Encroaching on the Federal tax base

New York Prepares To Pass Its Own “Wealth Tax”

It is no coincidence. It is the 2010 tax battle repeat, the tax regimes compete for tax base. Liz warren will hurry up the race as once a large states passes the tax, enthusiasm in the state for federal tax increases drops dramatically. Polls matter.

Right on cue:

Biden’s Planned Tax Hike to Hit People Earning Over $400,000 Hardest

The U.S. president’s proposal will primarily affect top earners, while states are also considering increasing taxes.

California needs that tax bracket to keep up, as does New York. Nothing will be decided until election time which will come faster than they think.  Once the federal tax becomes a serious discussion, California and New York delegations will need to consider their respective state claims on that tax base.

California will accept encroachment only if public pensions become a federal entitlement, so the Swamp can kiss their infrastructure week off the agenda right now. Nor  are California politicians going to revive the bullet train fiasco, that is already off the agenda. Texas, on the other hand will absolutely stop any taxes on their oil sales.  Florida will want many wealth taxes, somewhere else, since they are the tax evasion state. If we tax corporations then capital controls are out the window. Illinios is already out of tax base and want all the federal earmarks they can get.

There may be no solution. Doubtful before the elections as Cal and NY  will want first crack. Once the federal proposals become louder, states can claim the better alternative.