Blue states are committing tax suicide — their mania is contagious

New York Gov. Kathy Hochul, center, flanked by Massachusetts' Gov. Maura Healey, second from left, and California's Gov. Gavin Newsom, in the Synod Hall on Thursday, May 16, 2024. AP

It’s not just New York and California: All across the nation, blue states are committing political and economic suicide by targeting millionaires with high taxes.

Who will suffer most from this ideologically driven push to punish the wealthy? Wage workers and the poor.

Leftist Democratic pols demanding new state tax-the-rich measures are ignoring economic reality: Wealthy residents can and do move in response to unreasonable taxes — taking jobs, revenue and even congressional representation with them.    

In Washington state this week, a slim Democratic majority is on the verge of passing a 9.9% income tax on millionaires. 

The Evergreen State has never had an income tax — the state Constitution actually prohibits it — but Democratic Gov. Bob Ferguson is vowing to sign this one into law.  

The Tax Foundation ranks Washington state a dismal 45th out of 50 in tax friendliness due to its heavy sales, capital-gains, property and excise taxes.

This millionaires’ tax will add to that burden and drive out business.

The exodus has already started: Starbucks, a Seattle icon, is moving much of its corporate management to income-tax-free Tennessee.

But the Washington Education Association — the teachers’ union — is demanding “tax-the-ultra-rich” as its top legislative priority, economic consequences be damned.

It’s the same in Illinois, whose teachers’ union’s anti-rich mania is driving a push for a 3% surcharge on million-dollar earners.

Illinois already has one of the heaviest tax burdens in the nation and is losing population because of it.

To advocate for the millionaire’s tax, the Illinois Federation of Teachers is claiming Massachusetts has had success with a similar measure.

“Massachusetts’ 4% surtax on millionaires generated nearly $6 billion for public services since its passage,” the union insists. “Illinois can do the same.”

And produce the same disastrous results: Since passing that surtax in 2022, Massachusetts is struggling with a significant net population drop that Pioneer Institute economists call the “hollowing out of Massachusetts’ workforce and economy.”  

Even venerable institutions like Cape Cod Potato Chips, which shut down its last Bay State plant in January, have pulled out.

In the last five years at least 182,000 residents have 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 trend, fiscal reformers proposed a ballot initiative to lower Massachusetts’ income tax on non-millionaires from 5% to 4%.

Lefty Gov. Maura Healey won’t budge: “Cutting income taxes doesn’t make Massachusetts more affordable,” she insists.

Really? It would save the average state taxpayer about $1,300 annually.

No, like so many Democrats, Healey’s idea of affordability involves more government handouts.

But the best affordability plan is a good job and a growing paycheck.

These leftist ideologues are hurting the least mobile people in their state, leaving them stuck in a dead economy with few options.

The nation is moving in two starkly different directions.

States such as Oklahoma, South Carolina and Kentucky are phasing out their income taxes in an effort to attract businesses and new residents.

Meanwhile, deep-blue states like Illinois, Washington, Massachusetts, New York and California are exploding state spending and proposing tax hikes on top earners to fund an ever-growing array of social services.

Their push is about more than balancing state budgets: It’s rooted in a searing ideological revulsion at the rich.

That’s why Connecticut state Rep. Jason Doucette, head of the legislature’s Tax Equity Caucus, is pushing to increase the top state personal-income tax rate from 6.99% to 7.99%, claiming his goal is to redress inequity.

And in New York, Mayor Zohran Mamdani has told us plainly, “I don’t think we should have billionaires.”

This anti-wealth dogma is the enemy of prosperity.

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 President’s Council of Economic Advisors estimates that phasing out Illinois’ income tax, for example, would produce a $5,500 wage hike for the average worker — that is, more pre-tax earnings — and increase business start-ups by as much as 26%. 

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.   

But states that fall for the anti-wealth Marxist agenda taking over the Democratic Party will be left in the dust, with failing economies and shrinking clout in Congress — as their leaders’ vindictive policies condemn their least mobile residents to poverty.

Betsy McCaughey is a former lieutenant governor of New York.