Will this tax spread? “Depends on a state’s economic condition and if each of the states want growth in new residents or to just tax the existing residents,” Diaz said.
“New taxes on those with the ability to pay will continue to be a trend,” Rand said. “The real question lawmakers need to ask themselves is whether those with the ability to pay will stick around long enough for these states to receive the projected revenue.” California also recently proposed a new estate tax on residents with a significantly lower threshold than the similar federal tax.
“States are copycats,” Morris said. “States will increase their individual tax burdens.”
Is there any way around the millionaires’ tax? Again, depends on the state. “California is a community-property state, which means earned income and earnings from property acquired during the marriage are treated as being 50/50 among the spouses,” Foss said, making it possible to avoid the 1-percent tax by filing differently on the state form than on the federal. Flexibility in filing statuses for state versus federal tax returns vary state to state, she added.