No U.S. state currently has a wealth tax in the strict sense of an annual levy on a resident’s total net worth. Lawmakers in at least seven states have introduced bills that would create one, and a California ballot initiative aimed at billionaires may reach voters in 2026, but every direct wealth tax proposal remains unenacted. What exists today is a patchwork of taxes that capture accumulated wealth in specific situations: high-value real estate sales, capital gains, estates, and in a few places, financial holdings.
States With Wealth Tax Proposals on the Table
Seven states have introduced wealth tax legislation, most sharing a common design: exempt a large threshold, then tax the excess at a flat annual rate.
California. AB 259 would impose a 1% annual tax on worldwide net worth above $50 million, or $25 million for married individuals filing separately. Residents with net worth above $1 billion would pay an additional 0.5% surtax, bringing the top rate to 1.5%. The bill also includes a four-year lookback for former residents: leaving California wouldn’t fully release you from the tax, because you’d still owe a prorated share based on how many of the preceding four years you lived in the state.1California Legislative Information. AB-259 Wealth Tax: False Claims Act
A separate California measure, the 2026 Billionaire Tax Act, would bypass the legislature and go to voters. It proposes a one-time 5% excise tax on individuals and certain trusts with net worth of $1 billion or more, phasing down between roughly $1 billion and $1.1 billion.2California Department of Justice. Initiative 25-0024A1 – Billionaire Tax The initiative sets a tax obligation date of January 1, 2026, but the earliest it could be approved is November 2026, a timing gap opponents are expected to challenge on due process grounds.
Washington. HB 1473 targets only financial intangible assets like stocks and bonds. The first $250 million would be exempt, with a 1% annual tax on value above that.3Washington State Legislature. HB 1473 – 2023-24
Hawaii. SB 313 proposes a 1% tax on assets exceeding $20 million, a lower threshold than other states have floated. The bill passed the state Senate Judiciary Committee in January 2025.4Hawaii Senate Majority. Senate Judiciary Committee Passes Wealth Asset Tax Bill for Assets Above $20 Million
New York. Senate Bill S165, introduced in 2025, takes a different approach: a mark-to-market tax on residents with net assets of $1 billion or more.5New York State Senate. Senate Bill S165 Instead of taxing the entire wealth pile each year, it taxes the annual change in asset values, including unrealized gains on investments the owner hasn’t sold. The result functions much like a wealth tax through a different mechanism.
Connecticut, Illinois, and Maryland. Each has introduced wealth-related bills as part of a coordinated multi-state effort. None has advanced as far as the proposals above, and specific thresholds remain in flux.
Why No State Has Enacted a Wealth Tax
The stalling isn’t for lack of political will in the sponsoring states. Taxing net worth runs into constitutional barriers at both the federal and state level.
The federal Due Process Clause requires a meaningful connection between a state and whatever it taxes. Courts have long held that a state cannot tax property situated beyond its borders.6Legal Information Institute. Due Process and Taxation – Doctrine and Practice A tax on a California resident’s worldwide holdings, including a vacation home in Montana and stock in a Delaware corporation, stretches that connection thin. The Dormant Commerce Clause adds a related requirement that state taxes be fairly apportioned to activity within the state’s borders, and global net worth doesn’t apportion itself neatly to any single state.
State constitutions add their own obstacles. Many contain uniformity clauses requiring that property taxes be imposed at the same rate on all property. Washington’s constitution has exactly this requirement, which is why the state’s capital gains tax had to be structured as an excise tax on transactions rather than a property tax on assets. California’s constitution caps certain property tax rates, giving opponents of the Billionaire Tax Act grounds to argue the initiative exceeds that cap regardless of what it’s called.
Then there’s the practical problem: wealthy people can move. A single state acting alone risks driving affluent residents across the border and shrinking the base the tax was meant to reach. AB 259’s four-year exit provision is a response to this, and the multi-state approach exists for the same reason. If enough neighboring states adopt similar thresholds, the escape hatch narrows.
How States Actually Tax Wealth Today
While no state runs a true net-worth tax, several capture meaningful slices of accumulated wealth through other mechanisms.
Real Estate Transfer and Mansion Taxes
New York imposes a statewide 1% mansion tax on residential purchases of $1 million or more, paid by the buyer.7New York State Department of Taxation and Finance. Publication 577 – FAQs Regarding the Additional Tax on Transfers of Residential Real Property for $1 Million or More In New York City, a graduated schedule climbs to nearly 4% for residences over $25 million, and the city adds its own real property transfer tax on top.8New York State Department of Taxation and Finance. Real Estate Transfer Tax
Los Angeles applies Measure ULA, a voter-approved documentary transfer tax earmarked for affordable housing and tenant protection, with thresholds adjusted annually. For transactions closing after June 30, 2025, a 4% tax applies to sales between $5.3 million and $10.6 million, and a 5.5% tax applies at or above $10.6 million.9City of Los Angeles Office of Finance. Real Property Transfer Tax and Measure ULA FAQ
Washington levies a graduated Real Estate Excise Tax on all property sales. The state portion starts at 1.10% for sales up to $525,000, steps up through 1.28% and 2.75%, and tops out at 3% on portions of the price above $3,025,000.10Washington Department of Revenue. Real Estate Excise Tax
Capital Gains Taxes
Most states with an income tax treat capital gains as ordinary income, so selling appreciated stocks or property triggers a state tax bill. Washington is an unusual case: it has no income tax but imposes a 7% excise tax on long-term capital gains from assets like stocks and bonds. The tax applies only to gains above a standard deduction of $278,000 for 2025, adjusted annually.11Washington Department of Revenue. Capital Gains Tax The state Supreme Court upheld it by classifying the tax as an excise on the transaction rather than a property tax on the underlying assets.
Estate and Inheritance Taxes
Roughly 18 states and the District of Columbia impose their own estate or inheritance taxes on top of the federal estate tax. Estate taxes are paid by the estate itself, based on total assets. Inheritance taxes are paid by the people who receive them. Maryland is the only state that imposes both. These taxes only trigger at death, so they don’t touch wealth during a lifetime, but they represent the most direct way states currently capture a share of assets that were never taxed as income.
Intangible Personal Property Taxes
A few states still authorize taxes on financial holdings like stocks, bonds, and other non-physical property. Pennsylvania law allows counties to levy up to 4 mills on certain classes of intangible personal property, including interest-bearing accounts, corporate loans, and shares of stock.12Pennsylvania General Assembly. Co-Sponsorship Memo 44033 Few jurisdictions actively collect it and the revenue is modest, but the legal framework matters: it establishes that states have authority to tax wealth held as financial instruments, not just real estate. Florida ran a similar intangibles tax for years before repealing it, precedent that proponents of broader wealth taxes point to when arguing the legal path already exists.