Lawmakers call on 8 states to pass wealth taxes to help pay for childcare, affordable housing, and ending homelessness
- Lawmakers and advocates are pushing to pass wealth taxes in eight states, after a federal plan failed to pass.
- The taxes would target both realized and unrealized capital gains, assets like stocks and bonds.
Across eight states — California, Connecticut, Illinois, Hawaii, Maryland, Minnesota, New York, and Washington — legislators and advocates are pushing for a suite of tax measures aimed at taxing the assets of the ultra-wealthy, and increasing the amount of tax they pay when selling off those assets.
"It's more important than ever that we use our state legislatures to showcase the incredible opportunity to really skew the scales again, towards working people, not against them," Pramila Jayapal, a Democratic representative from Washington and chair of the Congressional Progressive Caucus, said in a press conference.
"That's really what makes today's announcement so important," she said. "By advancing popular, bold tax justice measures simultaneously across the country, we are showing the American people what's possible and that every person and every place matters."
In Washington, state senator Noel Frame is calling for a narrow property tax on extreme wealth. Under that framework, Washington residents holding assets worth over $250 million would see a 1% property tax on that wealth. Frame said that the tax would raise $3 billion annually in Washington, where there is an "irrefutable" housing crisis.
"Funding our future means using the revenue generated from the Washington state wealth tax to expand access to affordable homes for working Washingtonians," Frame said.
Gustavo Rivera, a New York state senator, wants to target the capital gains of the ultra-wealthy — the taxes paid on selling off assets, which are often taxed at a far lower rate than a straightforward paycheck. In Illinois, where a tax on unrealized capital gains is on the table, the revenue would go towards "ending homelessness, fully funding public education, and expanding childcare for every family in our state," according to state representative Will Guzzardi.
In California, a wealth tax on the unrealized capital gains of the top 0.1% would yield nearly $22 billion, according to California assembly member Alex Lee.
"For far too long, middle income residents have shouldered the burden, while the ultra-wealthy hoard their wealth with effective tax rates lower than the average American," Lee said.
Targeting capital gains and unrealized gains are not a new idea, but haven't been able to pick up the federal traction they need to be implemented across the country. President Joe Biden has proposed increasing the capital gains rate for the highest earners, and a minimum income tax on billionaires' paychecks and assets.
However, federal action has alluded Democrats and the Biden administrations, with centrists Kyrsten Sinema and Joe Manchin torpedoing potential hikes. The legislators hope that a push for new policies across the states can be a first step towards broader action — although the measures need to pass first.
Frame said that, along with other legislators, she met with senior officials at the White House in December. Discussions of tax policy and the proposal in Washington were met with "warmth and interest," she said.
The lawmakers are also bracing for pushback, anticipating legal action and threats.
"We're used to it," Frame said. "We're always going to get sued when we try to get the wealthy to pay what they owe."
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