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TaxBuzz Top 5 - CA Wealth Tax Sparks Call for Levies in Other States, OR to Partially Disconnect from Federal Tax System & More

by
Rebekah Barton
on
2/27/2026
TaxBuzz Top 5 - CA Wealth Tax Sparks Call for Levies in Other States, OR to Partially Disconnect from Federal Tax System & More

Each Friday, TaxBuzz brings you the top five tax and accounting headlines you need to know from the workweek. We know life can get busy and you don't always have time to scroll through your news feed to stay informed.

We weed through all of the week's stories to showcase the most important updates in the tax and accounting world.

1. California Wealth Tax Push Sparks Calls For New Levies In Other States

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Credit: John Nilsson/Getty Images

A campaign in California to impose a one-time “billionaire wealth tax” on residents worth more than $1 billion is gaining momentum and inspiring similar tax-the-rich discussions in other parts of the United States. The proposal, backed by labor unions and progressive allies, would levy a significant tax on ultra-wealthy Californians’ net worth to raise tens of billions of dollars for healthcare, education and other public needs. Opponents, including Gov. Gavin Newsom and many tech industry leaders, warn the levy could spur billionaires to relocate and discourage investment, potentially shrinking the tax base.

The wealth tax debate is rippling beyond California: Bloomberg reports that similar efforts to consider new levies on the richest Americans are surfacing in states from Washington to Texas, often tied to broader calls for tax code modernization and revenue to support social programs. Advocates say targeting extreme wealth is a way to address inequality and fund public goods; critics argue it risks capital flight and economic distortion.

High-profile responses are already underway. Some Silicon Valley billionaires are reorganizing residences or business entities in low-tax states like Florida ahead of the potential tax, while billionaire-backed PACs are funding competing ballot initiatives to limit or block the hike.  The debate gained new visibility with a TV ad campaign tying the proposed wealth tax to funding for hospitals and warning of service cuts without new revenue, underscoring the political stakes.

For everyday Americans, the California billionaire tax fight matters beyond the state’s borders. If adopted — or if other states follow suit — it could reshape where wealthy individuals choose to live or invest, influence housing markets and create pressure on state tax codes nationwide as policymakers balance revenue needs with economic competitiveness.

2. Wisconsin State and Local Tax Burden Hits Record Low Amid Shifting Revenue Mix

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Credit: Henryk Sadura/Getty Images

Wisconsin’s state and local tax burden (SALT) — the share of personal income residents pay in combined taxes — has fallen to its lowest level in decades, driven by recent rounds of income and property tax cuts and strong economic growth that expanded the state’s tax base. According to an analysis of U.S. Census Bureau data, Wisconsin’s total tax burden dropped below the national average as lawmakers enacted policies aimed at reducing the share of income taken by government. 

Income tax cuts and property tax relief efforts account for much of the decline, with lawmakers pointing to competitive positioning compared with neighboring states and the attraction of businesses and workers as key policy goals. Opponents caution that a shrinking tax burden could strain funding for schools, local infrastructure and public safety if not offset by careful budget planning. 

The report shows that sales and excise taxes remain relatively steady, but their share of overall revenue has grown as income and property taxes have been trimmed, altering how the state generates funds for services. Analysts say this trend reflects broader debates nationwide over tax structure, revenue sufficiency and fairness.

For everyday Wisconsinites, the lower tax burden means more take-home income but could also translate into tighter local budgets, prompting discussions about balancing tax cuts with community needs such as schools and roads. The shift comes as other states weigh their own tax policies and fiscal strategies, including property tax reforms and targeted levies, reflecting a larger national conversation on how best to structure state and local tax systems. 

3. Oregon Legislature Votes to Partially Disconnect State Tax Code From Federal Rules

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Credit: Kellen Jenkins/Getty Images

Oregon lawmakers approved Senate Bill 1507, a measure that would disconnect parts of the state tax code from recent federal tax changes — specifically reversing select federal tax breaks that would automatically apply at the state level — in order to preserve hundreds of millions in tax revenue that otherwise would have been lost. The bill aims to protect funding for schools, healthcare and other public services by keeping around $300 million–$900 million that Oregon would otherwise forfeit under the federal changes.

Under current “rolling conformity,” Oregon automatically mirrors many federal tax provisions; SB 1507 removes automatic state adoption of certain breaks, including immediate bonus depreciation for business equipment, a new auto loan interest deduction and expanded exclusions for qualified small business stock.

Supporters say the partial disconnect doesn’t raise any new taxes per se but prevents tax revenue losses that would necessitate cuts to core services or future tax hikes, and it includes expanded Earned Income Tax Credit benefits for low- and moderate-income taxpayers.

Opponents, including Republican lawmakers and business groups, argue the changes effectively increase state taxes on businesses and individuals compared with recent federal policy, and some are organizing a referendum challenge to put the question on the ballot for voters later this year.

For Americans outside Oregon, this move reflects a broader state-level response to federal tax overhauls, highlighting how states can choose to decouple from federal tax cuts to stabilize budgets, a trend likely to influence other states facing similar revenue pressures.

4. Missouri Weighs Major Tax Abatement for AI Data Center to Spur Investment

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Credit: MattGush/Getty Images

The small city of Independence, Missouri is considering a major multiyear tax abatement for a proposed AI data center project that city officials say could bring new jobs, infrastructure upgrades and broader economic development to the region. The abatement under review would reduce or delay property and sales taxes for the developer during the facility’s construction and early operation to make the project financially viable in a competitive market.

Proponents argue that offering tax incentives is crucial to attracting high-tech investments like AI infrastructure, which can have high upfront costs and razor-thin margins without subsidies or abatements. Local leaders say the data center could expand the city’s tax base in the long run once the abatement expires and boost nearby commercial activity. 

Critics, including some residents and fiscal watchdogs, caution that such abatements shift near-term revenue burdens to other taxpayers by reducing funding for schools, roads and public safety during the exemption period. They also note that incentives for data centers and other big tech facilities have produced mixed outcomes in other communities, suggesting proponents are "blinded by dollar signs." 

City officials are reviewing how long the abatement should last and what performance guarantees (such as job creation thresholds) should be included to ensure community benefits outweigh deferred tax receipts.

If approved, the tax abatement would reflect a broader trend of local governments using targeted tax incentives to attract AI and data infrastructure projects, raising questions nationwide about how to balance economic development goals with equitable tax policy and sustainable public finances.

5. Kansas Homeowners Now Carry Larger Property Tax Burden Than Commercial Owners

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Credit: Alex Potemkin/Getty Images

Kansas homeowners are now paying a larger share of total property taxes than commercial property owners, a dramatic shift from decades past as soaring home values and longstanding commercial exemptions have tilted the tax base toward families. Residential properties now account for about 57% of all property taxes statewide, compared with 38% in the late 1990s, even though commercial property is still taxed at a higher statutory rate, a disparity driven by decades of exemptions and slower commercial value growth.

Lawmakers and local officials say the “sheer velocity” of residential home price increases has outpaced commercial assessments, pushing the lion’s share of funding for schools, roads and emergency services onto homeowners’ shoulders.

Commercial exemptions, including breaks for new equipment and economic development incentives, have pulled business assets off the tax rolls, leaving a smaller base over which to spread costs. Those exemptions can absolve properties from taxes for up to a decade, and “value is whatever you are willing to pay for it,” a state legislator noted, underscoring how market dynamics now favor residential tax growth.

The shift has fueled this session’s ongoing property-tax reform talks, including proposals to cap assessed valuation increases and expand transparency or protest rights for local tax hikes; efforts state lawmakers argue are necessary to rein in rising homeowner tax bills.

For everyday Kansans, the trend means families shoulder a disproportionate share of local tax revenue, prompting debates about fairness, economic incentives, and how best to balance revenue needs with property affordability for residents.

Which headline this week most interests you?

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Rebekah Barton

Rebekah Barton

Rebekah's search engine optimization career began completely by accident as a college student. Over the course of her career so far, she has "grown up" with the SEO industry, from writing content while juggling classes to managing her own teams of writers and overseeing SEO strategy in subsequent roles. She is excited to bring her passion for high-quality content to CountingWorks, Inc.

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