Commentary
It’s an old aphorism that if you tax something, you get less of it. Seven states are at risk of finding out exactly how that truism applies to wealth tax legislation introduced in each should their proposed taxes become law.
On Thursday, Jan. 19, seven states—California, Connecticut, Hawaii, Illinois, Maryland, New York, and Washington—rolled out various forms of wealth taxes and other taxes on high-income earners. These proposals include taxes on wealth, mark-to-market treatment of unrealized capital gains, surtaxes on income for high earners, corporate tax increases, and digital taxes.
Similar proposals have floundered at the federal level for good reason, but they are even more ill-advised at the state level. It’s no coincidence that each of the seven states save one (Washington) proposing this progressive tax wishlist lost taxpayers, on net, to domestic migration as of the latest IRS data release. In total, these seven states lost a net of over 300,000 households and $46.6 billion in adjusted gross income to other states….