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state legislatures
After Success in Massachusetts, Lawmakers in 10 States Push Wealth Tax
"If you want better roads, better schools, better healthcare, better public transit... or just a generally better life, then the best way of funding that is by taxing the ultrawealthy, not allowing them to exploit more tax loopholes."
Jan 24, 2024
While ultrawealthy Americans are unlikely to face any extra federal taxes any time soon due to the makeup of Congress, legislators in at least 10 U.S. states this year are aiming to pass tax policies targeting their richest residents to raise revenue for the common good.
Lawmakers in California, Connecticut, Hawaii, Illinois, Maryland, New York, and Washington introduced coordinated wealth tax bills a year ago. Some were inspired by U.S. Sen. Elizabeth Warren's (D-Mass.) 2020 presidential campaign proposal, which featured a 2% annual tax for assets above $50 million and a 3% tax for assets over $1 billion.
Now, less than a month into 2024, legislators in 10 states are developing or have introduced wealth tax bills. Amber Wallin of the State Revenue Alliance confirmed to The New York Times on Tuesday that all of the states that were working on such legislation last year, except Illinois, have been joined by Minnesota, Nevada, Pennsylvania, and Vermont.
"A new wealth tax in Massachusetts last year that was expected to raise $1 billion actually raised $1.5 billion, helping to fund green infrastructure, education, and childcare."
"The way our tax structure is set up, our middle class is carrying an undue burden, compared to folks at the top," Democratic Vermont Rep. Emilie Kornheiser (Windham-7), told the Times. "We want to make sure that all Vermonters are paying their fair share."
Kornheiser, who chairs the state House Committee on Ways and Means, is sponsoring H. 827, which would tax the unrealized gains of Vermonters with over $10 million in assets after exemptions, and H.828, which would impose a 3% surcharge on individuals' incomes of $500,000 or more.
The panel that Kornheiser leads discussed the legislation on Tuesday, though it remains to be seen whether the bills' backers can get them out of committee—where all of last year's proposals died. Democrats have supermajorities in both chambers of the Vermont General Assembly, but as Bloombergnoted, the hearing for the new bills was held "just hours after Republican Gov. Phil Scott presented a fiscal year 2025 budget that steers the state away from new taxes and fees."
It's not just Republican officials who pose potential roadblocks to increased taxes on the rich.
"Texas voters overwhelmingly passed a constitutional amendment in November that would preemptively bar any future efforts by the state to tax wealth or net worth," The Times pointed out. Earlier this month in California, Democratic Gov. Gavin Newsom, who is widely considered a possible 2028 presidential candidate, "rejected the idea of plugging the state's $37.9 billion budget deficit with a wealth tax."
Despite such opposition, polling suggests most Americans want the ultrarich to face tax hikes. Pew Research Center found last April that 6 in 10 U.S. adults say the feeling that some corporations and wealthy people don't pay their fair share bothers them a lot.
Even three-quarters of millionaires across G20 countries "support higher taxes on wealth to help address the cost-of-living crisis and improve public services," according to polling from last week. That survey was released as 260 millionaires and billionaires implored political leaders at the World Economic Forum in Davos, Switzerland to raise taxes on the wealthy.
The Institute for Policy Studies (IPS) highlighted on social media Wednesday that state lawmakers already have a model proving how such legislation can improve the lives of residents: Massachusetts' Fair Share Amendment, which was passed through a 2022 ballot initiative and requires those with incomes over $1 million to pay a 4% annual surtax.
"A new wealth tax in Massachusetts last year that was expected to raise $1 billion actually raised $1.5 billion, helping to fund green infrastructure, education, and childcare," IPS said in response to the Times reporting.
Justice Democrats also welcomed news of the state-level efforts,
saying that "if you want better roads, better schools, better healthcare, better public transit... or just a generally better life, then the best way of funding that is by taxing the ultrawealthy, not allowing them to exploit more tax loopholes."
The fresh push for wealth taxes comes as states face anticipated drops in revenue. In a November analysis for the Center on Budget and Policy Priorities (CBPP), senior adviser for state tax policy Wesley Tharpe found that as the Covid-19 pandemic raged from 2021-23, 26 states cut personal or corporate income tax rates, with half of them doing so multiple times.
Of those 26 states, only Connecticut, New York, and Pennsylvania have legislators working on wealth tax legislation. However, as Tharpe explained in a Wednesday blog post, federal pandemic relief has expired, and all the states that slashed taxes now "stand to collect an estimated $111 billion less over the next five years than they otherwise would have, with the price tag in lost revenues hitting nearly $30 billion a year by 2028."
"Shrinking revenues will jeopardize current levels of state support for vital public services like schools, health services, and income support programs," he warned. "They will also constrain states' future potential by limiting policymakers' ability to make new investments to tackle unmet or emerging needs and issues, such as child poverty, the health of pregnant or postpartum people, or housing affordability."
Tharpe argued that state policymakers "should seize the opportunity to break the tax-cut fever and pivot in a more equitable, prosperous, responsible, and forward-looking direction." He even provided some examples of states that "have recently shined a light on a different, brighter path of protecting and raising revenues to support current services and new investments."
In addition to Massachusetts' amendment, he pointed to Minnesota's crackdown on corporate tax avoidance and Washington's new excise tax on income from the sale of stocks and other investments, which targets the wealthiest 0.2% of Washingtonians.
"States including Colorado, Maine, New Jersey, New York, and Vermont, and the District of Columbia have also raised new revenues to fund initiatives like universal free school meals, expanded childcare and paid leave, and more affordable housing options," the CBPP expert noted. "More states should follow suit in 2024 and beyond."
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The Pro-Democracy Movement Fighting Back Against the GOP Nationwide Offers Hope for 2024
State-level progress on election protection, ballot access, and voting rights is a reflection of a basic reality documented in poll after poll: Voters want meaningful reforms to democracy.
Dec 19, 2023
Over the past few years, states across the country have passed laws that make voting more difficult and elections more vulnerable to partisan interference, and 2023 is no exception. But it is critical to remember that there is also flourishing pro-democracy movement that has pushed many states to make important strides in the opposite direction.
This past year, at least 24 states enacted over 50 laws that protect the freedom to vote, prevent attacks on the electoral process, crack down on gerrymandering, or strengthen campaign finance safeguards as of December 1, 2023. Yet state lawmakers cannot safeguard democracy on their own. Robust federal legislation is needed to ensure that democracy is protected across the country and that every voter has equal access to the ballot.
Among the most notable advances in 2023 was Minnesota’s passage of a transformative package of pro-voter reforms. Among them is automatic voter registration, bringing the total number of states with automatic voter registration to 23 plus the District of Columbia. This means that when eligible Minnesota residents interact with certain state agencies—including when applying for a driver’s license or state health insurance—they will automatically be registered to vote unless they choose to opt out. The legislation also allows 16- and 17-year-olds to pre-register to vote, enacts new protections for election workers, and creates a permanent absentee voter list.
While state reforms are critical, they are not a substitute for federal legislation that would set baseline national standards to protect the freedom to vote and make other critical changes.
Minnesota lawmakers also passed legislation this year that restores voting rights for people convicted of a felony, instantly re-enfranchising over 50,000 Minnesotans on parole, probation, or community release—and countless more in the future.
Another closely divided Midwestern state, Michigan, made important advances. This year, lawmakers passed a package of legislation to implement Proposal 2, a pro-voter constitutional amendment that was approved by Michigan voters in 2022 with nearly 60% of the vote. (Proposal 2 is one of several pro-democracy amendments that Michigan voters approved with overwhelming margins in the past few years.)
Michigan voters now have nine days of early voting, improved absentee ballot options, a higher number of ballot drop boxes, and an expanded list of acceptable voter IDs. This reform will benefit the many voters who prefer to vote by mail, a trend that exploded in popularity during the pandemic and remains highly popular in the state.
Additionally, Michigan lawmakers passed legislation this year protecting election officials from harassment and another that automatically registers individuals to vote upon release from incarceration—the first state to offer such an immediate and automatic restoration of voting rights.
In New Mexico, the legislature passed a wide-ranging bill that restores voting rights to individuals with a felony conviction, establishes automatic voter registration, and added voting rights protections for Native Americans. It also made it so voters who want to vote by mail only have to opt-in once.
The Nevada legislature passed a series of pro-voter laws this year that were signed by the state’s Republican governor: one that improves ballot access for eligible incarcerated voters by requiring jails to better provide voting materials, another that standardizes the design of mail-in ballot return envelopes and clarifies electioneering rules, and one that make it easier to vote on Native American reservations.
In another notable development, Connecticut became the sixth state to establish a state-level Voting Rights Act. In recent years, states have passed their own versions of the Voting Rights Act to protect voting access for historically disenfranchised groups. This trend is in response to two Supreme Court rulings that gutted the federal Voting Rights Act of 1965.
2023 also saw several states enact significant new campaign finance reforms. Minnesota improved campaign finance safeguards to boost transparency and deter foreign influence in elections. Almost 90% of Maine voters adopted new safeguards to prevent foreign governments and corporations from interfering in the state’s elections. And New York State’s groundbreaking small donor matching system went into effect, and over 150 candidates have already signed up to participate.
Important voting reforms are not exclusive to blue states, with many pro-democracy bills also passing in red and purple states this year. For example, Oklahoma codified protections for election officials, and Louisiana and Utah improved voting access for voters with disabilities. The divided Virginia legislature voted to ease absentee ballot requirements, a measure that was signed into law by a Republican governor. Lastly, an important win for direct democracy took place in Ohio, where 57% of voters rejected a proposal that would have increased the threshold required to pass citizen-initiated constitutional amendments from 50% to 60%.
This state-level progress is a reflection of a basic reality documented in poll after poll: Voters want meaningful reforms to democracy. And in 24 states this year, elected officials have responded, passing critical reforms that will improve the state of democracy for many Americans.
Ultimately though, while state reforms are critical, they are not a substitute for federal legislation that would set baseline national standards to protect the freedom to vote and make other critical changes. Access to the ballot box, secure election systems, fair district maps, and strong campaign finance laws are the basic safeguards needed to ensure we have a democracy that works for all Americans, regardless of where they live.
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Minnesota Dems Set Bar for State Legislatures, Passing Nearly Every Item on 'Transformational' Agenda
"The work we've done over the last five months will make a generational impact on our state—it will lower costs, improve lives, and cut child poverty," said Gov. Tim Walz.
May 23, 2023
Progressives are applauding what Minnesota House Speaker Melissa Hortman called the state's "transformational" legislative session, which ended on Tuesday after the Democratic-Farmer-Labor Party passed nearly every item on its agenda, securing economic justice, reproductive rights, and labor protections for Minnesotans.
With the DFL holding only a narrow majority in the state House and Senate—a six-vote and one-vote margin, respectively—policy researcher Will Stancil said on social media that "the scale of their achievement cannot be overstated."
"The Minnesota Legislature just completed what is probably the most productive session anywhere in the country since probably the New Deal," he said. "Sweeping bills and reforms across every area of life."
Stancil was among a number of progressives who highlighted nearly two dozen bills passed by the DFL and signed into law by Democratic Gov. Tim Walz, who posted an image of a whiteboard with party's legislative agenda on it along with the word, "Done."
\u201cDone \u2705\u201d— Governor Tim Walz (@Governor Tim Walz) 1684814396
The party's achievements over the past five months include a statewide paid family and medical leave program, which provides 20 weeks of leave; the legalization of recreational marijuana use; and a law providing free school meals to all public and charter school students—part of Walz's plan to "make Minnesota the best state in the country to raise a child."
\u201cAt Webster Elementary in Minneapolis, Gov. Walz signs School Meals bill, providing free breakfasts and lunches to all Minnesota public school students\u201d— John Croman (@John Croman) 1679079655
"The work we've done over the last five months will make a generational impact on our state—it will lower costs, improve lives, and cut child poverty," said Walz on Tuesday.
The party also passed a bill codifying Roe v. Wadeamid a nationwide assault on abortion rights, legal protections for transgender youths who receive gender-affirming healthcare in the state, and a bill setting a minimum wage for Uber and Lyft drivers, leading a crowd of drivers to give the legislation's sponsor, state Sen. Omar Fateh (D-62), a "hero's welcome" after it passed on Sunday.
\u201cSenator @OmarFatehMN gets the hero\u2019s welcome after his Transportation Drivers, aka Uber/Lyft bill, passes Senate\u201d— John Croman (@John Croman) 1684707459
"Rather than looking at the November numbers result and imposing some kind of self-limiting narrative about the scope of their mandate, Minnesota Democrats looked at their priorities and said, 'How much of the list can we get done?'" said Stancil. "Turns out the answer was 'Almost everything.'"
\u201cBut the key here is that the DFL clearly figured, no matter how small their majorities were, it was better, politically and morally, to choose doing good things over doing nothing. And it did, again and again.\u201d— Will Stancil (@Will Stancil) 1684811682
The party's achievements in Minnesota, said pro-workers' rights media organization More Perfect Union, should "set the precedent for state governments across the country."
"On the balance," said the organization, "Minnesota progressives took narrow House and Senate majorities following years of gridlock—and in their first session in power, managed to set the bar for Democratic legislatures."
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