U.S. Wealth Tax Guide
Last updated: 3 Oct 2025
U.S. Wealth Tax — Status, Proposals & Practical Implications
Short answer: the United States currently has no federal wealth tax—i.e., no ongoing annual tax on net worth. Discussion continues at the federal and state levels, including mark-to-market minimum tax concepts and state-level initiatives, but none is law today.
1) Current legal status
- No federal wealth tax in effect.
- No state currently imposes a recurring net-wealth tax on individuals; several have studied or floated bills.
- Today’s wealth-related burdens instead arise from local property taxes, income/capital-gains taxes, and the federal estate tax (plus certain state estate/inheritance taxes).
2) Federal proposals
| Proposal | Core idea | Status |
|---|---|---|
| Ultra-Millionaire Tax Act | Annual tax on net wealth above specific thresholds (e.g., $50m and $1bn tiers). | Introduced/reintroduced in multiple sessions; not enacted. |
| “Billionaire Minimum Income Tax” / mark-to-market | Impose a minimum income tax on some unrealized gains for very wealthy taxpayers (functionally closer to income tax than a pure wealth tax). | Debated in federal budget contexts; not law. |
3) State proposals
Washington
Adopted a capital-gains excise tax (not a wealth tax). Separate wealth-tax concepts have been studied but not enacted.
California
Wealth-tax bills have been introduced in recent sessions but did not pass; no wealth tax in force.
New York
Proposals include a billionaire mark-to-market approach; at proposal stage only.
Other states
Several states have floated studies or discussion drafts; as of now, none levies a recurring net-wealth tax on individuals.
4) Wealth tax vs. property, capital-gains & estate taxes
| Instrument | What it taxes | Status / Example |
|---|---|---|
| Wealth tax | Annual levy on net worth (assets minus liabilities). | Not in force at federal or state level. |
| Property tax | Ad valorem tax on real property value, set by local governments. | Nationwide local practice; see our U.S. Property Tax Guide. |
| Capital-gains tax | Tax on realized gains; some states add their own layer. | Distinct from a wealth tax; realization is the trigger. |
| Estate/Inheritance taxes | One-time transfer taxes at death (federal estate tax; some state estate/inheritance taxes). | Not recurring net-worth taxation. |
5) Practical implications for HNW/expats
- Monitor proposals if you have ties to states with active debates or significant federal exposure.
- Distinguish exposures: property (local), capital-gains (federal/state), and estate/inheritance (federal/some states) drive current planning—not wealth tax.
- Valuation & liquidity: proposals highlight issues for illiquid assets; keep sound documentation and consider liquidity buffers.
6) Checklist
Policy monitoring
- Track federal mark-to-market and minimum-tax discussions.
- Watch state legislative calendars (CA, NY, WA and others).
- Note court decisions that affect classifications (income vs. excise vs. property).
Today’s planning focus
- Property-tax exposure reviews; capital-gains optimization.
- Estate/wealth-transfer planning for federal and state regimes.
- Valuation files for closely-held assets; liquidity planning.
7) FAQ
Does the U.S. have a wealth tax right now?
No. There is no federal wealth tax in force, and no state has enacted a recurring net-worth tax on individuals.
Is a state capital-gains tax a wealth tax?
No. Capital-gains taxes apply to realized gains and are generally distinct from a tax on net worth.
What’s the status of “Ultra-Millionaire” or mark-to-market ideas?
They have been introduced in various forms but have not been enacted into law.
Talk to us
We track federal and state proposals, model “what-if” scenarios for high-net-worth/expat clients, and integrate property, capital-gains, and estate/inheritance taxes into one plan.