Proposed millionaires income tax would hit Democratic states hardest
The millionaire tax being pushed by Senate Democrats this week would hit taxpayers in Democrat-dominated states almost twice as hard as those in Republican-dominated states, according to an analysis by The Daily Caller.
States that have elected two Republican senators tend to have much lower levels of economic inequality than states which have elected two Democratic senators. Democrat-dominated states tend to have higher percentages of very rich people, higher percentages of very poor people, and a lower percentage of middle-income people.
For example, the 5.6 percent tax on million-dollar earners will hit 0.7 percent of taxpayers in New York, 0.12 percent of taxpayers in Connecticut and 0.4 percent of taxpayers in Colorado, according to an Oct. 6 report by the left-of-center group Citizens for Tax Justice (CTJ).
On average, 0.29 percent of taxpayers in the 18 states that elect two Democratic senators would be forced to pay the millionaire’s surtax if it becomes law.
In contrast, only 0.17 percent of people in the 15 states that send two Republicans to the Senate would pay the surtax.
In the the 17 states that split their Senate seats, 0.173 percent of taxpayers would be billed the millionaire surtax, which would be applied to individuals or couples with an “adjusted gross income” of $1 million.
In Democrat-dominated Washington D.C., 0.9 percent of taxpayers would pay the tax. In adjacent Maryland and Virginia, 0.3 percent of people would get the surtax forms from the IRS.
Nationally, only 0.2 percent of taxpayers earn at least one million dollars per year, according to the report.
The tax bill is unlikely to become law, partly because of the GOP’s opposition to expanding government and raising taxes, but also because many Democrats are less interested in passing the tax than in using the votes as a campaign-trail talking point.
Democrats, including President Barack Obama, expect to use GOP opposition to help paint it as the heartless friend of Wall Street. Wall Street is based in New York, and many of its leading players live in New York or nearby Connecticut. Both states are dominated by Democratic politicians and both states send two Democrats to the Senate.
The GOP-led state with the highest percentage of millionaire taxpayers is Texas, where oil and high-tech business boosted the percentage of millionaires to 0.5 percent. That’s below the New York’s 0.7 percent, but much higher than the 0.3 percent scored by Democratic-dominated Maryland, Delaware, New Jersey and Washington state.
The next highest GOP states are oil-rich Oklahoma and Wyoming, where 0.3 and 0.4 of taxpayers would reach the $1 million income threshold.
In 10 Republican-led states, only 0.1 percent of taxpayers would pay the millionaire’s tax. In nine Democrat-dominated states, 0.1 percent of people would pay the tax.
The comparison is somewhat muddied by recent elections, which have made the GOP dominant in Virginia’s state house, despite the two Democratic senators who will likely vote for the bill.
Massachusetts’ state government is dominated by Democrats, but the 2010 election of Sen. Scott Brown takes it out of the Democrat-dominated column. If the tax passes, 0.6 percent of the states’ taxpayers would pay the surtax
In 27 states, only 0.1 percent of people would be hit by the taxes. In eight states, 0.2 percent of people would pay the tax, says the CTJ report.
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