State ‘Wealth Tax’ Proposals Take Aim at Family-owned Pest Management Businesses, Successful Families

By Pat Soldano, President of Family Enterprise USA, and the Policy Taxation Group. 

In 2025, there were a lot of wins for family-owned businesses. Sometimes we take our wins for granted, rest too fast, and are surprised when new issues seemingly come out of nowhere. As we look ahead to 2026, there are plenty of red flags that family-owned pest management businesses need to be aware of, and to start thinking about.

The greatest concern are the many discussions, proposals, and ballot measures now focused on a “Wealth Tax,” which could be the most harmful tax of all. It’s also a state-by-state and federal issue. 

At the federal level, Senator Ron Wyden (D-OR), along with 20 cosponsors, introduced S.2845, entitled the "Billionaires Income Tax Act," which was also introduced in the House by Representative Steve Cohen (D-TN-09) and Don Beyer (D-VA-08) and cosponsored by 27 representatives. 

• The legislation is aimed at taxing annually unrealized gains on tradable assets, like stocks, while assets like real estate would be paid upon the sale of the asset. The bills also propose to subject increases in a family business’s asset value to the Wealth Tax.

At the state level, no state currently collects a true Wealth Tax on all residents, but several have active proposals, surtaxes, or plans targeting successful families and their businesses.

• States like Hawaii, Washington, and California have active or recent proposals, or are having serious discussions, on taxing an individual’s or a family-owned business’s assets or net worth.
• Some states, like Minnesota, Maryland, and Connecticut, have opted for targeted changes to income or capital-gains taxes, or “wealth-proceeds” taxes, rather than direct taxes on successful family businesses or families. Massachusetts enacted a 4% surtax in 2022 on annual income over $1 million.

What to Watch 

If you have a family-owned business or are a successful family, and a large portion of your income comes from investments or is tied up in real estate or expensive equipment, these new tax proposals are aimed at you. Right now, these measures focus on estate taxes, property taxes, income, and capital-gains, but not on all assets. 

The good news is a Wealth Tax is hard to administer. Most plans face difficult legal, technical, and political hurdles, including valuation difficulties, enforcement costs, constitutional, and property tax constraints.
What’s easier to legislate is a new, or increased, income tax rate at the high-end of tax brackets.  
Most state Wealth Tax proposals tend to use alternative approaches, such as taxing business assets, a family’s net worth, or financial assets above a threshold. They can also tax unrealized capital gains or investment income, or capital-gains.

Because of these hurdles, states often opt for easier wealth proceed taxes, capital gains surcharges, or increased income tax rates, all of which are less sweeping than a full Wealth Tax, but much simpler to pass and manage. 

Because of this, no state currently collects a “true” Wealth Tax on all residents. But this doesn’t stop proposals or tax plans targeting family-owned businesses and successful families from brewing among lawmakers.

Key State Overview

If you’re not aware of these proposals, here’s a quick state-by-state overview of recent proposals or laws in the United States (as of 2025-2026) that either amount to a Wealth Tax or other tax-hikes targeting family-owned business and successful families.  

California: Proposed the 2026 “Billionaire Tax Act” (ballot initiative) would impose a one-time 5% excise tax on net worth for individuals/trusts with US$ 1 billion. As of now (Dec 2025), still in the signature-gathering/qualification phase; not yet enacted.

Connecticut: In 2023, proposed legislation aimed at increasing taxes on wealthy residents, e.g., raising marginal income tax rates, increasing capital-gains tax, property-value surcharges, and other tax reforms for high-income/wealthy households. As of 2025: none of these have resulted in a statewide recurring wealth tax.

Hawaii: Proposed a wealth-asset tax of 1% tax on net worth for taxpayers with over US$ 20 million in assets. The bill has passed a Senate committee but is not law. Under active consideration: lawmakers have floated proposals for a “wealth tax” on financial assets/net worth.

Illinois: In 2023-2024, bills were introduced to tax wealth/financial assets, e.g., proposals for mark-to-market taxes on unrealized gains or annual asset-based levies. Also: a non-binding referendum approved in November 2024 to allow a “millionaire tax” (i.e., making the income tax structure more progressive rather than flat). As of late 2025: no comprehensive, enacted net-worth wealth tax.

Massachusetts: Voters approved the millionaire’s tax in 2022. It took effect in 2023 and is a surtax on taxable income. Under the law, once a taxpayer’s taxable income exceeds a threshold (originally $1,000,000), the portion of income above that threshold is subject to an additional 4% surtax. 

Maryland: Under a 2025 budget plan, the top income-tax bracket rate was increased for high earners. Also, proposals for capital-gains surcharges for high-income households. As of 2025: no statewide net-worth or wealth tax enacted.

Minnesota: In 2023, adopted 1% tax-on-wealth-derived income. 

Washington: The state’s Department of Revenue published a “Wealth Tax Study Report” in 2024 studying how such a tax might work. Because of constitutional/property-tax limitations, implementing a true net-worth tax would face legal/administrative challenges.  As of now: no wealth tax law enacted.

Additional States to Watch: Vermont, Pennsylvania, Nevada, New York, which have all had legislative discussions on increasing the tax on wealthy residents. 

NPMA has partnered with Family Enterprise USA, and the Policy Taxation Group, non-partisan organizations advocating for family enterprises of all sizes to provide information for family-owned businesses. Both groups are organizers of the Congressional Family Business Caucus and of the Family Enterprise USA Annual Family Business Survey.