Taylor Swift Tax: States Eye New Levy on the Wealthy

Rhode Island’s new “Taylor Swift Tax” has put luxury second homes in the spotlight, fueling a broader debate about wealth, housing, and fairness.

The levy, which adds a surcharge on second residences worth more than $1 million, directly impacts properties like Taylor Swift’s $28 million Watch Hill mansion, raising her annual property bill to roughly $337,000.

Supporters say the tax is a way to balance budgets, fund public services, and ease the housing crisis by asking the wealthiest to contribute more. But critics argue it unfairly punishes seasonal homeowners who already pay hefty taxes and spend freely in local communities, driving business for restaurants, shops, and hotels.

Montana has rolled out similar rules, increasing second-home tax bills by an average of 68%, while California’s “mansion tax” has raised far less than promised, suggesting potential pitfalls.

With luxury housing markets booming alongside middle-class struggles, states from Cape Cod to Los Angeles see taxing the wealthy as an attractive fix, but experts warn it could slow transactions, hurt local economies, and ultimately backfire.