Taxing the Rich: Which States Have Surtaxes on High Earners

01Overview

Washington State's Governor Bob Ferguson signed a 9.9% tax on income over $1 million into law on March 30, 2026 - immediately triggering lawsuits and a ballot repeal effort. Maine is now the newest entrant, having signed a 2% surtax as part of its supplemental budget. Here's the full breakdown of every state that has gone down this road, what they projected it would raise, and what actually happened. On November 3, 2026, voters decide Washington Initiative 645 (repeal of the new tax), Massachusetts Question 5 (counting surtax revenue toward the state tax cap) and California Proposition 40 (a one-time 5% tax on billionaires' net worth).

For most of American history, the idea of singling out millionaires for a special tax rate above and beyond the standard top bracket was a political non-starter. States competed to attract wealthy residents, not drive them away.

That calculus started shifting in the 2000s, and it's been accelerating ever since. California fired the first shot in 2004, tucked inside a mental health ballot measure. New Jersey followed in 2020. Massachusetts voters approved the "Fair Share Amendment" in 2022. And now Washington State - a state that had never had a personal income tax in its modern history - signed a 9.9% tax on income over $1 million into law in March 2026, with Maine right behind it.

The interesting story isn't just which states are doing it. It's what happened to revenue projections once these taxes actually went into effect. In Massachusetts, the state certified $2.987 billion in fiscal year 2025 - more than double the $1.3 billion the Legislature had budgeted to spend from the surtax that year. In California, what started as a modest mental health levy now generates between two and three and a half billion dollars a year.

02State Millionaire Surtaxes - Mapped

03The Full Breakdown

California Since 2005

California's Proposition 63, the Mental Health Services Act, was the first state millionaire surtax in the US. Voters approved it with 53.8% of the vote. The 1% surcharge on income over $1 million layered on top of California's already-high income tax structure, bringing the effective top rate to 13.3%. Revenue goes directly to county mental health programs. It has been running for 21 years - the longest of any state surtax.

Revenue grew ~4x initial projection as California's millionaire population expanded significantly since 2005.

New Jersey Since 2020

New Jersey has a long, complicated millionaire tax history. It first created an 8.97% top bracket on income over $500,000 in 2004. In 2009 it temporarily pushed the rate to 10.75% (expired 2010). In 2018 it restored 10.75% but only on income above $5 million. The 2020 law - signed during the COVID fiscal crisis - dropped that threshold to $1 million, affecting roughly 20,000 filers.

Estimates varied - some analysts projected $400M+/yr after accounting for rebate offsets.

Massachusetts Since 2023

The Fair Share Amendment rewrote Massachusetts' flat-tax constitution. Before it, the state taxed most income at a single rate, cut in steps from 5.95% (1992-1999) to 5.05% in 2019 and 5% from 2020 (some income, such as short-term capital gains, was taxed at a different rate). The amendment added a 4% surcharge on income above $1 million, with the threshold indexed to inflation annually (it was $1,083,150 in 2025). Revenue is constitutionally earmarked for education and transportation. The tax has blown past every projection. The number of millionaires in Massachusetts by net worth has grown 39% since passage, though that is a wealth count boosted by rising asset prices, not a count of the high-income filers who pay the surtax.

About $9B collected since Jan 2023 through FY2026 (DOR reported $3,380,320,213 for FY2026 in July 2026). FY2025 revenue was ~2x the original projection. FY2026 budget spent $2.4B from the Fair Share fund. Question 5 on the November 3, 2026 ballot would count surtax revenue toward the state tax revenue cap from FY2028.

New York Tiered Since 2021

New York doesn't use a formal surtax structure like Massachusetts, but its 2021 budget aggressively expanded high-income brackets. The rate on income over $1 million jumped from 6.85% to 9.65%. NYC residents face a further local income tax of up to 3.876%, making the city one of the highest-tax jurisdictions for high earners in the country. In the first half of fiscal year 2026, New York tax revenue exceeded initial projections by roughly $3 billion - driven significantly by high-income collections.

FY2026 H1 revenue exceeded projections by ~$3B, tracking to a potential $5B+ full-year surplus. High-income collections are sensitive to market performance.

Washington D.C. High-Earner Brackets

While not a state, the District of Columbia has built one of the most progressive income tax structures in the country. Its tiered top brackets - 9.25% on $250K+, 9.75% on $500K+, and 10.75% on $1M+ - effectively constitute a millionaire surtax. The 10.75% rate took effect in tax year 2022, up from 8.95%. The D.C. bracket structure has been expanded several times to push higher rates specifically onto higher earners.

D.C. is not a state and lacks full congressional representation, which has historically given it less political resistance to tax policy changes.

Minnesota Since 2024

Minnesota took a targeted approach in 2024, implementing a 1% surtax specifically on net investment income over $1 million - mirroring the federal Net Investment Income Tax structure. This affects investment returns from dividends, capital gains, and interest for high earners, rather than taxing all forms of income. It's a narrower but still significant addition to Minnesota's already high top income tax rate of 9.85%.

By targeting investment income specifically, Minnesota avoided the political fights over taxing wage income - a distinction that has legal implications in some states.

Maine NEW: 2026

Maine is the newest addition to the list, with Governor Janet Mills signing a 2% surtax on high earners as part of the state's $529 million supplemental budget - a reversal of her previous opposition. The surtax applies to income over $1 million for single filers and over $1.5 million for married couples. Mills, who is running for the US Senate, cited the need to protect health care and education investments against federal funding uncertainty. Maine's voter polling showed 69% support for the measure.

Too early for actual collections data. Maine Chamber of Commerce opposes the measure. Revenue projections are modest relative to other states given Maine's smaller millionaire population.

Maryland Historical: 2008-2010

Maryland's 2008 "millionaire tax" was one of the earliest state experiments with high-income taxation - and one of the most cautionary tales critics point to. The temporary 6.25% bracket on income over $1 million was projected to generate $106 million. It applied to tax years 2008 through 2010 (Maryland Legislative Handbook), and in its first years the number of Marylanders reporting $1 million+ in income dropped sharply. Opponents cited exodus; supporters argued the Great Recession was the primary cause. Maryland never reinstated the formal surtax.

Maryland is still cited by both sides of the millionaire tax debate - an object lesson in how hard it is to isolate tax effects from broader economic conditions.

Washington State SIGNED: March 30, 2026

Governor Bob Ferguson signed Senate Bill 6346 into law on March 30, 2026 - a historic moment for a state that had defeated income tax proposals at the ballot box ten times since 1934. The bill creates a 9.9% tax on personal income above $1 million, with the first payments due in April 2029. Within hours of signing, the Citizen Action Defense Fund announced a legal challenge led by former state Attorney General Rob McKenna, arguing the tax is unconstitutional under an 1933 state Supreme Court precedent. In May 2026 the state Supreme Court blocked a referendum on the law, holding that revenue measures are exempt. Opponents then qualified Initiative 645, certified on July 15, 2026, which asks voters on November 3, 2026 to repeal the tax and bar state and local income taxes.

Revenue earmarked to expand the Working Families Tax Credit, fund free K-12 meals, B&O tax relief for small businesses, and childcare. The Citizen Action Defense Fund legal challenge is pending, and Initiative 645 asks voters on November 3, 2026 whether to repeal the tax (as of October 2026).

04Projected vs. Actual Revenue

When states announced millionaire surtaxes, how close were the early projections? In almost every case where we have data, actual collections exceeded what officials forecast - sometimes by a wide margin.

Revenue in USD billions.

05Key Figures Across All States

06Washington State: Signed, Challenged, and Heading to Court

Updated October 24, 2026

A State That Never Had An Income Tax Now Has One - And The Fight Isn't Over

Washington State has defeated income tax ballot initiatives ten times since 1934. The state's constitution has been interpreted since 1933 as effectively prohibiting graduated income taxes. And yet, Governor Bob Ferguson signed Senate Bill 6346 into law on March 30, 2026.

The House had passed it 51-46 on March 10 after a marathon 24-hour floor debate. The Senate passed it 27-21. Ferguson, who had publicly backed the bill from the start, signed it at a ceremony packed with lawmakers, union members, and advocates. "Thank you, thank you, thank you. We did it everybody," Ferguson told the crowd.

The bill imposes a 9.9% tax on personal income above $1 million, effective January 1, 2028, with the first payments due in April 2029. The revenue - projected at roughly $3 billion annually from an estimated 21,000 households - is directed toward the Working Families Tax Credit expansion, free K-12 meals, childcare subsidies, and B&O tax relief for small businesses.

The legal challenge came the same day. The Citizen Action Defense Fund announced it is filing suit, with former Washington Attorney General Rob McKenna leading the litigation. McKenna's argument: under a 1933 state Supreme Court ruling, income is classified as property in Washington, and progressive property taxes are unconstitutional. Opponents then gathered signatures for a repeal initiative, and Initiative 645 was certified on July 15, 2026 for the November 3, 2026 ballot. Ferguson has said he expects the Supreme Court to ultimately decide the question - and that he would not have signed a bill he didn't believe would survive legal review.

07The Millionaire Surtax Timeline

08All States - Side by Side

09Arguments For and Against

10Sources

California Department of Health Care Services (MHSA); Massachusetts Department of Revenue - FY2024 and FY2025 revenue reports; Massachusetts Budget and Policy Center; Snopes fact check on Fair Share Amendment revenue; Boston Globe (MA millionaires tax surplus, May 2025); Fortune (MA $5.7B total, Oct 2025); InvestmentNews (IRS migration data, MA income outflow, 2025); People's Policy Project (millionaire exodus analysis, Nov 2025); Washington State Standard (SB 6346 signing, March 30, 2026); KUOW / OPB / KOMO / Fox13 Seattle (WA signing coverage); Governor.wa.gov press release (March 30, 2026); The Tax Times (WA SB 6346 analysis); Wikipedia - Millionaires tax (Washington state); Boston Globe (Maine millionaire tax, April 2026); Sun Journal / WGME / Spectrum News Maine (Maine budget coverage, April 2026); Fiscal Policy Institute (New York FY2026 revenue surplus, Jan 2026); Fox32 Chicago (Illinois millionaire tax study, April 2026); Tax Foundation (Maine millionaire tax analysis); Kiplinger; NJ Policy Perspective; Center on Budget and Policy Priorities.