These new resources have been invested in educationalprograms that support early learning, childcare, and free school lunches and community college. In the case of Massachusetts, some of the revenue collected is earmarked towards public transportation.
That experience contrasts with the failure of the Great Kansas Tax Cut Experiment that began in 2012. The Sunflower State lagged behind its neighbors in a number of economic categories and experienced revenue shortfalls. The experiment was abandoned five years later.
Lastly, the brief looks at the revenue potential of a wealth tax aimed at ultra-high net worth individuals. We identified individuals with $50 million or more in wealth across four states and estimated how much different taxes could raise. These individuals have the liquidity to pay and, as my colleague and former tax attorney Bob Lord has argued, need to have their rate of accumulation curbed.
Wealth Tax Estimates on Ultra High Net Worth Individuals
| Year: 2024 | ||||
|---|---|---|---|---|
| Massachusetts | New York | Rhode Island | Washington | |
| # of individuals with $50M+ | 2,642 | 7,869 | 243 | 2,939 |
| Wealth held by individuals with $50M+ ($bn) | $500.4 | $1,488.7 | $46.6 | $557.0 |
| Revenue Estimate, $bn | ||||
| 1 percent wealth tax | $3.7 | $11.0 | $0.3 | $4.1 |
| 2 percent wealth tax | $7.4 | $21.9 | $0.7 | $8.2 |
| 3 percent wealth tax | $11.0 | $32.9 | $1.0 | $12.3 |
Source: IPS and SRA analysis of WealthX data
A two percent wealth tax on this class of ultra-high net worth individuals has the potential to raise $7.4 billion in Massachusetts, $21.9 billion in New York, $700 million in Rhode Island, and $8.2 billion in Washington. This is a significant source of potential revenue that can be invested in a green transition, permanently affordable housing, and universal healthcare.
At the time of writing, legislators in Washington State are awaiting Governor Bob Ferguson’s signature to pass new taxes to help bring down their $16 billion budget deficit. Even a one-time three percent wealth tax could bring down the deficit from $16 billion to $3.7 billion.
We have witnessed a counterrevolution over the past 50 years where the nation’s wealth and income has concentrated at an extreme level in the hands of a small but powerful minority. They use their resources to increase their access to the state, buy up more assets, and squeeze the living standards of the working-class. We have the policy tools at our disposal to reverse this trend. Let’s put progressive taxation to work.