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Massachusetts passed a 4% millionaire's tax last year. Now every public school student is going to get free lunch
(www.businessinsider.com)
this post was submitted on 14 Aug 2023
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Per the article, it's an income tax on any income over a million dollars, so it's essentially an additional state income tax bracket. So, if an entity makes exactly 1 million this year then they won't pay any extra, but if they make 2 million, then they pay 4 percent on that additional 1 mill (40k), over whatever else they would owe before the additional tax.
Like all income tax, there are ways to avoid it or reduce your burden, but not every person/company goes to those lengths.
I personally think a wealth tax is fairer for society, but it's pretty hard to implement and of course has a ton of very wealthy opposition.
The most reasonable way I've seen so far is to assume that your wealth passively creates x% of extra income for you, and then tax that amount as income. That also simplifies the tax system, since you only need enter your assets, and not what exacts trades and profits you made.
I can make it simpler yet and close the Billionaire Income Loophole, where their "income" is taking out loans against value of their investments by simply taxing those loans. No need to value something, they've already done it when they took out the loan. If you borrowed 10 Million against a portfolio of 50 Million then you should be taxed on the 10 Million. That's the value you assigned and the benefit you received.
This would also catch the "Buy, Borrow, Die" / Step-Up scheme that the ultra-wealthy use.