It's not just California and New York. All across the nation, blue states are committing political and economic suicide by targeting millionaires with high taxes. Who will suffer most from this misguided, ideologically driven push to punish the wealthy? Wage workers and the poor.
Leftist Democratic pols calling for states to tax the rich are ignoring the fact that the rich can exit their state, taking jobs, tax revenue and the right to congressional representation with them. The states that fall for the tax-the-rich mania will be left in the dust, with failing economies and shrinking political clout in Congress.
In Seattle this week, a slim Democratic majority in the legislature is slated to pass a 9.9 percent income tax on millionaires. Washington state has never had an income tax -- its constitution actually prohibits it -- but Democratic Gov. Bob Ferguson is vowing to sign the measure into law.
Washington state already ranks a dismal 45th out of the 50 states in tax friendliness because of a heavy burden of sales, capital gains, property and excise taxes. This millionaire tax will drive out business. Already, Starbucks is moving a significant share of its corporate management to Nashville, Tennessee; the state ranks eighth in tax friendliness and has no income tax.
The Washington Education Association, a teachers union, is pushing "tax the ultra-rich" as its top legislative priority, economic consequences be damned.
That same anti-rich mania is driving Illinois Democrats to push for a three percent surcharge levied against $1 million earners. Illinois already has one of the heaviest tax burdens in the nation and is losing population, just like California and New York.
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Advocating for the millionaire tax, the Illinois Federation of Teachers presented a letter to Illinois Gov. JB Pritzker touting the success Massachusetts has had with its millionaire tax, saying "Massachusetts' four percent surtax on millionaires generated nearly $6 billion for public services since its passage -- Illinois can do the same."
And produce the same disastrous results. Massachusetts is actually struggling with a huge population exodus as residents relocate to other states. Pioneer Institute economists call it the "hollowing out of Massachusetts' workforce and economy." Even veritable institutions in the state, such as Cape Cod Potato Chips, pulled out.
From April 2020 to July 2025, 182,000 residents fled to other states, causing a demographic decline and a serious brain drain. The evacuees skewed younger, particularly adults between 26 and 34, stripping the state's future workforce and tax base.
Alarmed by the flood of companies and people leaving the state, fiscal reformers proposed a ballot initiative to lower the state's income tax on nonmillionaires from five percent to four percent. But lefty Gov. Maura Healey said that "cutting income taxes doesn't make Massachusetts more affordable."
Really? It would save the average state taxpayer about $1,300 annually.
Sadly, as with so many other lefties, her idea of affordability is more government handouts. But the best affordability plan is a good job and a growing paycheck.
These leftwing ideologues are hurting the least mobile people in their state, people stuck in a dead economy with few options.
The nation is moving in two starkly different directions, with states such as Oklahoma, South Carolina and Kentucky phasing out their income tax to attract businesses and population. Meanwhile, Democratic states like Illinois, Washington and Massachusetts are exploding state spending and proposing tax hikes on top earners to fund an ever-growing array of programs and handouts.
But the push to tax the rich is about more than covering additional spending. It is a searing ideological revulsion at the rich. Connecticut state Rep. Jason Doucette, head of the state's Tax Equity Caucus, is pushing a bill to increase the top marginal tax rate for personal income from 6.99 percent to 7.99 percent. He claims it is to redress inequity.
And New York City Mayor Zohran Mamdani has said, "I don't think we should have billionaires."
This anti-rich dogma -- and the huge tax hikes it produces -- is the enemy of prosperity and an affordable economy.
The residents of these radical blue states would benefit if their political leaders phased out the state income tax entirely. It's an economy killer. The Council of Economic Advisers estimates that phasing out Illinois' income tax would produce a $5,500 wage hike for the average worker -- more pre-tax earnings -- and increase business startups by as much as 26%. Other states would reap similar benefits from axing their income tax.
For years, income tax-free states like Texas, Tennessee and Florida have led the pack in producing economic opportunity for their residents. Every year more Americans vote with their feet to settle in these states.
Now, the anti-wealth Marxist agenda taking over the Democratic Party is worsening the divide, turning blue-state economies into wastelands and condemning their least mobile residents to poverty. It's tragic.
Betsy McCaughey is a former Lt. Governor of New York State and Chairman & Founder of the Committee to Reduce Infection Deaths at www.hospitalinfection.org. Follow her on Twitter @Betsy_McCaughey.
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