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Demonstrators in Washington, D.C. rally in support of a financial transaction tax on April 20, 2013. (Photo: Elvert Barnes/flickr/cc)
States have an opportunity to act to close the loopholes that hide and protect the wealth of the top 1%, remedy the impact of the new federal tax law that lowers taxes on the wealthy, and make critical investments in infrastructure, energy systems, and programs that create broader opportunity and shared prosperity. Concentrations of wealth are distorting our economy and undermining our democracy and civic health. State Administrations and State Legislatures can act to close the loopholes, put a brake on economic inequality and concentrations of wealth, and generate significant revenue.
Here is a menu of some of the most promising options.
TAXES ON HIGH-INCOME EARNERS
The strong majority of Americans support progressive taxes on the rich. A joint Stanford-Treasury Department report showed that high taxes do not drive millionaires to move across state lines. State legislatures have increased taxes on the wealthy. In 2018, the New Jersey legislature increased taxes on incomes over $5 million. New York State and New York City have both increased taxes on high-income households as has Washington, D.C.
In 2016, tax increases on high-income earners passed in both states where they were on the ballot, California and Maine. In California, voters extended the nation's highest top tax rate (13.3 percent) on those making more than $1 million per year, delivering an estimated $4 billion to $9 billion in annual revenue for human needs. Maine voters passed a 3 percent surtax on income over $200,000.
In 2018, Maine activists organized the first ballot initiative to fund universal home care through a payroll tax increase of 1.9% on salaries and wages over $127,000 a year. In the face of a heavily funded opposition campaign, the initiative failed to get majority support. But Caring Across Generations and other groups are working to apply lessons from this effort to similar campaigns in other states.
STATE ESTATE TAXATION
The estate tax is a levy on large fortunes when they are transferred from one generation to the next, with exemption thresholds that shield middle and working-class families. Before the Bush tax cuts passed in 2001, every state in the nation collected revenue from the state estate tax credit, which sent the first 16 percent of federal estate tax revenue to the states. Congress phased out this tax credit gradually until fully repealing it in 2005. Re-instating a progressive state estate tax in states that lost their state estate tax could generate significant revenue while reducing the concentration of wealth in intergenerational wealth dynasties.
In 2006, Washington state voters supported their state estate tax by a nearly 2-to-1 margin with the revenue raised directly funding education in the state (an education opportunity trust fund). A state estate tax has the power to fund critically important public initiatives like debt-free higher education and universal long-term care while halting the rising wealth at the very top.
The California College for All coalition is pushing legislation (and possibly a 2020 initiative) to levy a progressive tax on California estates and fund free public higher education, restoring the state's leadership role on accessible college. The estate tax would generate an estimated $4 billion a year and provide aid to 2.6 million California residents.
TAX ON CORPORATIONS WITH EXTREME GAPS BETWEEN CEO AND WORKER PAY
In 2016, the city of Portland, Oregon, adopted the world's first tax penalty on corporations with extreme gaps between their CEO and worker pay. The city's current business license tax is 2.2 percent of adjusted net income. The surtax will be 10 percent of the business tax liability for companies with a CEO-worker pay ratio of more than 100-to-1 and 25 percent for companies with a ratio of more than 250-to-1. More than 500 corporations that do business in the city, including mega-firms like Wells Fargo and Walmart, are subject to the surtax.
Such tax penalties are easy to administer because U.S. publicly held corporations began reporting the ratio between their CEO and median worker pay to the SEC in 2018.
Lawmakers in seven U.S. states and in the U.S. Congress have introduced legislation similar to the Portland tax: California, Connecticut, Illinois, Massachusetts, Minnesota, Rhode Island, and Washington. These efforts build on the living wage movement by creating an incentive to pull down the top end of the pay scale while sending a message that everyone in a workplace contributes value (not just the CEO).
CARRIED INTEREST TAX
States with significant financial sectors can take action to make up for Washington's failure to close the "carried interest" loophole, which allows private equity and hedge fund managers to reduce their tax bills by claiming a large share of their earnings as "capital gains" instead of ordinary income. This has allowed many of the wealthiest Americans to pay lower rates than firefighters and teachers. Legislation to close the carried interest loophole has been introduced in New York, New Jersey, Massachusetts, Connecticut, Rhode Island, Maryland, the District of Columbia, and Illinois. New York Governor Andrew Cuomo has included a state-level "carried interest fairness fee" in his budget proposal two years in a row.
FINANCIAL TRANSACTION TAX
A financial transaction tax is a tiny fee - at rates of a fraction of a percent - on trades of financial instruments, such as stocks, bonds, and derivatives. Such taxes are promoted as having the dual benefits of discouraging short-term speculation while generating significant revenue. The notion of instituting a Financial Transaction Tax has gained increased attention at the federal level in recent years, but Congress has failed to take action.
This would not be relevant in states that do not have a large trading exchange. The Illinois state legislature is considering a bill that would place fees of $1-$2 per contract on Chicago's commodities and financial exchanges, with revenue estimated at $10 billion to $12 billion per year.
STATE CAPITAL GAINS TAX
A capital gains tax is a levy on income from investments rather than wages. In the 42 states (including DC) that impose capital gains taxes, rates range from 3.1 percent in Pennsylvania to 13.3 percent in California. States without a capital gains tax should implement one and states that have one should increase the rate to at least 10 percent. Raising or introducing such taxes would mostly impact the wealthy, since the top 1 percent owns half of the nation's financial wealth and the bottom 50 percent only own 0.5 percent of financial wealth. State capital gains taxes help ensure fairness between those who work paycheck to paycheck and those who pocket dividends.
HIGH-END REAL ESTATE TAXES TO FUND AFFORDABLE HOUSING AND OTHER PRIORITIES
Cities and States should consider taxes on luxury real estate investments, particularly unoccupied, vacant properties. A huge number of new luxury high-rise properties have been purchased, with many vacant and unoccupied, and many purchased by shell corporations, creating a method for the ultra-wealthy to hide their wealth. The impact has been to disrupt local real estate markets and push up existing housing prices for rent or sale higher and higher. States can pass enabling legislation to allow cities and localities to address this problem through taxes on vacant, unoccupied luxury units, and can consider transfer taxes, and laws to require beneficial ownership transparency in real estate transactions. States could also institute graduated real estate transfer taxes, taxing properties transferring over $1 million at progressively higher rates.
In 2016, San Francisco voters approved a tax on high-end real estate transactions that contribute to gentrification. The tax raises additional revenue from commercial and residential real estate transfers over $5 million. Funds have been used to provide free tuition and stipends to San Francisco residents at the city's community college.
New York City has implemented a new "Mansion Tax" on properties sold for more that $1 million. This tax takes the form of an additional payment equal to 1% of the home's sales price. The Mayor may increase the tax, and the plan would optimally bring in $200 million a year, with some percentage proposed to support affordable housing.
In Boston, city councilors have proposed levying fees on high-end real estate deals to help pay for more housing. The proposal would set a tax of up to 6 percent on many commercial and residential sales over $2 million and establish a "flipping" tax of up to 25 percent on some properties that are sold twice within two years. The fees could raise from $175 million to $350 million a year. Legislation has been introduced at the Massachusetts state level that would enable other Boston and other municipalities to implement luxury transfer taxes.
Affordable housing coalitions in other major cities are exploring implementing high-end real estate transfer taxes to off-set the huge disruption that wealthy investors have caused in local housing markets. Many favor using the revenue to fund the creation and preservation of permanently affordable housing and homeownership.
Several states have graduated real estate transfer tax rates and many more are exploring this as a means to capture the impact of wealthy investors on housing. Hawaii has a 2 percent real estate tax on sales between $600,000 and $1 million, and a 3 percent tax on transfers valued over $1 million. New Jersey has a number of graduated rates with 1.21 percent on properties over $1 million.
LUXURY TAXES
A luxury tax is a duty levied on luxury goods, such as high-end automobiles and expensive yachts. In Connecticut, the sales tax rate jumps from 6.35 percent to 7.75 percent on vehicles costing more than $50,000; jewelry costing more than $5,000; and apparel and footwear costing more than $1,000. The clothing tax also applies to handbags, luggage, umbrellas, wallets, or watches costing more than $1,000. In New Jersey, a tax penalizes both luxury cars and gas guzzlers by imposing a 0.4 percent surcharge on vehicles that have price tags above $45,000 or get less than 19 miles per gallon.
STATE PAYROLL TAX ON HIGH INCOMES
Federal payroll taxes for Social Security have a huge loophole for the wealthy in the form of a cap on the amount of income subject to the tax. It's currently $128,400 and is adjusted annually for inflation. This means a multi-millionaire and someone earning $128,400 per year pay the same amount in Social Security payroll taxes -- not the same rate, the same amount. States can close this loophole by imposing a state level payroll tax on income above the federal cap. (See Maine proposal, detailed above.)
STATE CORPORATE INCOME TAX
With the federal corporate tax rate dropping from 35% to 21%, this is an opportune moment for states to recoup some of these funds by raising or introducing corporate income taxes. Forty-four states levy a corporate income tax, with rates ranging from 3% to 12%. Nevada, Ohio, Texas, and Washington impose gross receipts taxes instead of corporate income taxes, while South Dakota and Wyoming have neither.
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Chuck Collins is a senior scholar at the Institute for Policy Studies where he co-edits Inequality.org. His near future novel "Altar to An Erupting Sun” explores one community’s response to climate disruption. He is author of numerous books and reports on inequality and the racial wealth divide, including “The Wealth Hoarders: How Billionaires Spend Millions to Hide Trillions,” “Born on Third Base,” and, with Bill Gates Sr., of “Wealth and Our Commonwealth: Why American Should Tax Accumulated Fortunes.” See more of his writing at www.chuckcollinswrites.com
States have an opportunity to act to close the loopholes that hide and protect the wealth of the top 1%, remedy the impact of the new federal tax law that lowers taxes on the wealthy, and make critical investments in infrastructure, energy systems, and programs that create broader opportunity and shared prosperity. Concentrations of wealth are distorting our economy and undermining our democracy and civic health. State Administrations and State Legislatures can act to close the loopholes, put a brake on economic inequality and concentrations of wealth, and generate significant revenue.
Here is a menu of some of the most promising options.
TAXES ON HIGH-INCOME EARNERS
The strong majority of Americans support progressive taxes on the rich. A joint Stanford-Treasury Department report showed that high taxes do not drive millionaires to move across state lines. State legislatures have increased taxes on the wealthy. In 2018, the New Jersey legislature increased taxes on incomes over $5 million. New York State and New York City have both increased taxes on high-income households as has Washington, D.C.
In 2016, tax increases on high-income earners passed in both states where they were on the ballot, California and Maine. In California, voters extended the nation's highest top tax rate (13.3 percent) on those making more than $1 million per year, delivering an estimated $4 billion to $9 billion in annual revenue for human needs. Maine voters passed a 3 percent surtax on income over $200,000.
In 2018, Maine activists organized the first ballot initiative to fund universal home care through a payroll tax increase of 1.9% on salaries and wages over $127,000 a year. In the face of a heavily funded opposition campaign, the initiative failed to get majority support. But Caring Across Generations and other groups are working to apply lessons from this effort to similar campaigns in other states.
STATE ESTATE TAXATION
The estate tax is a levy on large fortunes when they are transferred from one generation to the next, with exemption thresholds that shield middle and working-class families. Before the Bush tax cuts passed in 2001, every state in the nation collected revenue from the state estate tax credit, which sent the first 16 percent of federal estate tax revenue to the states. Congress phased out this tax credit gradually until fully repealing it in 2005. Re-instating a progressive state estate tax in states that lost their state estate tax could generate significant revenue while reducing the concentration of wealth in intergenerational wealth dynasties.
In 2006, Washington state voters supported their state estate tax by a nearly 2-to-1 margin with the revenue raised directly funding education in the state (an education opportunity trust fund). A state estate tax has the power to fund critically important public initiatives like debt-free higher education and universal long-term care while halting the rising wealth at the very top.
The California College for All coalition is pushing legislation (and possibly a 2020 initiative) to levy a progressive tax on California estates and fund free public higher education, restoring the state's leadership role on accessible college. The estate tax would generate an estimated $4 billion a year and provide aid to 2.6 million California residents.
TAX ON CORPORATIONS WITH EXTREME GAPS BETWEEN CEO AND WORKER PAY
In 2016, the city of Portland, Oregon, adopted the world's first tax penalty on corporations with extreme gaps between their CEO and worker pay. The city's current business license tax is 2.2 percent of adjusted net income. The surtax will be 10 percent of the business tax liability for companies with a CEO-worker pay ratio of more than 100-to-1 and 25 percent for companies with a ratio of more than 250-to-1. More than 500 corporations that do business in the city, including mega-firms like Wells Fargo and Walmart, are subject to the surtax.
Such tax penalties are easy to administer because U.S. publicly held corporations began reporting the ratio between their CEO and median worker pay to the SEC in 2018.
Lawmakers in seven U.S. states and in the U.S. Congress have introduced legislation similar to the Portland tax: California, Connecticut, Illinois, Massachusetts, Minnesota, Rhode Island, and Washington. These efforts build on the living wage movement by creating an incentive to pull down the top end of the pay scale while sending a message that everyone in a workplace contributes value (not just the CEO).
CARRIED INTEREST TAX
States with significant financial sectors can take action to make up for Washington's failure to close the "carried interest" loophole, which allows private equity and hedge fund managers to reduce their tax bills by claiming a large share of their earnings as "capital gains" instead of ordinary income. This has allowed many of the wealthiest Americans to pay lower rates than firefighters and teachers. Legislation to close the carried interest loophole has been introduced in New York, New Jersey, Massachusetts, Connecticut, Rhode Island, Maryland, the District of Columbia, and Illinois. New York Governor Andrew Cuomo has included a state-level "carried interest fairness fee" in his budget proposal two years in a row.
FINANCIAL TRANSACTION TAX
A financial transaction tax is a tiny fee - at rates of a fraction of a percent - on trades of financial instruments, such as stocks, bonds, and derivatives. Such taxes are promoted as having the dual benefits of discouraging short-term speculation while generating significant revenue. The notion of instituting a Financial Transaction Tax has gained increased attention at the federal level in recent years, but Congress has failed to take action.
This would not be relevant in states that do not have a large trading exchange. The Illinois state legislature is considering a bill that would place fees of $1-$2 per contract on Chicago's commodities and financial exchanges, with revenue estimated at $10 billion to $12 billion per year.
STATE CAPITAL GAINS TAX
A capital gains tax is a levy on income from investments rather than wages. In the 42 states (including DC) that impose capital gains taxes, rates range from 3.1 percent in Pennsylvania to 13.3 percent in California. States without a capital gains tax should implement one and states that have one should increase the rate to at least 10 percent. Raising or introducing such taxes would mostly impact the wealthy, since the top 1 percent owns half of the nation's financial wealth and the bottom 50 percent only own 0.5 percent of financial wealth. State capital gains taxes help ensure fairness between those who work paycheck to paycheck and those who pocket dividends.
HIGH-END REAL ESTATE TAXES TO FUND AFFORDABLE HOUSING AND OTHER PRIORITIES
Cities and States should consider taxes on luxury real estate investments, particularly unoccupied, vacant properties. A huge number of new luxury high-rise properties have been purchased, with many vacant and unoccupied, and many purchased by shell corporations, creating a method for the ultra-wealthy to hide their wealth. The impact has been to disrupt local real estate markets and push up existing housing prices for rent or sale higher and higher. States can pass enabling legislation to allow cities and localities to address this problem through taxes on vacant, unoccupied luxury units, and can consider transfer taxes, and laws to require beneficial ownership transparency in real estate transactions. States could also institute graduated real estate transfer taxes, taxing properties transferring over $1 million at progressively higher rates.
In 2016, San Francisco voters approved a tax on high-end real estate transactions that contribute to gentrification. The tax raises additional revenue from commercial and residential real estate transfers over $5 million. Funds have been used to provide free tuition and stipends to San Francisco residents at the city's community college.
New York City has implemented a new "Mansion Tax" on properties sold for more that $1 million. This tax takes the form of an additional payment equal to 1% of the home's sales price. The Mayor may increase the tax, and the plan would optimally bring in $200 million a year, with some percentage proposed to support affordable housing.
In Boston, city councilors have proposed levying fees on high-end real estate deals to help pay for more housing. The proposal would set a tax of up to 6 percent on many commercial and residential sales over $2 million and establish a "flipping" tax of up to 25 percent on some properties that are sold twice within two years. The fees could raise from $175 million to $350 million a year. Legislation has been introduced at the Massachusetts state level that would enable other Boston and other municipalities to implement luxury transfer taxes.
Affordable housing coalitions in other major cities are exploring implementing high-end real estate transfer taxes to off-set the huge disruption that wealthy investors have caused in local housing markets. Many favor using the revenue to fund the creation and preservation of permanently affordable housing and homeownership.
Several states have graduated real estate transfer tax rates and many more are exploring this as a means to capture the impact of wealthy investors on housing. Hawaii has a 2 percent real estate tax on sales between $600,000 and $1 million, and a 3 percent tax on transfers valued over $1 million. New Jersey has a number of graduated rates with 1.21 percent on properties over $1 million.
LUXURY TAXES
A luxury tax is a duty levied on luxury goods, such as high-end automobiles and expensive yachts. In Connecticut, the sales tax rate jumps from 6.35 percent to 7.75 percent on vehicles costing more than $50,000; jewelry costing more than $5,000; and apparel and footwear costing more than $1,000. The clothing tax also applies to handbags, luggage, umbrellas, wallets, or watches costing more than $1,000. In New Jersey, a tax penalizes both luxury cars and gas guzzlers by imposing a 0.4 percent surcharge on vehicles that have price tags above $45,000 or get less than 19 miles per gallon.
STATE PAYROLL TAX ON HIGH INCOMES
Federal payroll taxes for Social Security have a huge loophole for the wealthy in the form of a cap on the amount of income subject to the tax. It's currently $128,400 and is adjusted annually for inflation. This means a multi-millionaire and someone earning $128,400 per year pay the same amount in Social Security payroll taxes -- not the same rate, the same amount. States can close this loophole by imposing a state level payroll tax on income above the federal cap. (See Maine proposal, detailed above.)
STATE CORPORATE INCOME TAX
With the federal corporate tax rate dropping from 35% to 21%, this is an opportune moment for states to recoup some of these funds by raising or introducing corporate income taxes. Forty-four states levy a corporate income tax, with rates ranging from 3% to 12%. Nevada, Ohio, Texas, and Washington impose gross receipts taxes instead of corporate income taxes, while South Dakota and Wyoming have neither.
Chuck Collins is a senior scholar at the Institute for Policy Studies where he co-edits Inequality.org. His near future novel "Altar to An Erupting Sun” explores one community’s response to climate disruption. He is author of numerous books and reports on inequality and the racial wealth divide, including “The Wealth Hoarders: How Billionaires Spend Millions to Hide Trillions,” “Born on Third Base,” and, with Bill Gates Sr., of “Wealth and Our Commonwealth: Why American Should Tax Accumulated Fortunes.” See more of his writing at www.chuckcollinswrites.com
States have an opportunity to act to close the loopholes that hide and protect the wealth of the top 1%, remedy the impact of the new federal tax law that lowers taxes on the wealthy, and make critical investments in infrastructure, energy systems, and programs that create broader opportunity and shared prosperity. Concentrations of wealth are distorting our economy and undermining our democracy and civic health. State Administrations and State Legislatures can act to close the loopholes, put a brake on economic inequality and concentrations of wealth, and generate significant revenue.
Here is a menu of some of the most promising options.
TAXES ON HIGH-INCOME EARNERS
The strong majority of Americans support progressive taxes on the rich. A joint Stanford-Treasury Department report showed that high taxes do not drive millionaires to move across state lines. State legislatures have increased taxes on the wealthy. In 2018, the New Jersey legislature increased taxes on incomes over $5 million. New York State and New York City have both increased taxes on high-income households as has Washington, D.C.
In 2016, tax increases on high-income earners passed in both states where they were on the ballot, California and Maine. In California, voters extended the nation's highest top tax rate (13.3 percent) on those making more than $1 million per year, delivering an estimated $4 billion to $9 billion in annual revenue for human needs. Maine voters passed a 3 percent surtax on income over $200,000.
In 2018, Maine activists organized the first ballot initiative to fund universal home care through a payroll tax increase of 1.9% on salaries and wages over $127,000 a year. In the face of a heavily funded opposition campaign, the initiative failed to get majority support. But Caring Across Generations and other groups are working to apply lessons from this effort to similar campaigns in other states.
STATE ESTATE TAXATION
The estate tax is a levy on large fortunes when they are transferred from one generation to the next, with exemption thresholds that shield middle and working-class families. Before the Bush tax cuts passed in 2001, every state in the nation collected revenue from the state estate tax credit, which sent the first 16 percent of federal estate tax revenue to the states. Congress phased out this tax credit gradually until fully repealing it in 2005. Re-instating a progressive state estate tax in states that lost their state estate tax could generate significant revenue while reducing the concentration of wealth in intergenerational wealth dynasties.
In 2006, Washington state voters supported their state estate tax by a nearly 2-to-1 margin with the revenue raised directly funding education in the state (an education opportunity trust fund). A state estate tax has the power to fund critically important public initiatives like debt-free higher education and universal long-term care while halting the rising wealth at the very top.
The California College for All coalition is pushing legislation (and possibly a 2020 initiative) to levy a progressive tax on California estates and fund free public higher education, restoring the state's leadership role on accessible college. The estate tax would generate an estimated $4 billion a year and provide aid to 2.6 million California residents.
TAX ON CORPORATIONS WITH EXTREME GAPS BETWEEN CEO AND WORKER PAY
In 2016, the city of Portland, Oregon, adopted the world's first tax penalty on corporations with extreme gaps between their CEO and worker pay. The city's current business license tax is 2.2 percent of adjusted net income. The surtax will be 10 percent of the business tax liability for companies with a CEO-worker pay ratio of more than 100-to-1 and 25 percent for companies with a ratio of more than 250-to-1. More than 500 corporations that do business in the city, including mega-firms like Wells Fargo and Walmart, are subject to the surtax.
Such tax penalties are easy to administer because U.S. publicly held corporations began reporting the ratio between their CEO and median worker pay to the SEC in 2018.
Lawmakers in seven U.S. states and in the U.S. Congress have introduced legislation similar to the Portland tax: California, Connecticut, Illinois, Massachusetts, Minnesota, Rhode Island, and Washington. These efforts build on the living wage movement by creating an incentive to pull down the top end of the pay scale while sending a message that everyone in a workplace contributes value (not just the CEO).
CARRIED INTEREST TAX
States with significant financial sectors can take action to make up for Washington's failure to close the "carried interest" loophole, which allows private equity and hedge fund managers to reduce their tax bills by claiming a large share of their earnings as "capital gains" instead of ordinary income. This has allowed many of the wealthiest Americans to pay lower rates than firefighters and teachers. Legislation to close the carried interest loophole has been introduced in New York, New Jersey, Massachusetts, Connecticut, Rhode Island, Maryland, the District of Columbia, and Illinois. New York Governor Andrew Cuomo has included a state-level "carried interest fairness fee" in his budget proposal two years in a row.
FINANCIAL TRANSACTION TAX
A financial transaction tax is a tiny fee - at rates of a fraction of a percent - on trades of financial instruments, such as stocks, bonds, and derivatives. Such taxes are promoted as having the dual benefits of discouraging short-term speculation while generating significant revenue. The notion of instituting a Financial Transaction Tax has gained increased attention at the federal level in recent years, but Congress has failed to take action.
This would not be relevant in states that do not have a large trading exchange. The Illinois state legislature is considering a bill that would place fees of $1-$2 per contract on Chicago's commodities and financial exchanges, with revenue estimated at $10 billion to $12 billion per year.
STATE CAPITAL GAINS TAX
A capital gains tax is a levy on income from investments rather than wages. In the 42 states (including DC) that impose capital gains taxes, rates range from 3.1 percent in Pennsylvania to 13.3 percent in California. States without a capital gains tax should implement one and states that have one should increase the rate to at least 10 percent. Raising or introducing such taxes would mostly impact the wealthy, since the top 1 percent owns half of the nation's financial wealth and the bottom 50 percent only own 0.5 percent of financial wealth. State capital gains taxes help ensure fairness between those who work paycheck to paycheck and those who pocket dividends.
HIGH-END REAL ESTATE TAXES TO FUND AFFORDABLE HOUSING AND OTHER PRIORITIES
Cities and States should consider taxes on luxury real estate investments, particularly unoccupied, vacant properties. A huge number of new luxury high-rise properties have been purchased, with many vacant and unoccupied, and many purchased by shell corporations, creating a method for the ultra-wealthy to hide their wealth. The impact has been to disrupt local real estate markets and push up existing housing prices for rent or sale higher and higher. States can pass enabling legislation to allow cities and localities to address this problem through taxes on vacant, unoccupied luxury units, and can consider transfer taxes, and laws to require beneficial ownership transparency in real estate transactions. States could also institute graduated real estate transfer taxes, taxing properties transferring over $1 million at progressively higher rates.
In 2016, San Francisco voters approved a tax on high-end real estate transactions that contribute to gentrification. The tax raises additional revenue from commercial and residential real estate transfers over $5 million. Funds have been used to provide free tuition and stipends to San Francisco residents at the city's community college.
New York City has implemented a new "Mansion Tax" on properties sold for more that $1 million. This tax takes the form of an additional payment equal to 1% of the home's sales price. The Mayor may increase the tax, and the plan would optimally bring in $200 million a year, with some percentage proposed to support affordable housing.
In Boston, city councilors have proposed levying fees on high-end real estate deals to help pay for more housing. The proposal would set a tax of up to 6 percent on many commercial and residential sales over $2 million and establish a "flipping" tax of up to 25 percent on some properties that are sold twice within two years. The fees could raise from $175 million to $350 million a year. Legislation has been introduced at the Massachusetts state level that would enable other Boston and other municipalities to implement luxury transfer taxes.
Affordable housing coalitions in other major cities are exploring implementing high-end real estate transfer taxes to off-set the huge disruption that wealthy investors have caused in local housing markets. Many favor using the revenue to fund the creation and preservation of permanently affordable housing and homeownership.
Several states have graduated real estate transfer tax rates and many more are exploring this as a means to capture the impact of wealthy investors on housing. Hawaii has a 2 percent real estate tax on sales between $600,000 and $1 million, and a 3 percent tax on transfers valued over $1 million. New Jersey has a number of graduated rates with 1.21 percent on properties over $1 million.
LUXURY TAXES
A luxury tax is a duty levied on luxury goods, such as high-end automobiles and expensive yachts. In Connecticut, the sales tax rate jumps from 6.35 percent to 7.75 percent on vehicles costing more than $50,000; jewelry costing more than $5,000; and apparel and footwear costing more than $1,000. The clothing tax also applies to handbags, luggage, umbrellas, wallets, or watches costing more than $1,000. In New Jersey, a tax penalizes both luxury cars and gas guzzlers by imposing a 0.4 percent surcharge on vehicles that have price tags above $45,000 or get less than 19 miles per gallon.
STATE PAYROLL TAX ON HIGH INCOMES
Federal payroll taxes for Social Security have a huge loophole for the wealthy in the form of a cap on the amount of income subject to the tax. It's currently $128,400 and is adjusted annually for inflation. This means a multi-millionaire and someone earning $128,400 per year pay the same amount in Social Security payroll taxes -- not the same rate, the same amount. States can close this loophole by imposing a state level payroll tax on income above the federal cap. (See Maine proposal, detailed above.)
STATE CORPORATE INCOME TAX
With the federal corporate tax rate dropping from 35% to 21%, this is an opportune moment for states to recoup some of these funds by raising or introducing corporate income taxes. Forty-four states levy a corporate income tax, with rates ranging from 3% to 12%. Nevada, Ohio, Texas, and Washington impose gross receipts taxes instead of corporate income taxes, while South Dakota and Wyoming have neither.
"Zeldin's assertion that the EPA shouldn't address greenhouse gas emissions is like a fire chief claiming that they shouldn't fight fires," said one critic. "It is as malicious as it is absurd."
U.S. President Donald Trump's administration faced an onslaught of criticism on Tuesday for starting the process of repealing the 2009 legal opinion that greenhouse gases endanger public health and the welfare of the American people—which has enabled federal regulations aimed at the fossil fuel-driven climate emergency over the past 15 years.
Confirming reports from last week, Environmental Protection Agency (EPA) Administrator Lee Zeldin unveiled the rule to rescind the 2009 "endangerment finding" at a truck dealership in Indiana. According to The New York Times, he said that "the proposal would, if finalized, amount to the largest deregulatory action in the history of the United States."
If the administration succeeds in repealing the legal finding, the EPA would lack authority under the Clean Air Act to impose standards for greenhouse gas emissions—meaning the move would kill vehicle regulations. As with the reporting last week, the formal announcement was sharply condemned by climate and health advocates and experts.
"Greenhouse gas emissions endanger public health and are the root cause of the climate crisis," said Deanna Noël with Public Citizen's Climate Program, ripping the administration's effort as "grossly misguided and exceptionally dangerous."
"This isn't just a denial of science and reality—it's a betrayal of public trust and yet another signal that this administration is working for corporate interests, and no one else."
"Stripping the EPA of its ability to regulate greenhouse gases is like throwing away the fire extinguisher while the house is already burning," she warned. "The administration is shamelessly handing Big Oil a hall pass to pollute unchecked and dodge accountability, leaving working families to bear the costs through worsening health outcomes, rising energy bills, more climate-fueled extreme weather, and an increasingly unstable future. This isn't just a denial of science and reality—it's a betrayal of public trust and yet another signal that this administration is working for corporate interests, and no one else."
Noël was far from alone in accusing the administration's leaders of serving the polluters who helped Trump return to power.
"Zeldin and Trump are concerned only with maximizing short-term profits for polluting corporations and the CEOs funneling millions of dollars to their campaign coffers," said Jim Walsh, policy director at Food & Water Watch. "Zeldin's assertion that the EPA shouldn't address greenhouse gas emissions is like a fire chief claiming that they shouldn't fight fires. It is as malicious as it is absurd."
Dan Becker, director of the Center for Biological Diversity's Safe Climate Transport Campaign, similarly said that the proposal is "purely a political bow to the oil industry" and "Trump is putting fealty to Big Oil over sound science and people's health."
Earthworks policy director Lauren Pagel also called the rule "a perverse gift to the fossil fuel industry that rejects yearslong efforts by the agency, scientists, NGOs, frontline communities, and industry to protect public health and our environment."
"Donald Trump and Lee Zeldin are playing with fire—and with floods and droughts and public health risks, too," she stressed, as about 168 million Americans on Tuesday faced advisories for extreme heat made more likely by the climate crisis.
🚨 The Trump administration just took its most extreme step yet in rolling back climate protections.
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— Sierra Club (@sierraclub.org) July 29, 2025 at 4:58 PM
Justin Chen, president of American Federation of Government Employees Council 238, which represents over 8,000 EPA workers nationwide, said that the repeal plan "is reckless and will have far-reaching, disastrous consequences for the USA."
"EPA career professionals have worked for decades on the development of the science and policy of greenhouse gases to protect the American public," he continued, "and this policy decision completely disregards all of their work in service to the public."
The Union of Concerned Scientists (UCS) highlighted that Chris Wright, head of the Department of Energy, joined Zeldin at the Tuesday press conference and "announced a DOE 'climate science study' alongside remarks that were rife with climate denial talking points and disinformation."
UCS president Gretchen Goldman said that "it's abundantly clear what's going on here. The Trump administration refuses to acknowledge robust climate science and is using the kitchen sink approach: making every specious argument it can to avoid complying with the law."
"But getting around the Clean Air Act won't be easy," she added. "The science establishing climate harms to human health was unequivocally clear back in 2009, and more than 15 years later, the evidence has only accumulated."
Today, Zeldin’s EPA plans to release a proposal to revoke the Endangerment Finding, which is the legal & scientific foundation of EPA’s responsibility to limit climate-heating greenhouse gas pollution from major sources.
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— Moms Clean Air Force (@momscleanairforce.org) July 29, 2025 at 12:58 PM
David Bookbinder, director of law and policy at the Environmental Integrity Project, was a lead attorney in the 2007 U.S. Supreme Court case Massachusetts vs. EPA, which affirmed the agency's authority to regulate greenhouse gases under the Clean Air Act and ultimately led to the endangerment finding two years later.
Bookbinder said Tuesday that "because this approach has already been rejected by the courts—and doubtless will be again—this baseless effort to pretend that carbon dioxide and other greenhouse gasses that cause climate change are not harmful pollutants is nothing more than a transparent attempt to delay and derail our efforts to control greenhouse pollution at the worst possible time, when deadly floods and heat waves are killing more people every day."
In a statement from the Environmental Protection Network, which is made up of ex-EPA staff, Joseph Goffman, former assistant administrator of the agency's Office of Air and Radiation, also cited the 2007 ruling.
"This decision is both legally indefensible and morally bankrupt," Goffman said of the Tuesday proposal. "The Supreme Court made clear that EPA cannot ignore science or evade its responsibilities under the Clean Air Act. By walking away from the endangerment finding, EPA has not only broken with precedent; it has broken with reality."
Aru Shiney-Ajay, executive director of the youth-led Sunrise Movement, responded to the EPA proposal with defiance, declaring that "Donald Trump and his Big Oil donors are lighting the world on fire and fueling their private jets with young people's lives. We refuse to be sacrifices for their greed. We're coming for them, and we're not backing down."
Israel has already summarily rejected the U.K. leader's ultimatum to take "substantive" steps to end the war on Gaza by September, agree to a two-state solution, and reject West Bank annexation.
United Kingdom Prime Minister Keir Starmer was accused of "political grandstanding" after he said Tuesday that his country would recognize Palestinian statehood if Israel did not take ambiguously defined steps to end its war on Gaza—conditions that were promptly dismissed by Israeli Prime Minister Benjamin Netanyahu.
"Today, as part of this process towards peace, I can confirm the U.K. will recognize the state of Palestine by the United Nations General Assembly in September, unless the Israeli government takes substantive steps to end the appalling situation in Gaza, agree to a cease-fire, and commit to a long-term sustainable peace, reviving the prospect of a two-state solution," Starmer said during a press conference.
"This includes allowing the U.N. to restart the supply of aid and making clear that there will be no annexations in the West Bank," the prime minister continued, adding that "the terrorists of Hamas... must immediately release all of the hostages, sign up to a cease-fire, disarm, and accept that they will play no part in the government of Gaza."
Member of Scottish Parliament Scott Greer (Scottish Greens-West Scotland) responded to Tuesday's announcement on social media, saying, "Starmer wouldn't threaten to withdraw U.K. recognition of Israel, but he's made recognition of Palestinian statehood conditional on the actions of their genocidal oppressor?"
"Another profoundly unjust act from a Labour government thoroughly complicit in Israel's crimes," Greer added.
British attorney and activist Shola Mos-Shogbamimu asserted that "Keir Starmer knows his time is up and pivots to save his career but it's too late."
"By placing a condition on recognizing Palestine this declaration is performative and disingenuous because before September he can claim Israel has substantively complied with the condition," she added.
Leftist politician and Accountability Archive co-founder Philip Proudfoot argued on social media that "decent" Members of Parliament "need to table a no-confidence motion in Starmer now."
"He has just used the recognition of Palestine as a bargaining chip in exchange for Israel following its BASIC LEGAL OBLIGATIONS," he added. "This is one of the lowest political acts in living memory."
Media critic Sana Saeed said on social media, "Using Palestinian life and future as a bargaining chip and threat to Israel—not a surprise from kid starver Keir Starmer."
Journalist Sangita Myska argued that "rather than threatening the gesture politics of recognizing a Palestinian state (that may never happen)," Starmer should expel Israel's ambassador to the U.K., impose "full trade sanctions" and a "full arms embargo," and end alleged Royal Air Force surveillance flights over Gaza.
Political analyst Bushra Shaikh accused Starmer of "political grandstanding" and "speaking from both sides of his mouth."
Starmer's announcement followed a Monday meeting in Turnberry, Scotland with U.S. President Donald Trump, who signaled that he would not object to U.K. recognition of Palestine.
However, U.S. State Department spokesperson Tammy Bruce called Starmer's announcement "a slap in the face for the victims of October 7," a reference to the Hamas-led attack of 2023.
While the United States remains Israel's staunchest supporter and enabler—providing billions of dollars in annual armed aid and diplomatic cover—Trump, Vice President JD Vance, and U.S. Ambassador to Israel Mike Huckabee have all expressed concerns over mounting starvation deaths in Gaza.
On Tuesday, the U.N.-affiliated Integrated Food Security Phase Classification warned that a "worst-case" famine scenario is developing in Gaza, where health officials say at least 147 Palestinians, including at least 88 children, have died from malnutrition since Israel launched its obliteration and siege of the enclave following the October 2023 attack.
Israel—which imposed a "complete siege" on Gaza following that attack—has severely limited the amount of humanitarian aid that can enter the strip. According to U.N. officials, Israel Defense Forces troops have killed more than 1,000 aid-seeking civilians at distribution points run by the U.S.-backed Gaza Humanitarian Foundation. IDF troops have said they were ordered to shoot live bullets and artillery shells at aid seekers.
Netanyahu—who is wanted by the International Criminal Court for alleged crimes against humanity and war crimes in Gaza including murder and weaponized starvation—responded to the U.K. prime minister's ultimatum in a social media post stating, "Starmer rewards Hamas' monstrous terrorism and punishes its victims."
"A jihadist state on Israel's border TODAY will threaten Britain TOMORROW," Netanyahu said. "Appeasement towards jihadist terrorists always fails. It will fail you too. It will not happen."
The U.K. played a critical role in the foundation of the modern state of Israel, allowing Jewish colonization of what was then the British Mandate of Palestine under condition that "nothing shall be done which may prejudice the civil and religious rights of existing non-Jewish communities in Palestine," who made up more than 90% of the population.
Seeing that Jewish immigrants returning to their ancestral homeland were usurping the indigenous Arabs of Palestine, the British subsequently prohibited further Zionist colonization. This sparked a nearly decadelong wave of terrorism and other attacks against the British occupiers that ultimately resulted in the U.K. abandoning Palestine and the establishment of Israel under the authority of the United Nations—an outcome achieved by the ethnic cleansing of more than 750,000 Palestinian Arabs.
On the topic of annexing the West Bank, earlier this month, all 15 Israeli government ministers representing Netanyahu's Likud party recommended the move, citing support from Trump. The International Court of Justice (ICJ) found last year that Israel's occupation of Palestine, including the West Bank and Gaza, is an illegal form of apartheid.
Last week, French President Emmanuel Macron said his country would announce its formal recognition of Palestinian statehood during September's U.N. General Assembly in New York. France is set to become the first Group of Seven nation to recognize Palestine, which is currently officially acknowledged by approximately 150 of the 193 U.N. member states.
Israeli Foreign Minister Israel Katz subsequently threatened "severe consequences" for nations that recognize Palestine.
Starmer's announcement came on the same day that the Gaza Health Ministry said that the death toll from Israel's 662-day assault and siege on Gaza—which is the subject of a South Africa-led genocide case at the ICJ—topped 60,000. However, multiple peer-reviewed studies in the prestigious British medical journal The Lancet have concluded that Gaza officials' casualty tallies are likely significant undercounts.
"Eric Adams is a complete non-factor in this race," remarked a founding partner of pollster Zenith Research.
A new poll of the New York City mayoral race found that Democratic nominee Zohran Mamdani is very well positioned to win later this year and that former New York Gov. Andrew Cuomo is only competitive in the race if every other Mamdani opponent drops out.
The survey, which was conducted by polling firm Zenith Research, showed Mamdani holding what Zenith founding partner Adam Carlson described on X as a "commanding" lead of 28 points among likely voters in a five-way race featuring Cuomo, incumbent Mayor Eric Adams, Republican Curtis Sliwa, and independent candidate Jim Walden. Even in other scenarios where other candidates drop out of the race, Mamdani would still garner more than 50% of likely votes in each instance.
However, Mamdani's lead becomes much smaller when the poll is expanded to all registered voters, among whom he only holds a three-point advantage over Cuomo in a head-to-head matchup. This suggests that Cuomo has room to grow as long as he can convince Adams, Sliwa, and Walden to exit the race.
Even so, commented Carlson, Cuomo faces significant headwinds that could block his path to victory even if he succeeds somehow in making it a one-on-one race.
"Another thing that’s extremely tough for Cuomo is that 60% of likely voters (as well as 52% of registered voters) would not even consider voting for him," he explained. "Only 32% say they wouldn't consider voting for Mamdani. Cuomo will need to go scorched earth to bring that number up."
New Yorkers who oppose Mamdani will have to place their hopes in the disgraced former governor, given the dismal standing held by incumbent Adams.
"Eric Adams is a complete non-factor in this race," remarked Carlson. "He polls at 7% in the five-way race, 14% if Cuomo drops out, and 32% if Cuomo and Sliwa drop out. More than half of [likely voters] strongly disapprove of his performance and have a very unfavorable view of him. 68% won't consider voting for him."
The poll also found Mamdani with an overall lead among Jewish voters despite efforts by opponents to paint him as antisemitic given his opposition to Israel's war in Gaza and his past reluctance to criticize the slogan "globalize the intifada," which he told The Bulwark he viewed as "a desperate desire for equality and equal rights in standing up for Palestinian human rights." New York City Comptroller Brad Lander, a progressive Jewish ally of Mamdani's who has endorsed his mayoral bid, acknowledged before the election that some Jewish people view the phrase as a threat of violence.
Among likely Jewish voters, Mamdani leads Cuomo by 17 points in a five-way race. Although Cuomo holds a double-digit lead over Mamdani among likely Jewish voters over the age of 45, Mamdani dominates among young Jewish voters by pulling in more than two-thirds of likely Jewish voters between the ages of 18 and 44.