Wealth Tax News – 8/14/2026

This week’s wealth tax developments centered on California’s Proposition 40, which faced constitutional scrutiny from the Tax Foundation and over $100 million in opposition spending led by Sergey Brin. 

At the federal level, DSA leadership endorsed aggressive wealth taxation without specifying rates or thresholds, and Oregon’s two U.S. senators continued advancing competing proposals to tax unrealized gains and high-net-worth households.   In New York, Mayor Mamdani’s pied-à-terre tax encountered administrative complexity and litigation, while an Australian academic argued that billionaire-specific levies are less effective than systemic reform to tax all forms of wealth consistently.

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

RNC warns socialists push Democrats ‘off cliff’ after DSA co-chair offers no tax rate
Democratic Socialists of America (DSA) co-chair Megan Romer endorsed aggressively taxing millionaires and billionaires but could not provide a specific tax rate, income cutoff, or wealth threshold when pressed by The New Yorker’s David Remnick. Romer said tax policy should instead be based on public spending needs and the revenue required to meet them. The DSA’s 2026 program similarly calls for “aggressive wealth taxes” without defining their scope. The RNC used the exchange to argue that socialist influence could harm Democratic candidates, while centrist group Third Way announced a $15 million effort to counter the DSA’s political influence following several primary victories by DSA-backed or progressive candidates.

Editorial: Oregon’s senators lead ‘tax the rich’ plans | Your Oregon News
The editorial argues that although wealthy households may face lower effective tax rates because the tax system primarily targets income rather than accumulated wealth, proposed wealth taxes carry significant practical risks. It highlights an Oregon would-be ballot measure for a 2% tax on assets above $30 million, Sen. Ron Wyden’s (D) proposal to tax certain unrealized stock gains of the wealthiest Americans, and Sen. Jeff Merkley’s (D) proposed annual 2% tax on wealth above $50 million, rising to 3 percent above $1 billion. While these plans appeal because they would affect relatively few taxpayers, the editorial warns they could encourage asset relocation or concealment and reduce public trading of businesses, potentially producing outcomes different from proponents’ goals.

California

Sergey Brin Crosses $100 Million in Spending to Fight Wealth Tax – Bloomberg
Google co-founder Sergey Brin has contributed $102 million to Building a Better California, including a recent $20 million donation, making him the leading funder of efforts to defeat California’s Proposition 40. Brin-backed groups are financing two competing ballot measures that could invalidate it if they receive more votes. Supporters of the tax have raised just over $30 million, and Brin—who has also established Nevada residency—has helped mobilize other technology billionaires against the proposal.

California Proposition 40: Is CA Wealth Tax Constitutional? – Tax Foundation
Supplementing its prior analyses, Tax Foundation argues that California’s Proposition 40 has substantial constitutional vulnerabilities that could invalidate it in whole or in part. The analysis argues that labeling the proposed tax as an excise tax cannot avoid state limits on property taxation. The analysis also highlights that its retroactive residency trigger, full tax of wealth measured after taxpayers may have left the state, and treatment of trusts and nonresident spouses raise due process, Commerce Clause, apportionment, and right-to-travel concerns; and that including federal obligations and imposing uncapped appraiser penalties create additional legal problems. Because these defects affect the tax’s basic design, the report concludes that judicial reformation is unlikely to cure them and predicts extensive litigation if voters approve the measure.

California billionaire tax’s chief backer: ‘This is now a national campaign’ – POLITICO
SEIU-UHW President Dave Regan characterized Prop 40 wealth tax as part of a broader national campaign to tax wealth “hoarded outside of the tax system.” Despite early opposition from Gov. Gavin Newsom, labor and health care groups, and a billionaire- and tech-backed coalition supporting competing measures, the proposal has gained endorsements from the California Democratic Party and California Federation of Labor Unions. Regan rejected arguments that the tax would cause billionaires to leave the state and said he would welcome additional backing, including from Rep. Alexandria Ocasio-Cortez.

Opinion: Why flawed wealth tax could backfire on California – San Diego Union-Tribune
Jared Walczak, a senior fellow at the Tax Foundation, argues that Prop 40 could backfire because its residency and valuation rules are vulnerable to legal challenge. By taxing individuals who were California residents on January 1, 2026, based on wealth measured at year-end, even if they move away during the year, the measure may constitute an unconstitutional retroactive “wholly new tax,” violate due process requirements for a connection between California and the taxed wealth, and fail fair-apportionment standards. Walczak also noted that courts may be unwilling to rewrite the measure’s core provisions, creating an incentive for billionaires to leave before enactment and potentially costing California ongoing income-tax revenue without generating the anticipated wealth-tax proceeds.

New York

NYC Mayor Zohran Mamdani’s luxury second home tax is getting complicated – AP News
New York City’s new pied-à-terre tax, championed by Mayor Mamdani, is facing administrative and legal hurdles. The surcharge would apply to high-value homes that are not owners’ primary residences, but trusts, LLCs, rental arrangements, and informal family occupancy make determining residency and ownership difficult. Wealthy homeowners have criticized the disclosure of potentially taxable properties and challenged the rollout in court; although a judge temporarily paused the process, the city’s appeal has allowed implementation efforts to continue.

Other

Calls to tax billionaires are growing. Is there a better way to tax the rich? – The Conversation
The debate over taxing billionaires reflects a broader problem: Australia taxes wages, savings, property, and wealth inconsistently. High-net-worth individuals often accumulate wealth through unrealized capital gains, which generally are not taxed until assets are sold, allowing wealth to grow with tax deferred—unlike wages, which are taxed as earned. While a billionaire wealth tax or annual tax on unrealized gains could address this disparity, valuation and volatility create practical challenges. The author contends that Australia should focus on a more coherent tax system across all forms of wealth, including property and savings, rather than rely solely on a billionaire-specific levy.