Billionaires in blue states face coordinated wealth-tax bills

Left-leaning proponents of taxing the assets held by America’s billionaires have a new target: In lieu of a federal wealth tax, state lawmakers want to tax billionaires where they live, in states like California, Washington and New York.

A group of legislators in statehouses across the country has coordinated to introduce bills simultaneously in seven states later this week, with the same goal of raising taxes on the rich.

“The point here is to make sure we do at the state level what is not being done at the federal level,” said Gustavo Rivera (D), a New York state senator who is part of the seven-state group.

Sponsors told The Washington Post that they will introduce their bills on Thursday in California, Connecticut, Hawaiʻi, Illinois, Maryland, New York and Washington, and shared the text of their draft bills.

Connecticut, Hawaiʻi, Maryland and New York lawmakers, meanwhile, are proposing a change based on some Democrats’ frustration with national tax policy. The federal government taxes capital gains—the income that a person makes from selling a stock or similar asset—at a separate rate from other income. The highest earners pay a 20 percent tax on capital gains while paying a 37 percent tax on wages—a disparity that some Democrats want to close.

If federal rates on capital gains are lower, state rates on capital gains should be higher, these lawmakers argue.

And in Hawaiʻi, Maryland and New York, bills will propose a measure that would affect more significantly a middle tier of rich people, not just the ultrarich: lowering the exemption cutoff for the estate tax.