The New York Times reports:
So far in 2024, lawmakers in 10 states have introduced wealth-tax bills or are working on introducing them, according to Amber Wallin, senior policy and outreach director at the State Revenue Alliance. They are California, Connecticut, Hawaii, Maryland, Minnesota, Nevada, New York, Pennsylvania, Vermont and Washington.
No states currently assess any taxes on a living individual's net worth or unrealized capital gains. If Vermont's bill were to become law, it would basically do that, Ms. Kornheiser explained: Someone whose assets, after exemptions, started the year worth $10 million and finished the year worth $11 million, for example, would have $1 million in unrealized gains that would be counted as income, and therefore subject to Vermont's top income tax rate of 8.75 percent, even though nothing was sold and the gains were all on paper.
The Times notes it's an open question whether taxing "unrealized gains" is legal. Beyond the legal issues, there are practical ones. Any state considering such a move as a revenue-raiser may want to consider the possibility that it will actually be a revenue-loser as it accelerates the flow of talent and capital to states with approaches to taxation that are less complex, less punitive, and more reasonable.
