How much do the richest people owe to society? For a growing number of states, the answer is “more.”
Massachusetts voters approved a new tax called the Fair Share Amendment in 2022, for instance, levying 4 percent on incomes over a million dollars. Last fiscal year the tax brought in $3 billion in revenue — 50 percent more than voters had even been primed to expect. The revenue has helped make improvements to Boston’s ailing public transit system, expanded access to affordable child care, and made breakfast and lunch free for all K-12 students. Millionaires haven’t fled the state en masse as some opponents of the Fair Share Amendment suggested they might. And lawmakers in other places are looking at similar measures.
Washington, long a state with no income tax, this year adopted a 9.9 percent tax on incomes above $1 million. Maine recently enacted a budget with a 2 percent surcharge on high incomes. Rhode Island lawmakers are considering a similar proposal with a rate of 8.99 percent. Organizers in Michigan were collecting signatures for a ballot measure that would raise money for public schools with new taxes on incomes over $500,000. (They recently announced they were postponing the effort.)
The idea of taxing the rich to pay for public services is as old as time. But backers of the various proposals say it has additional momentum right now for a number of reasons. One is that income and wealth inequality are growing worse, with the richest 1 percent of U.S. households owning the largest share of wealth since modern record-keeping began. States are also coming down from a revenue high during the COVID-19 pandemic and looking for new sources of money. More acutely, state leaders say, the One Big Beautiful Bill Act of 2025, also known as H.R. 1, shifted more of the burden of certain social programs, like Medicaid and Supplemental Nutrition Assistance Program benefits, onto states, while extending tax cuts for the wealthy passed during the first Trump administration. As Rhode Island’s budget director put it in a January presentation, “H.R. 1 really forced our hand on this.”
“That dramatic juxtaposition of benefit cuts for poor people to pay for tax reductions for millionaires and billionaires really caused us to start thinking about a tax on very high earners,” says Washington state Sen. Jamie Pedersen, the Democratic majority leader and sponsor of the new state tax. The timing was right. The state Legislature was trying to solve a long-term structural deficit. Washington had the most regressive tax structure in the U.S. Laws in other states, like Massachusetts’ Fair Share Amendment, hadn’t raised any glaring red flags. And Pedersen says the state Supreme Court is more liberal than in years past, and more likely to revisit a 1933 decision banning income taxes in the state. Still, both a court challenge to the new Washington tax and an effort to overturn it at the ballot box are likely.
Americans have a reputation for being antitax. But in fact most people’s primary complaint about taxation is that wealthy people and corporations aren’t paying their fair share, not that they themselves are overtaxed, according to opinion polls. And that’s been true for a long time, says Vanessa Williamson, a senior fellow at the Urban-Brookings Tax Policy Center. The famous Boston Tea Party was not in fact a protest over a tax burden that was too high, she notes; it was a reaction to a tax cut for the British East India Company. With inequality on the rise, states have more political cover than usual to raise taxes on high-income people.
“Consolidation of wealth is so extreme that there’s just much more money at the top,” Williamson says. “If what you’re concerned about is revenue, there’s more revenue to be gained at the top.”
Still, even with the Trump administration’s efforts to shift the cost of some programs onto states, most states are in relatively good revenue shape, says Jared Walczak, a senior fellow at the right-leaning Tax Foundation in Washington, D.C. Raising taxes on high-income earners is one trend, but a more widespread trend is cutting income taxes at the state level.
Walczak says there are reasons states should think twice before raising taxes on their richest residents. One is that such taxes “fall very substantially on small-business owners,” which employ most of the people in the country, Walczak says. That makes these measures effectively “a tax on job creation.” Some residents subject to the tax may leave for another state, while others may choose not to make investments, he says. While it’s true Massachusetts’ millionaires haven’t all fled to Florida, some have left the state, and Walczak says the state needs more years, under different economic conditions, to really understand how this will affect its economy.
The language of the tax proposals can be misleading. Supporters in several places, including Massachusetts, have described the increases as a “millionaire tax.” But there’s a difference between someone who brings in $1 million or more a year and a person whose total assets, including their property and retirement savings, exceed $1 million — the traditional definition of a millionaire. A proposal being considered in California right now would enact a true wealth tax on billionaires’ assets. That’s not the same thing as a progressive income tax.
While Massachusetts voters ultimately approved the Fair Share Amendment, the vote was closer than many expected it would be based on historic opinion polling around the idea. That’s because the timing was tough, says Phineas Baxandall, research director of the left-leaning Massachusetts Budget and Policy Center. State revenues were at rare heights, and the state was sending out millions in tax rebates. Ultimately it helped that the tax was tied to investments in transportation and education, areas that routinely trouble state budget negotiations and where voters often want more support.
“I think it can be reassuring to the public to know where the money’s going,” Baxandall says. “Partly because there’s so much antitax rhetoric that people might feel that the money would otherwise go into some mythical Department of Waste, Fraud and Abuse.”
States that do pass higher taxes on high-income people can brace for a fight of one type or another. California’s wealth tax, which doesn’t yet exist and may never come to pass, has reportedly already led some billionaires to leave the state. Massachusetts voters may see another ballot question this fall asking them whether the state’s base income tax rate should be cut by 1 percent — a move that opponents say could deprive the state budget of $5 billion, wiping out the gains of the Fair Share Amendment.
The pendulum goes back and forth, but Amber Wallin, director of the State Revenue Alliance, says progressive taxation has the wind at its back. Over the last half-century, wealthier people have reaped most of the benefits of changes in tax policy, she says. A growing movement of voters, advocacy groups and lawmakers is fighting to make the wealthy pay more.
“There will often be pushback, but when you think about the long-term trends, we’re seeing it come to fruition,” Wallin says.
