TALK OF TAX HIKES ISN’T LIMITED TO Washington, D.C. Several states are also considering boosting taxes on their most prosperous residents.
Jay Inslee, the governor of Washington state, has proposed a 9% capital gains rate on gains of more than $25,000 ($50,000 for married couples). New York Governor Andrew Cuomo has proposed five new, higher tax rates for individuals who earn $5 million or more, with a top rate of 10.82%. Minnesota Governor Tim Walz has proposed a new top tax rate of 10.85% for couples with income of more than $1 million and singles with income of more than $500,000. Walz also wants to impose a capital gains tax of between 1.5% and 4% on profits that exceed $500,000, as well as reduce the state’s exemption from estate taxes.
Pennsylvania Governor Tom Wolf’s plan to raise revenue is broader, in that it would increase the state’s flat income tax from 3.07% to 4.49%. But Wolf also wants to expand the amount of income that low- and middle-income residents can exclude from state taxes, which would end up reducing taxes for those families.
Proponents of the tax hikes say they would help close budget gaps exacerbated by the pandemic, which has forced some states to lay off employees and cut services. But critics say the increases could compel high earners to depart for friendlier jurisdictions.
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