What 'millionaire tax' plans on the ballot in California and Massachusetts mean for top earners

While the projected taxes dependable similar, determination are differences successful however each authorities plans to usage the revenue. 

In Massachusetts, assuming voters walk the measure, the taxation is expected to make astir $1.3 cardinal of gross successful 2023, according to a Tufts University analysis. The authorities aims to usage the gross to money nationalist education, roads, bridges and nationalist transportation.

California's taxation is projected to bring successful $3.5 cardinal to $5 billion annually should it pass, and the authorities plans to usage the gross to wage for zero-emissions conveyance programs and wildfire effect and prevention.

Whether voters enactment higher income taxes oregon not, gross plans often impact the results connected Election Day, experts say.

"We've seen voters cull income taxation increases connected precocious earners, adjacent erstwhile it applies to comparatively fewer people," said Jared Walczak, vice president of authorities projects astatine the Tax Foundation. "And we've seen them clasp income taxation changes that would impact many."

Overall, there's 1 wide inclination with authorities taxation ballots: Voters attraction astir the plans for the money, helium said.

With funds earmarked for zero-emissions conveyance subsidies, Proposition 30 is opposed by Gov. Gavin Newsom, who believes the measurement volition negatively interaction the state's system without a payment that "broadly accrues to Californians," Walczak said.

Another origin that whitethorn impact voters is the existent income taxation operation successful each state, experts say.

"Massachusetts has been talking astir creating a progressive taxation complaint for a agelong time," said Richard Auxier, elder argumentation subordinate astatine the Urban-Brookings Tax Policy Center, noting the existent flat income tax is 5% careless of income.

"Part of this is they privation that quality to displacement immoderate of the wide state's taxation load up the ladder," helium said.

By contrast, California has a graduated authorities income taxation system, with a apical complaint of 13.3% for individuals making implicit $1 cardinal per year.

"California already has precise precocious apical marginal [tax] rates," Walczak said. "Even if voters are broadly successful favour of progressive taxes and enactment higher rates connected precocious earners, they whitethorn consciousness that it goes acold enough."

Walczak said helium does not judge the projected millionaire taxes are portion of a broader inclination astatine the authorities level. Since 2021, immoderate 21 states person slashed idiosyncratic income taxes, and lone 1 state, New York, and the District of Columbia person raised levies. 

"You can't work overmuch into what voters privation based simply connected ballot access," helium added.

Despite the growing involvement successful taxing the ultrawealthy, national proposals person failed to summation traction. 

After releasing dueling wealthiness taxation proposals during the 2020 statesmanlike primaries, Sens. Elizabeth Warren, D-Mass., and Bernie Sanders, I-Vt., on with different Democrats, successful March 2021 floated the Ultra-Millionaire Tax Act, a 2% yearly taxation connected wealthiness implicit $50 cardinal and 3% connected wealthiness implicit $1 billion.

And Senate Finance Committee Chairman Ron Wyden, D-Ore., successful October 2021 projected a program for a tax affecting Americans with much than $1 cardinal of wealthiness oregon an adjusted gross income exceeding $100 cardinal for 3 consecutive years.

In March, President Joe Biden unveiled a wealth taxation proposal arsenic portion of his 2023 budget, calling for a 20% levy connected households worthy much than $100 million.

While galore Americans approve of higher taxes connected the ultrawealthy, these plans person failed to summation wide support.