What California, Massachusetts’ ‘Billionaire Tax’ Plans on the Ballot Mean for Taxpayers

How the State Will Spend Billionaire Tax Revenues

While the proposed tax sounds similar, there are differences in how each state uses the revenue.

In Massachusetts, the tax is expected to generate about $1.3 billion in revenue in 2023 if voters pass the bill, according to Tufts University. analysisThe state aims to fund public education, roads, bridges and public transportation.

california taxes projected If passed, the bill would raise $3.5 billion to $5 billion annually, and the state plans to use the proceeds for its zero-emission vehicle program and wildfire response and prevention. .

Whether voters support higher income taxes or not, revenue plans often influence election day results, experts say.

“Voters have seen refusal to raise income taxes on high-income earners, even if it applies to a relatively small number of people,” said Jared Walzak, vice president of national projects for the Tax Foundation. “And we’ve seen them embrace income tax changes that affect a lot of people.”

We have seen voters reject higher income taxes on high-income earners, even when they apply to relatively few people.

Jared Walzak

Vice President of State Projects, Tax Foundation

Overall, there is one clear trend in the state tax vote.

With funds allocated to subsidize zero-emission vehicles, Proposition 30 was opposed by Governor Gavin Newsom, who believes it will negatively impact the state’s economy and provide no benefits “widely to the people of California.” I’m here.

Massachusetts promotes progressive taxation

Another factor that could affect voters is the current income tax structure in each state, experts say.

“Massachusetts has been talking about creating a progressive tax rate for a long time,” said Richard Orsier, senior policy associate at the Urban Brookings Center for Tax Policy. uniform income tax 5% regardless of income.

“Part of this is they want the ability to move some of the statewide tax burden up the ladder,” he said.

In contrast, California has a graduated state income tax system, with a top tax rate of 13.3% for individuals earning over $1 million a year.

“California already has very high top margins [tax] “Even if voters broadly support progressive taxation and support higher tax rates for high-income earners, they may feel that’s enough,” Walczak said.

Walczak said he doesn’t believe the proposed millionaire tax is part of a broader trend at the state level. in about 21 states from 2021 cut personal income taxand only one state, New York, and the District of Columbia, have raised the levy.

“Access to ballots alone does not read what voters want,” he added.

Federal plan to raise taxes on richest Americans stalled

regardless of Growing interest in taxing the ultra-richthe federal proposal failed to gain support.

After announcing a wealth tax duel proposal in the 2020 presidential primary, Sens Elizabeth WarrenD-mass, and Bernie SandersI-Vt., and other Democrats introduced the Ultra Millionaire Tax Act in March 2021, which imposes a 2% annual tax on assets over $50 million. 3% of assets over $1 billion.

And in October 2021, Senate Finance Committee Chairman Ron Wyden proposed. tax planning It affects Americans with wealth of $1 billion or more, or whose adjusted gross income exceeds $100 million for the third consecutive year.

March, President Joe Biden announced Wealth tax proposal as part of him 2023 budgetRequires a 20% tax on households with $100 million or more.

While many Americans support tax increase As for the ultra-rich, these plans failed to find widespread support. What California, Massachusetts’ ‘Billionaire Tax’ Plans on the Ballot Mean for Taxpayers

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