Tax-the-rich hikes on the table in several states with already high rates

New Jersey is not the only state eyeing a millionaire’s tax

Tax hikes on the wealthy are being considered by lawmakers in a handful of states as governments struggle to figure out how to fill coronavirus-related budget deficits.

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New Jersey made headlines last week after state lawmakers approved a spending plan that included a marginal tax increase on individuals with incomes above $1 million.

But it is not the only state seeking to raise revenues by asking the rich to pay more.

WHAT NJ MILLIONAIRE'S TAX MEANS FOR YOUR FINANCES

A handful of other states are considering various proposals to tax the wealthy, including New York, California, Illinois and Massachusetts.

As previously reported by FOX Business, Illinoisans will vote on a ballot measure in November to allow the state to change its current income tax structure from a flat rate (4.95%) to a progressive system.

Lower-income individuals would pay rates between 4.75% and 4.9%. Those with incomes between $100,000 and $250,000 would pay the 4.95% rate. The top rate, however, for joint filers with incomes more than $250,000 would reach 7.75%; 7.85% on incomes more than $500,000 and 7.99% for people making more than $1 million.

Lawmakers in California, which already has the highest income rate of all U.S. states, have introduced a millionaire’s tax bill to raise rates on individuals earning more than $1 million by tacking on a graduated surcharge. That levy would begin at 1% for incomes over $1 million, rising to $3% on incomes over $2 million and 3.5% at $5 million.

A wealth tax proposal has also been introduced.

HIGH-TAX STATES NEED TO GET ‘CREATIVE’ TO LURE BACK WEALTHY RESIDENTS, EXPERT SAYS

New York lawmakers, along with New York City Mayor Bill de Blasio, are in favor of raising rates on the state’s wealthiest residents.

There have been a number of measures introduced into the state senate, including a billionaire mark to market tax on residents with net assets valued at $1 billion or more.

The state’s Democratic Gov. Andrew Cuomo, however, has said such a policy could put New York at a competitive disadvantage with other states – at a time when many of its wealthy taxpayers have taken up temporary – or permanent – residency elsewhere.

Cuomo has said that 1% of the state’s population pay 50% of its taxes.

In Massachusetts, lawmakers are also considering raising rates on individuals earning more than $1 million.

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Some experts are warning that raising rates, particularly given the situation created by the coronavirus pandemic, could accelerate a flight from high-tax states.

Craig Studnicky, co-founder and CEO of International Sales Group and RelatedISG, told FOX Business that an exodus from these areas began when the Tax Cuts and Jobs Act was passed in 2017.

He expects the pattern to continue through 2021, noting that wealthy individuals with mobility will be motivated to move by tax hikes.

“When millionaires move out of the state, they’re not paying the surcharge,” Studnicky added.

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