New York State, along with six others, recently introduced wealth taxes, a tax on the wealthiest residents. The six other states, California, Connecticut, Hawaii, Illinois, Maryland, and Washington, along with New York, collectively have the top 60% of the nation's wealthiest people, according to the Tax Foundation, an independent tax policy group.
In New York State, there is a bill to tax to wealthiest New York City residents' capital gains by 30 percent, a 50 percent bump above the 20 percent federal tax on long-term gains.
For several years a national wealth tax has been discussed but has failed to gain any movement in Congress.
According to the Tax Foundation's report, the wealth taxes will cause people to move to other, lower-taxed states. However, some states have a plan to create revenue still even as the wealthiest people pack up. California, for example, has floated the idea of an "exit tax," which would continue taxing people after they switch residents.
"The constant across all seven states, or wherever such taxes are proposed: wealth taxes are economically destructive, their base is almost impossible to measure accurately, and they create perverse incentives and promote costly avoidance strategies," the report stated.
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