The debate over taxing America's wealthiest citizens is heating up, and Galaxy Digital Inc. (GLXY) CEO Mike Novogratz thinks everyone's fighting in the wrong arena.

Take It Federal

In a post on X Monday, the billionaire cryptocurrency mogul weighed in on the escalating conversation about wealth inequality and taxing the super-rich. His take? Stop arguing at the state and local level and move this to Washington.

"While Governors and Mayors seem to be driving the noise right now, this really needs to be a federal debate," Novogratz wrote, adding that "This isn't going to just go away."

His reasoning is pretty straightforward: most taxation happens at the federal level anyway. In 2025, the federal government pulled in $5.23 trillion in revenue, according to Treasury Department data, with individual income taxes as the primary source. And here's the kicker—Americans are far more likely to pack up and move from California to Texas than they are to actually leave the country to dodge taxes.

California's Billionaire Tax Flashpoint

Novogratz's comments arrive amid fierce controversy over California's proposed wealth tax. The 2026 Billionaire Tax Act would impose a one-time 5% levy on the net worth of billionaires living in the Golden State, with the goal of raising $100 billion to fund essential services.

Venture capitalist Chamath Palihapitiya has been particularly vocal against the measure, warning it could "kill entrepreneurship in California" and potentially force young startup founders into financial ruin. Meanwhile, Rep. Ro Khanna (D-Calif.) has defended the billionaire tax, even as some of the state's wealthiest residents threaten to relocate if it passes.

The Widening Gap

The backdrop to all this is a wealth gap that keeps getting wider. A November report from Oxfam revealed that the top 0.1% of households now control almost a quarter of the U.S. stock market's value, while the bottom half holds barely 1%.

Even more striking: households in the top 0.1% now hold 12.6% of U.S. assets, the highest concentration since the Federal Reserve started tracking wealth data in 1989.

As Novogratz suggests, this conversation isn't disappearing anytime soon. The question is whether states will continue battling it out individually, or if Congress will finally step into the ring.