A number of states are considering new taxes on millionaires, with proposals coming forward from California, Rhode Island, Virginia, and several other states. The Tax Foundation has warned that this model of relying on a narrow slice of high earners whose income fluctuates wildly from year to year, potentially exposing states' schools, healthcare programs, and infrastructure funding to market downturns. Three states have already implemented millionaire taxes, including Washington state, Massachusetts, and Maine, where a 9.9% levy on household income above $1 million was introduced in March, and Massachusetts has collected nearly $6 billion in additional tax revenue since its 4% surtax took effect in 2023. Critics argue that this approach is successful, but Massachusetts's growing popularity and rising asset values have led to a decrease in millionaire incomes across the board. Jared Walczak, Senior Fellow at the Tax Foundation, highlighted the fundamental flaw in this model. He warned that states are building permanent spending obligations on a revenue base that could contract sharply in any given year. The top 1% of taxpayers paid 38.4% of all federal income taxes in 2025 while earning 20.6% of total adjusted gross income.