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Known as Proposition 208, the measure aims to essentially set up a fifth income tax bracket for wealthy residents that would raise the top rate to 8% from 4.5% through an additional 3.5% tax on incomes above $250,000, and $500,000 for joint filers.
The tax is expected to raise an estimated $940 million per year, and revenue would be used for education-related expenses.
As previously reported by FOX Business, Republican economists authored a report that estimated the measure would cost 237,000 jobs during the course of a decade and 700,000 people in net instate migration during the same time period.
Additionally, they said personal income would decline by $25.5 billion over 10 years, while the state’s overall competitiveness declines.
Researchers acknowledged that other studies have found the measure would have less dramatic effects on the state’s economy.
For example, the Grand Canyon Institute projected a loss of 10,000 jobs over 10 years, and it estimated fewer than 100 tax filers are likely to move because of the tax hike.
Proponents argue that the revenue is desperately needed by schools throughout the state.
A number of tax-related measures were on other state ballots this November, including Illinois where voters rejected a constitutional amendment that would have allowed for a progressive income tax bracket system. As it stands, the state constitution calls for a flat tax rate, which is 4.95%.
Tax measures have been considered by many states and localities this year in response to a deep recession brought on by the coronavirus pandemic.