California and New York are considering implementing a new wealth tax. With the new year approaching, tax rule changes and tax season in focus, A decrease in tax revenue was observed in forty states during 2023, with these states having the lowest collectionaccording to CNBC News.
According to the same medium, the decrease in Initial Public Offerings (IPOs) and share sales last year contribute to the fiscal crisis that is emerging in the states that have more advanced technology.
In that sense, California saw a 25 percent drop in tax revenue, so it now faces a deficit of $68,000,000,000., the largest in the history of the state. Frank says New York's tax revenue is expected to decline by $10,000,000,000 next year, which could result in a deficit of $4,000,000,000.
Taxes will increase to have more revenue
In this situation, Both states are considering a new wealth tax.. The proposal includes a 1 percent tax on total wealth if it is greater than US$50,000,000, while this will be 1.5 percent if a person's fortune amounts to US$1,000,000,000.
The same way, New York is considering additional taxes on people whose income is more than $1,000,000,000., specifically in relation to unrealized capital gains. These taxes would be applied at higher rates than those applied to the highest incomes of those whose income exceeds US$450,000 a year.
This measure has already generated a debate among people, as there are those who argue that Both California and New York could see a wealth drain if taxes are increased, which would continue to result in low tax collection rates in the regions.
This measure seeks to increase tax collection in the states
Recent data, cited by the same medium, indicates that California lost 27,000 tax payers, whose income was greater than US$200,000 during 2020 and 2021, while States like Florida and Texas, which have no income taxes, have seen populations increase in recent years.
The wealth tax proposal seeks to address significant budget deficits and growing fiscal strains in these states, but some warn it could lead to greater migration of high-wealth individuals to lower-tax states.
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