As inequality grows, states are stepping up where the federal government hasn\u2019t. \u201cIt\u2019s a movement,\u201d says Patriotic Millionaire\u2019s Chuck Collins.<\/p>\n
By\u00a0Mark Kreidler<\/a>, Capital & Main<\/p>\n This story is produced by the award-winning journalism nonprofit\u00a0Capital & Main<\/a> and co-published here with permission.<\/p>\n Washington isn\u2019t the first state\u00a0to pass a so-called millionaire tax, and it won\u2019t be the last. Massachusetts\u2019 millionaire surcharge has been in place since 2023, California may be voting to tax billionaires this fall, and at least a half-dozen other states are actively considering ways to balance budgets or help their working classes via taxes on the ultra-wealthy.<\/p>\n So no, the Evergreen State\u2019s action is not unique. But that\u2019s not the same as saying it doesn\u2019t matter.<\/p>\n Instead, the\u00a0measure<\/a>, approved a week ago by Washington legislators after a grueling session that included a 24-hour filibuster by opposing Republicans, ought to be seen for what it is: the latest in a series of attempts by states to tax the growing uber-rich class in ways the Trump administration won\u2019t.<\/p>\n \u201cAbsolutely, it\u2019s a movement,\u201d said Chuck Collins, one of the founders of Patriotic Millionaires, a Washington, D.C.-based organization that advocates for tax reform in the United States, especially when it comes to how much \u2014 or how little \u2014 the wealthy pay.<\/p>\n \u201cPart of it stems from the failure to address this situation at the federal level,\u201d Collins said. \u201cYou know, we just gave the top 1% in all the states a massive tax reduction [via the so-called Big Beautiful Bill]. It\u2019s a good time to make the case that wealthy, higher-income households should pay a bit more.\u201d<\/p>\n That includes Collins and the other members of his group, who describe themselves as high-net-worth individuals who believe that they and those like them should be paying more in taxes. As the Patriotic Millionaires website\u00a0puts it<\/a>, \u201cWealthy Americans like us have rigged the tax codes to give ourselves countless handouts, leaving working people paying higher rates than billionaires.\u201d<\/p>\n So long as the Donald Trump-led Republican Party remains in charge at the federal level, that isn\u2019t likely to change. Between tax cuts for the rich and massive reductions in federal funding for such critical programs as Medicaid, states have been left to figure out for themselves how to keep lights on, doors open and emergencies managed.<\/p>\n * * *<\/p>\n Washington just took\u00a0a first step, and in so doing it made history. It\u2019s one of only nine states that until now didn\u2019t tax personal income \u2014 and even after passing this measure, it mostly won\u2019t.<\/p>\n The new tax, which Washington Gov. Bob Ferguson has announced his intention to sign, is scheduled to go into effect in 2028. It applies a\u00a09.9% rate only to personal income\u00a0above\u00a0$1 million<\/a>. The state estimates it will affect about 20,000 households, or less than one-half of one percent of the Washington population.<\/p>\n Washington\u2019s state system has long relied on sales and business taxes instead of personal income, marking it as one of the most regressive approaches in the country \u2014 meaning the tax burden falls heaviest on those least able to shoulder it. The left-leaning Institution on Taxation and Economic Policy found in a\u00a0recent analysis<\/a>\u00a0that the poorest 20% of Washington families pay 13.8% of their income to taxes, while the one-percenters \u2014 the wealthy elite \u2014 pay just 4.1%.<\/p>\n That\u2019s a broken system, established when Washington\u2019s economy was driven by timber and food producers, not the tech leaders \u2014 Microsoft, Amazon, etc. \u2014 and massive defense contractors like Boeing that dominate the state\u2019s financial landscape now. \u201cWe still have a tax code based on apples and cherries, while building some global-leading technology every which way you throw a rock,\u201d Democratic Washington state Rep. Brianna Thomas told\u00a0Fortune<\/a>.<\/p>\n The state plans to use the tax revenue, an estimated $3 billion to $4 billion per year, to pay for school lunches for kids, expand a family tax credit to include another 460,000 low-income households, and fund other critical services the state budget can\u2019t otherwise afford.<\/p>\n In that respect, the legislation echoes some of the themes of California\u2019s potential billionaire tax. That proposal, which still has to qualify for the November ballot, would levy a one-time, 5% tax on the total wealth of the state\u2019s roughly 200 billionaires, with the money being used mostly to restore health care services that otherwise would wither under the Trump-led federal budget cuts.<\/p>\n And both of those efforts have followed in the wake of Massachusetts, whose voters in 2022 passed a 4% surcharge on annual taxable income that exceeds $1 million. Since the tax took effect in 2023, the state has collected\u00a0nearly $6 billion<\/a>\u00a0in additional tax revenue \u2014 and the number of millionaires in the state has grown, not shrunk.<\/p>\n * * *<\/p>\n That last point bears note,\u00a0if only because\u00a0the opposition playbook<\/a>\u00a0to a wealth tax is so dependable. In both California and Washington, critics immediately began suggesting that rich people will flee those states, and that the resulting overall reduction in tax payments will defeat any short-term revenue gains. But tax flight among the ultra-wealthy is\u00a0largely a myth<\/a>.<\/p>\n \u201cIt\u2019s a stickiness issue,\u201d said Patriotic Millionaires\u2019 Collins, who inherited his own fortune through his great-grandfather Oscar Mayer\u2019s processed meat company. \u201cPeople like to stay and live in their communities, and they know that they get what they pay for \u2014 that a state with adequate tax money is a good place to live.\u201d<\/p>\n Washington\u2019s new tax will almost certainly face a court challenge, just as California\u2019s would if it passes. The mere specter of legal hurdles, though, doesn\u2019t seem to be preventing states from considering similar acts. Colorado, Connecticut, Hawaii, Michigan, New York and Rhode Island are all debating using wealth taxes to close holes in their budgets and keep critical state services flowing to residents who need them, with New York City Mayor Zohran Mamdani\u00a0publicly pushing<\/a>\u00a0his state\u2019s Legislature to act.<\/p>\n Collins, who worked for nearly 30 years on the idea of a wealth tax in Massachusetts before succeeding, said his organization has been advocating for a Vermont measure as well. New Jersey has had a wealth tax in place since 2020. Minnesota, meanwhile, implemented a tax on investment income over $1 million in 2024.<\/p>\n Clearly, despite the recent noise, a wealth tax is not a new concept. The Washington state Legislature\u2019s act, though, underscores a growing urgency \u2014 even among careful, job-insecure lawmakers \u2014 to correct tax imbalances that in some cases have been generations in the making, and to address real needs.<\/p>\n \u201cYou can have a theoretical debate about taxation, but when you put an actual proposal on the table, it focuses attention and engagement,\u201d Collins said. In the absence of such focus in Washington, D.C., states are increasingly taking matters into their own hands.<\/p>\n","protected":false},"excerpt":{"rendered":"As inequality grows, states are stepping up where the federal government hasn\u2019t. \u201cIt\u2019s a movement,\u201d says Patriotic Millionaire\u2019s…\n","protected":false},"author":2,"featured_media":248593,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[32],"tags":[121,123,122,1694],"class_list":{"0":"post-248592","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-sacramento","8":"tag-sacramento","9":"tag-sacramento-headlines","10":"tag-sacramento-news","11":"tag-taxes"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/248592","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=248592"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/248592\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/248593"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=248592"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=248592"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=248592"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}