the signature threshold. The tax, slated to take effect in 2028 and first due in 2029, is projected to apply to about 20,000 households and raise more than $3 billion per year starting in 2029. Supporters say it targets a small slice of top earners to fund state needs. Opponents argue it will hurt Washington’s economic competitiveness and pave the way for a broader income tax, and they are also pursuing legal challenges claiming the levy is an illegal property tax.

Opponents argue millionaires tax repeal will strip K-12 funding – KOMO News
Opponents of Washington state’s millionaire tax repeal, including Gov. Bob Ferguson (D) and legislative leaders, argue that scrapping the income tax while leaving new sales tax exemptions for items like diapers and hygiene products in place would severely impact in the budget and force “devastating” K‑12 cuts or other tax hikes. Brian Heywood counters that the problem is overspending rather than revenue and warns the tax will eventually be extended below the $1 million threshold to hit pensions and ordinary earners, while supporters insist there is no political support to broaden it beyond true million‑dollar incomes.

Rhode Island

‘Taylor Swift Tax’ Won’t Hit Just the Kelces – WSJ
James Freeman argued that Rhode Island’s new “Taylor Swift tax” on high-value second homes will affect a broader group of residents and contribute to an already rising tax burden on the middle class. He said the policy, along with other tax increases such as higher gas taxes, real estate fees, and a new top income tax rate, reflects a broader approach that risks driving away investment and residents.

Pennsylvania

Opinion: Wealth tax would help meet Lehigh County’s financial need fairly – The Morning Call
Ettore Angelo argues that Controller Mark Pinsley’s proposed intangible “wealth tax” in Lehigh County is a fair way to shift some of the county’s financial burden from low‑wealth households to residents with substantial stock and other asset holdings. He criticized “trickle‑down” economics and describes the hearing over the proposal as heated, but says the core question is whether struggling families or affluent asset‑owners should bear higher taxes as revenue shortfalls grow. Citing large gains in national wealth concentrated among the top 1%, Angelo argues that the U.S. has already experienced massive upward redistribution of wealth and that modest taxes on the rich are a necessary step toward reversing dangerous inequality, especially child poverty.

Other

Wealth Taxes Would Hit the Young Hardest – WSJ
Dimitri Burshtein argues that wealth taxes, while gaining political traction, would ultimately harm younger generations by reducing capital investment needed for productivity and wage growth. He frames these proposals as a response to demographic pressures, aging populations and fewer workers supporting more retirees, which are straining public finances and driving governments to seek new revenue sources. Drawing on international experience, he argued thar wealth taxes often lead to capital flight and disappointing revenues, while undermining long-term economic growth. Instead, he advocates structural reforms such as adjusting retirement systems and favoring consumption-based taxes, warning that wealth taxes shift fiscal burdens onto younger and future generations while weakening the economic foundation they depend on.

Ultrawealthy Seek Citizenship Abroad As Wealth Taxes Gain Traction – Business Insider
As wealth taxes gain momentum in the US, wealthy Americans are increasingly treating foreign citizenship and residency as an insurance policy against future tax increases. The article notes that California’s wealth tax proposal has already prompted some to shift assets or relocate. Others are seeking “golden passports” or visas by making large investments abroad. Advisors such as David Lesperance say clients first pursue lineage-based citizenship in countries where they have ancestral ties, with second or third passports providing optional escape routes even if they never ultimately leave the US.

Opinion | Socialists think billionaires steal wealth – The Washington Post
Marian Tupy, a fellow at the CATO Institute, argued that socialist critiques of billionaires rely on an outdated belief that wealth is “taken” rather than created. He argued that billionaires generate wealth by organizing resources in ways that benefit consumers, workers, and society, and that profits reflect this value creation rather than exploitation. Tupy warns that wealth taxes would discourage innovation, prompt capital flight, and reduce economic growth. He said that taxing billionaire wealth would ultimately harm the broader public by diminishing incentives to create new businesses, technologies, and jobs.