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Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
"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."
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."
"Without significant and sustained federal investments to make housing affordable for people with the lowest incomes, the affordable housing and homelessness crises in this country will only continue to worsen," warned one campaigner.
The number of people in shelters, temporary housing, and unsheltered settings across the United States set a new record this year, "largely due to a sharp rise in the number of people who became homeless for the first time."
That's a key takeaway from an annual report released Friday by the U.S. Department of Housing and Urban Development (HUD).
On a single night in January 2023, "roughly 653,100 people—or about 20 of every 10,000 people in the United States—were experiencing homelessness," with about 60% in shelters and the remaining 40% unsheltered, according to HUD. That's a 12% increase from 2022 and the highest number of unhoused people since reporting began in 2007.
"We must address the main driver of homelessness and housing instability—the gap between low incomes and rent costs."
Jeff Olivet, executive director of the U.S. Interagency Council on Homelessness—the federal agency behind President Joe Biden's plan from last year to reduce homelessness 25% by 2025—toldThe Associated Press that extra assistance during the Covid-19 pandemic "held off the rise in homelessness that we are now seeing."
Research and advocacy groups responded to the HUD report by also highlighting the positive impacts of federal pandemic-era relief including emergency rental aid, a national moratorium on evictions for nonpayment, and the expanded child tax credit.
"The historic resources and protections provided during the pandemic kept millions of renters stably housed, and the success of these resources is shown by the decrease in homelessness over that same period," said National Low-Income Housing Coalition president and CEO Diane Yentel. "Just as these emergency resources were depleted and pandemic-era renter protections expired, however, renters reentered a brutal housing market, with skyrocketing rents and high inflation."
"Eviction filing rates have now reached or surpassed pre-pandemic averages in many communities, resulting in increased homelessness," she noted. "Without significant and sustained federal investments to make housing affordable for people with the lowest incomes, the affordable housing and homelessness crises in this country will only continue to worsen."
Olivet said that "while numerous factors drive homelessness, the most significant causes are the shortage of affordable homes and the high cost of housing that have left many Americans living paycheck to paycheck and one crisis away from homelessness."
National Alliance to End Homelessness CEO Ann Oliva called for funding "urgent and overdue investments in affordable housing and rental assistance to keep people housed, as well as in proven housing and supportive service models that rapidly reconnect people experiencing homelessness with permanent housing."
Peggy Bailey, vice president for housing and income security at the Center on Budget and Policy Priorities, also stressed the need for a funding boost, saying that "we have the tools to ensure everyone has a safe, stable place to live, but we've failed to invest in them."
"Homelessness is unacceptable," Bailey declared. "We must address the main driver of homelessness and housing instability—the gap between low incomes and rent costs. That means expanding rental assistance for all people with the lowest incomes."
HUD Secretary Marcia Fudge similarly said Friday that "homelessness is solvable and should not exist in the United States."
"From day one, this administration has put forth a comprehensive plan to tackle homelessness and we've acted aggressively and in conjunction with our federal, state, and local partners to address this challenge," she continued. "We've made positive strides, but there is still more work to be done. This data underscores the urgent need for support for proven solutions and strategies that help people quickly exit homelessness and that prevent homelessness in the first place."
Academics and advocates have long criticized the department's approach, which relies on reporting from a single night each January. Samuel Carlson, manager of research and outreach at the Chicago Coalition for the Homeless, toldThe Washington Post last year that "the HUD data is just catching a fraction of the people."
For that night in January, HUD found that roughly 186,100 people who reported experiencing homelessness, or over a quarter, were part of a family with children, a 16% increase from last year. Additionally, more than 1 in 5 people were age 55 or older, 35,574 were veterans, and 31% "reported having experienced chronic patterns of homelessness."
"People who identify as Black, African American, or African, as well as Indigenous people (including Native Americans and Pacific Islanders), continue to be overrepresented among the population experiencing homelessness," the report notes. "People who identify as Asian or Asian American experienced the greatest percentage increase among all people experiencing homelessness," while the largest numerical increase "was among people who identify as Hispanic or Latin(a)(o)(x)."
The report adds that over half "were in four states: California (28% of all people experiencing homelessness in the U.S, or 181,399 people); New York (16% or 103,200 people); Florida (5% or 30,756 people); and Washington (4% or 28,036 people)."
While progressive lawmakers have introduced federal legislation to help tackle the issue—from Congresswoman Cori Bush's (D-Mo.) Unhoused Bill of Rights to the Housing is a Human Right Act led by Reps. Pramila Jayapal (D-Wash.) and Grace Meng (D-N.Y.)—such measures are unlikely to advance with a GOP-controlled House and divided Senate.
"In divided government, appropriations bills must be bipartisan to pass," Sharon Parrott said, adding that the House must "shift its approach."
With a government shutdown narrowly avoided hours from the midnight Sunday deadline, Center for Budget and Policy Priorities president Sharon Parrott had advice for how lawmakers could move forward.
"With a stopgap measure in place, Congress needs to pass funding bills that meet the needs of people, communities, and the economy and eschew cuts already rejected in the debt ceiling agreement," Parrott wrote Saturday on the social media site formerly known as Twitter.
Parrott noted that the House was only able to pass a continuing resolution (CR) to keep the government temporarily funded Saturday when Speaker Kevin McCarthy (R-Calif.) abandoned attempts to pass partisan spending bills and instead pivoted to a bipartisan, clean CR with no additional social spending cuts or right-wing policies tacked on.
"They shouldn't repeat this mistake as Congress moves to complete full-year funding bills that meet the nation's needs."
"In divided government, appropriations bills must be bipartisan to pass," Parrott continued Saturday. "That's how the Senate has crafted funding bills this year, and today's House CR vote shows it is the only path forward. But that means the House needs to shift its approach."
In an August report, David Reich of the Center for Budget and Policy Priorities (CBPP) observed that the House appropriations bills up until that point had been passed along partisan lines, with Republicans including steeper cuts to non-military spending than those negotiated in the debt ceiling agreement, rolling back Inflation Reduction Act funding earmarked for addressing the climate crisis and modernizing the Internal Revenue Service, and tacked on riders attacking LGBTQ+ rights, racial justice, and reproductive freedom.
"The House's sharply partisan approach is likely to make it harder to reach an agreement on final funding bills," he predicted accurately.
Now that the House has passed a temporary clean CR, Parrott urged Republicans to learn from the experience.
"It took House Republicans too long to abandon their partisan approach of deep cuts and controversial riders in a CR," Parrott said. "They shouldn't repeat this mistake as Congress moves to complete full-year funding bills that meet the nation's needs."
If they return to pushing cuts and poison pills, she warned, "that would only waste more time and risk more shutdown drama."
Whether House Republicans will heed her advice remains to be seen. As of Sunday, most of the talk within the party revolved around whether or not the far-right flank would challenge McCarthy's speakership over Saturday's compromise.
Matt Gaetz (R-Fla.) toldABC News' This Week that he planned to file a motion in the coming week to remove McCarthy.
"I am relentless and I will continue pursue this objective," Gaetz said.
In response, McCarthy told Gaetz to "Bring it on" when speaking withCBS's Face the Nation.
"Let's get over with it and let's start governing," he said.
In a Sunday appearance on CNN's State of the Union, however, Rep. Alexandria Ocasio-Cortez questioned the Republicans' ability to do that.
"The Republican Party right now is completely out of step with the American people," she said, observing that even self-described moderates had voted for spending bills that would cut funding for low-income schools by 80%.
"This is not a moderate party, period," she said. "There are not moderates in the Republican Party."
As a shutdown loomed, She said the party had "run around the House like a Roomba until they found a door that House Democrats opened."