Tax the rich? Liberals renew push for state wealth taxes

Supporters of taxes on the very rich contend that people are emerging from the COVID-19 pandemic with a bigger appetite for what they’re calling “tax justice.” Bills announced Thursday in California, New York, Illinois, Hawaii, Maryland, Minnesota, Washington and Connecticut vary in their approaches to hiking taxes, but all revolve around the idea that the richest Americans need to pay more. The Tax Foundation, a conservative-leaning policy organization, called wealth taxes — which levy taxes not just on new income, but on a person’s total assets — “economically destructive.” It also said in a statement that such taxes create “perverse incentives” for the rich to avoid taxes, including simply moving to states with a lower tax burden. In Connecticut, progressive lawmakers are proposing more traditional hikes: a higher tax rate on capital gains earnings for wealthy taxpayers and higher personal income tax rates for millionaires, “We need to ensure that the wealthiest in our state truly pay what they owe and not expect working families across our state to continue to subsidize their share,” said state Rep. Kate Farrar, a deputy majority leader in the Democrat-controlled House of Representatives. The lowest-paid workers in many states often see a far bigger percentage of their income go to pay taxes every year than the very rich, particularly in states that don’t have a graduated income tax.