More States Want to Tax the Rich. Here's How.

July 12, 2026

AI Summary

5 min read

California’s proposed billionaire tax is a first-of-its-kind experiment in state-level wealth taxation, and it has already qualified for the November ballot. The measure would impose a one-time 5% tax on the net worth of individuals with at least $1 billion in assets—meaning someone worth $10 billion would face a $500 million bill. The revenue is intended as a stopgap to offset projected cuts to Medi-Cal, California’s Medicaid program, which the healthcare workers union backing the measure estimates could lose $100 billion in federal funding. But the proposal has drawn opposition from an unusual coalition that includes Governor Gavin Newsom, the California Teachers Association, Planned Parenthood of California, and the California Medical Association. The fight over this ballot measure is part of a broader national trend: more states are looking for ways to make the wealthy pay more, but they are taking very different approaches.

The difference between a wealth tax and an income surtax

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What you'll learn

1 (00:33) **Show Introduction** - Host Alex Ocelov introduces the topic: state-level efforts to increase taxes on the wealthy, focusing on California's billionaire tax proposal.
2 (02:28) **How the California Billionaire Tax Would Work** - Laura Nelson explains the mechanics of the proposed wealth tax.
3 (04:06) **Current Status of the California Effort** - The measure has qualified for the November ballot, but faces competing ballot measures funded by wealthy opponents.
4 (04:51) **Wealth Tax vs. Income Tax on the Rich** - Gene Whelan distinguishes the California wealth tax from more common state-level income taxes on high earners.
5 (06:22) **Evidence from Massachusetts** - The state's 4% surtax on income over $1 million has generated significant revenue.
6 (07:03) **Why These Tax Efforts Are Gaining Traction Now** - The combination of federal spending cuts and rising inequality is driving public support.
7 (09:09) **Pushback Against the California Tax** - A surprising coalition opposes the measure, including Governor Newsom and major labor and healthcare groups.

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Show Notes

Voters in California are weighing a one-time tax on billionaires. Meanwhile, states including Maine and Massachusetts have already implemented income taxes on wealthy residents. The idea of levying higher taxes on the rich is catching on across the U.S., but the way the measures work—and how residents feel about them—couldn’t be more different. Host Alex Ossola discusses the efforts to tax the wealthy (and their opposition) with WSJ economics reporter Jeanne Whalen and Journal enterprise reporter Laura Nelson.