- Vermont lawmakers are debating a 3% tax on people who make more than $500,000.
- Six other states have a similar "millionaires tax." Washington, DC does too.
Vermont could soon join a growing list of states adopting laws that tax the rich.
There are now six states that have some kind of "millionaires tax": Maine, Massachusetts, California, Connecticut, New York, and New Jersey. Washington, DC also has a similar kind of tax.
In Massachusetts — the most recent state to adopt one — taxing the rich added $1 billion to the state budget in 2023 and helped provide the state's public school students with free school lunches (and breakfasts, too).
Massachusetts managed this by adopting a 4% tax on people who earn more than $1 million a year. About half the money earned from the tax went to education, while the other half went toward transportation, city officials said.
Vermont's lawmakers are now hoping for a similar windfall. State lawmakers introduced a law that, if passed, would place a 3% tax on people with adjusted gross income of more than $500,000.
The tax would apply to the 2024 tax year and would be adjusted for inflation each year, according to the proposal.
Vermont state Rep. Emilie Kornheiser, who is sponsoring the bill, said in a statement that she is proud to join the "growing movement" working to close the wealth gap.
"We need to reform our tax system to get to the root causes of inequality rather than trying to fix the damages after the fact," Kornheiser said. "Asking Vermont's wealthiest few to pay their fair share means that we can strengthen our fraying infrastructure and continue to build a Vermont that works for everyone, not just the select few."
Fair Share for Vermont, an advocacy group that supports the bill, told ABC News the tax could generate nearly $100 million in annual revenue for the state's budget.
President Joe Biden has promoted federal versions of such laws. He began urging lawmakers to pass his billionaires tax proposal in February 2023. That plan would impose a minimum 25% tax on households with a net worth of more than $100 million.
Biden's proposed 2024 budget also includes other tax increases on high-income earners, many of which are not likely to pass the House of Representatives, which is controlled by Republicans.
Biden also signed the Inflation Reduction Act into law in February 2023, which included a 15% minimum tax on corporations earning more than $1 billion.