Blue states are quickly pushing ‘wealth taxes’ — would you pay to escape?

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Vishesh Raisinghani

5 min read

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Across the country, several states are looking for ways to bolster tax revenue and balance their budgets. Many blue states have found an ideal target: the ultra-wealthy.

California’s proposed Billionaire Tax Act (1) would impose a one-time 5% levy on the total net worth of roughly 200 residents who are worth over $1 billion (a combined wealth of around $ trillion). The proposal is supported (2) by the leading Democratic candidate for the state’s governorship, Tom Steyer, who is himself a billionaire.

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Similarly, Democrats in Connecticut have proposed a capital gains and dividends surcharge on the state’s wealthiest taxpayers, per Hartford Business (3), while Washington state governor Bob Ferguson introduced a 9.9% levy on households with income above $1 million a year, per Washington Standard (4).

States including Illinois (5), Vermont (6) and Minnesota (7) have variations of similar policies.

The sudden rise in taxation on wealth and assets is driven by two forces: the need for more tax revenue and the growing popularity of such policies. Here’s a closer look at how these forces impact you.

Several states across the country face some pressure to raise tax revenues.

At the end of 2025, roughly 10 states, including California, New York and Washington faced a budget deficit, according to Multistate (8). Many of these states have taken cost-cutting measures to reduce the deficit, such as California’s moves to reduce Medicaid coverage for weight loss drugs or defer spending for state universities, according to the National Conference of State Legislatures (9).

However, increasing tax revenue, particularly on wealthy residents, is also seen as a viable solution. Roughly 61% of Americans, including 41% of Republicans, believe wealthy residents do not pay their fair share in taxes, according to the Pew Research Center (10). Similarly, 67% of Americans (including 51% of republicans) said they would support a billionaires tax, according to the Excessive Wealth Disorder Institute (11).

Simply put, states are looking for more revenue, and wealth taxes are one of the few politically acceptable options. For low- and middle-class households, many of these policies don’t have a direct impact.

But if you’re a millionaire, or relatively affluent, you may need to prepare your finances for this ongoing wave of increased taxation.

Read More: Robert Kiyosaki warned of a ‘Greater Depression’ — with millions of Americans going poor. Was he right?

A potential wealth tax doesn’t just increase costs, it also increases complexity. It’s one more layer to an already multilayered tax burden that you and your family face every year.

Fortunately, you don’t have to navigate the complex tax code alone. Platforms like Advisor.com can help connect you with a qualified financial planner who can optimize your personal finances to shrink the burden.

If you’re affluent or a millionaire, managing your wealth solo is actually unusual. Roughly 74% of American millionaires work with a financial advisor, according to the Northwestern Mutual 2025 Planning & Progress Study (12).

Even if you’re already working with a professional, Advisor.com’s AI-based matching system could help connect you with someone who is a better fit or has the right skills to tackle your unique tax concerns. The platform also lets you set up a free initial consultation, with no obligation to hire, to see if they’re the right fit for you.

A qualified professional can help you execute sophisticated tax maneuvers to potentially lower your tax bill.

Some of these professional money moves may also involve real estate, which has several tax advantages.

Platforms like mogul can help you gain exposure to real estate with very little upfront capital. This real estate investment platform offers fractional ownership in blue-chip rental properties which gives you much of the rental income and tax benefits without the need to manage a property or handle tenants directly.

The mogul team previously worked at Goldman Sachs, which means they’re uniquely well-equipped to integrate real estate into a wealthy family’s portfolio and long-term financial plans.

Getting started is a quick and easy process. You can sign up for an account and then browse available properties. Once you verify your information with their team, you can invest like a mogul in just a few clicks.

While there’s no crystal ball for how wealth tax legislation will play out in your state, partnering with experienced advisors and building a proactive financial strategy can keep your wealth protected against any outcome.

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We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.

SEIU-UHW (1); Fortune (2); Hartford Business (3); Washington State Standard (4); Common Dreams (5); Tax Foundation (6); Yahoo News (7); Multistate (8); National Conference of State Legislatures (9); Pew Research Center (10); Excessive Wealth Disorder Institute (11); Northwestern Mutual (12)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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