Wealth Tax News – 7/25/2026

This week’s wealth tax coverage centers on California’s billionaire tax proposal (Prop 40), where Rep. Ro Khanna (D-CA) helped wealth tax backers make their case to congressional Democrats even as public safety groups joined the opposition and a Sergey Brin-backed coalition reserved nearly $87 million in ads to defeat it.

At the federal level, lawmakers introduced the Social Security 2100 Act, which would impose additional investment-income tax on incomes above $400,000, and a bill targeting mega retirement accounts, while a Washington Post op-ed cautioned that wealth taxes could disproportionately burden family farmers. Elsewhere, New York advanced Mayor Mamdani’s pied-à-terre tax on luxury second homes amid data showing a sharp decline in the state’s millionaire population, Michigan Democrats revived a constitutional amendment for a “fair share” surcharge, and in the UK, King’s College London researchers proposed a 2% minimum tax on £100 million-plus households while 120 British millionaires publicly asked to be taxed more.

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

California billionaire tax backers work Washington – POLITICO
Proponents of California’s wealth tax proposal took their pitch to Washington, with Rep. Ro Khanna (D-CA) helping arrange meetings. Rep. Khanna helped the SEIU-UHW officials meet with California House Democrats and the House Progressive Caucus to build support for the proposed wealth tax.

Trump’s voter claim and Khanna’s moment – POLITICO
Last week, more public safety organizations joined the coalition against California’s proposed. The California Professional Firefighters and California State Sheriffs came out against the wealth tax proposal. On the other hand, Rep. Khanna, who supports the measure, facilitated meetings between SEIU-UHW political director Gustavo Medina and House members on the Hill to garner support.

Blumenthal Introduces Bill Strengthening Social Security – Office of Senator Richard Blumenthal
The Social Security 2100 Act would increase Social Security benefits for current and new beneficiaries by, in part, eliminating the Social Security tax cap. The bill would be paid for, in part, by imposing an additional tax on investment income for taxpayers making over $400,000.

Neal, Wyden Introduce Bill to Crack Down on Mega Retirement Accounts – Ways and Means Democrats
On July 22, House Ways and Means Ranking Member Richard Neal (D‑MA) and Senate Finance Ranking Member Ron Wyden (D‑OR) unveiled legislation to crack down on “mega” tax‑preferred retirement accounts, based on new JCT data showing hundreds of millions of dollars parked in a small number of ultra‑large IRAs and 401(k)s. The bill would require ultra‑wealthy individuals with more than $10 million in combined tax‑advantaged retirement balances to take minimum distributions and would bar further IRA and defined contribution plan contributions once total vested balances exceed $10 million, while leaving middle‑class savers’ accounts unchanged.

Opinion | Farmers, not billionaires, will pay wealth taxes – The Washington Post
Former Sen. Ben Nelson (D-NE) argues that emerging wealth-tax proposals would unfairly burden family farmers by taxing fluctuating asset values rather than realized income. He noted that this could force land-rich but cash-poor operations to sell land, equipment, or livestock to meet annual tax bills. He argued that once the federal government builds the bureaucracy needed to administer a wealth tax, political pressure would push it beyond billionaires, while actual revenue could disappoint as wealthy taxpayers move or shelter assets, shifting the cost to the middle class. Instead of adopting a wealth tax, Sen. Nelson urged policymakers to focus on enforcing the existing tax code and collecting the estimated $700 billion annual unpaid taxes.

California

Billionaires Prepare $87 Million Ad Campaign to Block California Wealth Tax – The New York Times
A coalition backed by Sergey Brin and other wealthy tech investors has reserved nearly $87 million in California advertising to try to stop the proposed billionaire tax.

Lawyer: Billionaire tax could cost California $1 trillion – Yahoo News/Center Square
David Lesperance, an attorney representing ultra-wealthy clients, claims that California’s proposed wealth tax has already prompted high-net-worth individuals to relocate, potentially costing the state over $1 trillion in lost tax revenue. He based the estimate on a combination of publicly known billionaire departures and his own clients who have left or are planning to leave.

Avoiding the billionaire tax – Capitol Weekly
Matt Brown said wealthy people have long been conditioned not to take proposed taxes seriously because such measures are often threatened year after year. He added that many were surprised by how aggressive and broad Prop. 40 is. He also warned that the key fight may turn on how far regulators can push asset valuation and net-worth scrutiny.

California billionaire tax: The risks for biggest state economy in US – CNBC
CNBC framed California’s proposed wealth tax as a high‑stakes trade-off: it could generate tens of billions in revenue to offset health-care cuts, but opponents, including Gov. Gavin Newsom and both major gubernatorial candidates, warn it may drive billionaires and businesses out, among other reasons. Law professor David Gamage and the SEIU argue the tax would strengthen California’s standard of living and competitiveness.

‘Tax The Rich’ Will Be On The Ballot For 14% Of Americans In November – Forbes
This year’s midterms will have roughly 14% of Americans – those in California and Washington – voting on measures that target only high-wealth and high‑income taxpayers. If California’s Prop 40 becomes the first voter‑approved wealth tax and Washington voters uphold a new millionaire income tax, it will signal that even high‑tax or historically no‑income‑tax states are willing to impose new taxes on ultra‑wealthy residents. Conversely, if voters in these deep‑blue states reject the measures, over potential concerns about revenue volatility, capital flight, constitutional risk, or discomfort with taxing wealth rather than income, it would hand powerful ammunition to opponents.

New York

Mamdani Puts Rich Absentee New Yorkers on Notice: ‘You’ve Got Mail’ – Business Insider
Mayor Zohran Mamdani’s (D) new pied-à-terre tax targets luxury second homes in New York City worth at least $5 million, imposing an annual surcharge starting at 0.8% and rising to 1.3% for properties valued at $25 million or more, and expected to raise about $500 million a year from more than 11,000 homes. The city has begun sending notification letters and launched a support webpage, and the tax is poised to hit a number of billionaire absentee owners—including Jeff Bezos, President Donald Trump, Jay‑Z and Beyoncé, and Citadel CEO Ken Griffin—whom Mamdani casts as needing to pay their “fair share” to fund better parks, libraries, and schools.

NY sees dramatic exodus of millionaires — causing nearly $11B loss in tax revenue: study – Yahoo Finance
A Citizens Budget Commission analysis finds New York’s share of U.S. millionaires fell from 12.7% to 8.7% between 2010 and 2022, leading to an estimated $10.7 billion loss in personal income tax revenue in 2022 alone. The report lands amid concern that Mayor Mamdani’s aggressive “tax the rich” agenda could accelerate wealthy out‑migration. Experts warn that the top 1% already pay about 45% of state income taxes and may increasingly choose lower‑tax states if they see New York as intent on further hikes.

Illinois

Johnson’s advisory referendum on millionaires tax shot down in latest Council rebellion – Chicago Sun-Times
Mayor Brandon Johnson’s (D-Chicago) effort to put an advisory “millionaires tax” question on Chicago’s November ballot was blocked by a City Council bloc that accused him of abusing direct introductions to committee. Ald. Marty Quinn led the charge, framing the move as a broader fight over Council independence and insisting the issue was procedure, not substance.

Michigan

Michigan Democrats revive push to tax wealthy residents through constitutional amendment – Michigan Advance
Last week, Michigan lawmakers introduced a constitutional amendment proposal that would add a “fair share” income tax surcharge starting in 2027. It would apply to individuals earning more than $500,000 and couples earning more than $1 million annually. The revenue generated from the tax would fund pre‑K–12 education, childcare, health and human services, housing and water infrastructure. The measure would require two‑thirds approval in both legislative chambers to reach the ballot under Michigan’s constitutional amendment process.

Other

Will there be a U.S. wealth tax? What you need to know – J.P. Morgan Private Bank U.S.
J.P. Morgan concluded that a federal wealth tax is very unlikely in the next few years and would immediately face major constitutional challenges, given historic limits on “direct” taxes and unresolved questions about taxing unrealized gains. Instead, they emphasize that states are the real testing ground: several have recently adopted or debated higher top rates on high-income taxpayers or asset‑based levies, such as California’s one‑time 5% billionaire tax initiative and Washington’s new millionaires tax. They note that these state proposals blur the line between traditional property taxes and broader wealth taxes, and may prompt some high‑net‑worth individuals to consider relocation or planning to manage exposure.

Two percent minimum tax on richest households could raise £10 billion – King’s College London
A report by the King’s College London says a 2% minimum annual tax on households with more than £100 million in wealth could raise around £10 billion in 2026 and affect fewer than 1,000 UK households. The report argues the proposal would be targeted and practical, with a 10-year post-emigration liability to reduce tax-motivated relocation.

Gary Lineker among millionaires asking Andy Burnham to tax them more – BBC
A group of 120 UK millionaires, including Gary Lineker, Brian Eno, Val McDermid, Gary Stevenson, Richard Curtis and Ian Gregg, have signed an open letter urging Prime Minister Andy Burnham to introduce a wealth tax on fortunes above £10 million. They argue that they “can afford it” and that taxing asset-based wealth rather than ordinary earnings would help devolve wealth and power from the richest and fund public investment.

Family Enterprise USA Action engages with legislators on Capitol Hill on behalf of family offices, hardworking 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.