Wealthy Taxpayers Could Take a Hit in These 8 States

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Eight states that make up the Fund Our Future tax policy group floated legislation Thursday that seeks to raise taxes on the rich, in lieu of a federal wealth tax.

“It’s time to put billionaires and ultra-millionaires on notice — that it’s time that they pay what they owe and that state legislators are the ones to make them do it,” Sen. Noel Frame, D-Wash., said Thursday on a Fund Our Future press call.

Fund Our Future members include Hawaii, Minnesota, New York, California, Maryland, Washington, Connecticut and Illinois and are part of the State Innovation Exchange and State Revenue Alliance.

As of Thursday, drafts of bills were available, but not all of the bills have been officially introduced or named. Rep. Will Guzzardi, a Democrat in the Illinois General Assembly, told ThinkAdvisor Thursday in an email that his draft bill will be introduced “within the next week.”

The eight states that make up Fund Our Future hold the lion’s share of the nation’s billionaires, according to Frame. Washington state has 97 billionaires, Frame said, “many more billionaires than we thought we did.”

Eight of the wealthiest people in the U.S. reside in Washington state, Frame said, and their individual wealth ranges from $3.3 billion to $151 billion.

The Tax Foundation notes in a recent blog post that the New York proposal “would yield a nearly 30% tax on wealthy New York City residents’ capital gains income, about 50% higher than the 20% federal tax on long-term capital gains.”

In other state plans, “lower estate tax thresholds would impose the tax on the upper middle class and not just the very wealthy — including the small businesses and farms policymakers have long worked to protect from estate taxes to avoid forcing them to break up to pay the tax,” the Tax Foundation writes.