Blue states around the U.S. are planning tax hikes on wealthy residents to bring in additional revenue through a variety of proposals, including one state's so-called "Taylor Swift tax."
The moves come after the enactment of the One Big Beautiful Bill Act (OBBBA) by President Donald Trump and Republicans in Congress, which permanently extended many of the 2017 tax cuts and included other new tax relief provisions as well as spending cuts to programs such as Medicaid.
Democrats argue these tax hike proposals are needed to help plug gaps in state budgets and offset any lost federal dollars for Medicaid and other programs.
The state of Rhode Island enacted a new tax this summer that will impose a special levy on vacation homes valued at $1 million or more, which has become known as the "Taylor Swift tax" due to the music star owning a home in an affluent part of Westerly, Rhode Island, The Wall Street Journal reported.
Rhode Island's "Taylor Swift tax" imposes a tax of $2.50 for every $500 of assessed value above $1 million, which a Realtor.com analysis estimated would result in an additional $136,000 in property taxes on her luxury home in the Watch Hill neighborhood that's valued at $17 million.
Montana wants to increase property taxes on non-primary residences, adopting a new reform that will reduce property tax rates for owner-occupied primary homes while hiking the rate to 1.9% for second homes or short-term rentals, with industrial properties also set to face higher levies.