The tax-the-rich proposals pending in states are "a reflection of a broader national trend towards recognizing what voters have felt for a long time -- that high income individuals and corporations are paying too little," said Carl Davis, research director of the left-leaning Institute on Taxation and Economic Policy.
‘Tapped Out’
Democrats in Washington’s House of Representatives are seeking a new excise tax on the sale of stocks and bonds when they generate profits of $200,000 or more for married couples. It could raise $2.7 billion between fiscal 2019 and 2023 and affect less than 14,000 households, according to the proposal. The state doesn’t have a personal or corporate income tax.
Gael Tarleton, chair of the Washington House finance committee, said wealthy residents are paying less of their income to "critical investments" than other state residents. The capital gains tax "would not even make a dent in their wealth," she said.
Massachusetts Democrats have proposed a 4 percent tax on income above $1 million, raising about $2 billion a year for education and transit.
The middle class is "tapped out" on taxes due to the state’s high cost of living, said Massachusetts state Senator Jason Lewis. "The wealthiest in our state are in a position where they could contribute a little bit more to help make these investments possible," he said.
The Democrats’ push has notched an early win in New Mexico, where the party controls the legislature and governor’s mansion. Lawmakers passed a bill that would raise the top personal income-tax rate to 5.9 percent from 4.9 percent, which would affect married filers with taxable incomes above $315,000, if revenue fails to meet a growth target.
Rod Montoya, a Republican state representative, said he thinks the changes will ultimately work out to his party’s advantage as people are hit with higher taxes. "A lot of the decisions made this year are going to really backfire," he said.
This article provided by Bloomberg News.