While the idea of a special tax on millionaires is hotly debated across the country, Maine state Rep. Cheryl Golek characterized her state’s new tax as a modest and reasonable step toward fairness.

That’s because, she said, working- and middle-class households in Maine — including teachers, firefighters and nurses — are paying effective state income tax rates similar to or higher than those of the highest earners.

“Those who benefit the most from our economy do so because of the people, infrastructure and communities that support that success,” said Golek, a Democrat. “Asking for a small additional contribution from the wealthiest in our state is a reasonable and widely supported step toward a fairer system.”

The legislation signed by Democratic Gov. Janet Mills this month will add a 2% tax to households whose income exceeds $1 million per year.

Maine and Washington, which enacted its own law last month, are among the latest Democratic-led states to ask for more tax dollars from the rich as national wealth inequality widens and states face heightened budget pressures. They follow the lead of other states including New Jersey and Massachusetts that have implemented specific taxes for the rich.

The idea is gaining traction as lawmakers in at least a dozen states, including Illinois, Minnesota, Rhode Island and Virginia, have proposed new taxes for the wealthiest taxpayers. In California, advocates this week announced they gathered enough signatures for a ballot initiative that would impose a one-time tax on billionaires. But these proposals often stir yearslong battles.

The taxes can take different forms — taxing annual incomes above a certain threshold or taxing capital assets, including high-value stocks and real estate. Earlier this month, New York Mayor Zohran Mamdani and Gov. Kathy Hochul, both Democrats, proposed a new pied-à-terre tax for homes valued above $5 million when owners have a separate primary residence outside of New York City.

In neighboring New Jersey, those earning over $1 million per year face an income tax top rate of 10.75% in addition to a so-called mansion tax on the sales of high-value homes.

Proponents say these moves can help balance state tax structures that are tilted against lower earners. The left-leaning Institute on Taxation and Economic Policy says the tax systems of 40 states favor the wealthiest earners. But opponents argue that these measures levy new taxes on business owners, dissuading local investment and encouraging rich residents to move away — especially risky during a time when many other states are slashing taxes.

“When the outlook of our population growth is stagnant and we should be attracting people to Maine, it puts a disincentive to people to call Maine home,” Patrick Woodcock, president and CEO of the Maine State Chamber of Commerce, said during a news conference ahead of the state House vote on the tax.

The rising push to tax the wealthy in liberal states comes as some red states are moving to more regressive tax systems, which put a higher burden on lower earners.

“You increasingly have two poles where you have a larger number of states with fairly low income taxes and a smaller but still significant number of states that have doubled down on high rates, particularly high rates on high earners,” said Jared Walczak, senior fellow at the conservative-leaning Tax Foundation.

He said increasing income taxes pushes wealthy people and employers to low-tax states. Even if individuals don’t directly move because of taxes, they follow businesses to other states, he said.

And some progressives are wary of going too far: California Democratic Gov. Gavin Newsom is opposing the ballot initiative that would impose a one-time 5% tax on those whose net worth exceeds $1 billion. Hochul, who pushed for the new tax on second homes in New York City, has warned that more tax increases on the millionaires and billionaires could hollow out a crucial portion of the state’s tax base.

Walczak said only a handful of in-demand places can afford to impose higher taxes for the same reason that people pay higher rents.

“It’s worth it to a lot of people,” he said. “People are willing to pay very high rent, but there’s a limit. In the same way, they’re willing to pay higher taxes to live in New York, but there is a limit.”

Rising wealth inequality

The gap between the rich and poor has been widening for decades.

Wealth for the bottom fifth of American households has barely moved in recent decades, while the top 0.1% have seen their wealth increase by nearly $40 million each, according to an analysis by the anti-poverty nonprofit Oxfam America.

Between 1980 and 2022, the share of national income going to the top 1% doubled, while the share going to the bottom 50% fell by a third, Oxfam reported.

Recent federal policy changes have only exacerbated the need for progressive state tax changes, said Amber Wallin, executive director of the State Revenue Alliance, which is lobbying for higher taxes for the wealthy across multiple states.

President Donald Trump’s major tax and spending bill, often called the One Big Beautiful Bill Act, slashed funds for safety net programs including food stamps and Medicaid. At the same time, it provided tax cuts that largely benefit the wealthy.

“So we know millions will lose access to healthcare, millions will lose food assistance, and states all across the country will see funding cuts for key programs,” she said. “We know that people power a strong economy, not tax cuts for the wealthy, and when the rich pay their fair share of taxes, we all benefit.”

Since Massachusetts voters in 2022 approved a 4% surtax on annual incomes above $1 million, that Fair Share Amendment has provided the commonwealth with $6 billion in transportation and education funding.

But Jim Stergios, executive director at the libertarian-leaning Pioneer Institute, said it’s not just the ultra-wealthy who are paying that tax. People who record a one-time sale of a business or a home can face the tax even if they’re not earning over $1 million every year, he said.

He said the tax is pushing residents out of the state and dampening business investment. Federal data from the U.S. Census Bureau shows Massachusetts lost more than 33,000 residents to other states last year, though Democratic Gov. Maura Healy noted the overall population did increase because of foreign immigration. Stergios noted lawmakers are still facing challenges balancing the state budget even with the new revenue.

“So over the long term, it’s not going to have a salutary effect,” he said. “We’re going to continue to have budget problems. We do have budget problems even with this.”

Proponents and opponents of the state’s millionaire’s tax have touted recent IRS data in their arguments: Residents leaving Massachusetts took a total of $4.2 billion in adjusted gross income with them in 2023, the first year of the new tax, Bloomberg reported. Yet the number of residents moving out of Massachusetts who reported income of $200,000 or more fell after the tax was implemented.

“There’s no real evidence of millionaire out-migration. I’m sure there’s some isolated anecdotes, but the actual data don’t show it,” said Phineas Baxandall, director of research and policy analysis at the left-leaning Massachusetts Budget and Policy Center.

He said one piece of evidence that the wealthy remain in Massachusetts are the proceeds of the tax itself, which are funding major priorities including free community college and expanding childcare subsidies for thousands.

“Massachusetts is rightfully fearful of the federal cuts that are happening,” Baxandall said, “but we’ve been able to still move forward with real, transformational investments.”

Multiyear efforts

Though interest in raising taxes on the rich is growing across the country, the idea faces considerable skepticism and often requires years of organizing.

In March, Michigan advocates announced they would suspend their campaign to put on the statewide ballot a 5% tax on individual incomes over $500,000 and joint incomes over $1 million.

“We always knew that we were going to face strong headwinds from billionaires who don’t want to pay their fair share,” Rachelle Crow-Hercher, president of the Invest in MI Kids steering committee, said in a statement to Michigan Advance. That coalition plans to eye the 2028 election cycle instead, she said.

Last week, Illinois House Speaker Emanuel “Chris” Welch announced he would drop a push for a new millionaire’s tax as Democrats came up short of the necessary supermajority needed to put the issue on this fall’s ballot.

Welch believes the issue will come before lawmakers again, but after missing a key legislative deadline it won’t be eligible for a statewide vote until 2028. He said it remains popular among voters. Lawmakers proposed using proceeds of a new tax for schools and property tax relief.

“I believe that we should tax the rich and the rich should pay more,” he said. “To those who much is given, much is required.”

Meanwhile, the newly enacted Washington tax faces a lengthy, though expected, court challenge.

The legislation signed last month by Democratic Gov. Bob Ferguson imposes a 9.9% tax on household income above $1 million a year. Opponents argue that income is property and thus must be taxed uniformly because of state constitutional requirements.

In addition to the constitutional concerns, Republican state Rep. Jim Walsh said the new law opens the door for lawmakers to eventually expand income taxes to more households — not just the rich. Instead of raising revenue, he said Democratic lawmakers should focus on cutting spending, noting the state operations budget has more than doubled in the past decade.

“The problem is not the financing mechanism of the state’s operations,” he said. “It’s the rate at which far-left advocates in the legislature have been increasing state government spending in the state. It’s ridiculous.”

To Democratic state Sen. Noel Frame, the legislation brings the state’s regressive tax code more in line with Washington’s progressive politics. With no statewide income tax, sales and property taxes leave lower income earners to cover more of the cost of state services, making Washington’s one of the nation’s most regressive tax systems.

“For all the things that we do that are good, big, bold economic policy — to have the tax code that we have is just an embarrassment, and it’s completely out of line with our values as a state,” Frame said.

Like the push for a $15 minimum wage started in liberal cities and states, Frame expects the millionaire tax movement will spread into more conservative areas.

Already, some conservative states, including Idaho, Indiana and Florida, have made moves to reject some of last year’s federal tax changes that benefit corporations and the wealthy.

“The people are demanding better,” Frame said. “And the more that people understand the deep connection of tax policy to income and wealth inequality, the more engaged they become.”

Stateline reporter Kevin Hardy can be reached at khardy@stateline.org. 

Nearly one-fifth of Americans relied on drinking water systems with elevated and potentially dangerous levels of nitrate in recent years, according to a new study released Thursday.

The nonprofit Environmental Working Group examined test data collected by water systems across the country between 2021 and 2023, the most recent data available. 

Water systems serving more than 3 million people exceeded the federal safety limit of 10 milligrams per liter over the three years, the research and advocacy organization found.

The analysis also found that thousands of water systems serving more than 62 million people reported nitrate levels above 3 milligrams per liter at least once during those years, which indicates human-caused drinking-water contamination. 

Researchers are increasingly questioning whether the federal threshold should be lowered as more studies find links between even low levels of nitrate consumption and cancer and birth defects. Federal law limits nitrate levels in drinking water because of its association with blue-baby syndrome. 

Nitrate is a natural component of soil, but has become a growing problem for drinking water systems because of crop farming’s use of nitrogen fertilizers and runoff of nitrogen-rich manure from livestock operations.

States with big agricultural industries recorded more reports of elevated nitrate levels. In fact, the report found that 64% of all water systems that recorded nitrate levels at or above the legal limit were in just five states: California, Texas, Kansas, Nebraska and Oklahoma. 

But Anne Schechinger, the organization’s senior director of agriculture and climate research who authored the report, said the issue affects urban and rural areas alike.

“A lot of people have this idea that this issue is just a rural issue for small towns near farms. But we found with this analysis that that is not just the case,” she told Stateline. “Based on how watersheds work, you can live very far from a farm and still be drinking water contaminated with nitrate.”

The analysis relies on public records obtained from public drinking water systems in every state except New Hampshire, where data was not provided, she said. In addition to its report, the Environmental Working Group created a map showing community water systems with elevated nitrate levels across the country.

Elevated nitrate levels have befuddled water providers across the country for years. Not only are they expensive to remove from drinking water supplies, but nitrate levels can fluctuate with the seasons as heavy rains can quickly push remnants of fertilizer or manure into streams and rivers. 

Iowa’s largest water provider last year asked residents to refrain from watering lawns, filling pools and washing cars as its nitrate removal system struggled to keep up with elevated levels. 

Des Moines is home to one of the largest nitrate removal systems in the world, which costs about $16,000 per day to operate, officials said. Smaller communities that rely on groundwater have been forced to dig deeper wells, Schechinger said.

Climate change is further fueling the problem: Agriculture is a major driver of greenhouse gas emission. The heavy rainfalls and prolonged droughts from more extreme weather worsen nitrate runoff into lakes, rivers and groundwater. 

“We know those climate conditions are going to make this problem worse,” Schechinger said. “And that’s likely to cost us all more and also (raise) more concerns for our health.”

Stateline reporter Kevin Hardy can be reached at khardy@stateline.org.

As states enact stricter work requirements for the federal food stamp program, a new analysis suggests those requirements won’t enhance employment and will push more people off of food assistance. 

The researchers conducted a review of studies on work requirements and concluded that “the best evidence shows they do not increase employment. Moreover, this research finds work requirements cause a large decrease in participation in SNAP.”

The research from The Hamilton Project, an economic policy initiative at the left-leaning Brookings Institution, comes at a time of major upheaval for the Supplemental Nutrition Assistance Program, or SNAP. Participation is already declining as states implement changes mandated by the president’s major tax and domestic policy law enacted last summer. 

Since the fall, states and counties that administer SNAP have been notifying residents who rely on food stamps that they must meet work requirements or lose their food assistance. Those changes affected exemptions to work requirements for older adults, homeless people, veterans and some rural residents, among others. 

Known as the One Big Beautiful Bill Act, the law mandated cuts to social service programs, including Medicaid and food stamps.

While SNAP enrollment is declining nationally, more people will likely lose food assistance as states continue to implement the work requirements and recertify participants, said Lauren Bauer, a fellow in economic studies at Brookings Institution and the associate director of The Hamilton Project. 

“Everything that we know about work requirements is that they do not increase employment among the groups that are subject to them,” she told Stateline. “All they do is make it more likely that they are disenrolled from the program. And so, should these work requirements continue to be rolled out and implemented, we would expect to see declining enrollment and no changes in employment.”

Bauer said the growing body of research on SNAP has changed her mind about its ability to affect employment. While food stamps reach millions of people each year, the program’s work requirements have proven ineffective, confusing and burdensome, she said. 

“I am now of the mind that SNAP should be an anti-hunger program, and there are many, many ways to do workforce development, career ladders, career training, job search — all of those things. That’s not an anti hunger program and it shouldn’t be associated with it.”

What’s more concerning to her is how the stricter work requirements will affect people who lose jobs in an economic downturn. Traditionally, SNAP has been one of the most effective social supports for the unemployed, helping people who lose their jobs quickly gain food assistance. But laid-off workers will increasingly be told they cannot receive benefits without working. 

“It’s just this dissonant, unhelpful interaction that you have with the government,” Bauer said. “I lost my job, I need food benefits. Well, you can only get food benefits if you have a job.”

At least 2.5 million low-income people, or 6% of those enrolled, have lost SNAP benefits since the legislation was signed into law, according to a study by the left-leaning Center on Budget and Policy Priorities published Wednesday.

Bauer said it’s unclear how much of that decline is directly related to the federal legislation. That’s because SNAP participation generally declines during times of economic prosperity and increases during downturns.

But the program is facing unprecedented changes: Under the new law, states have also lost funding for nutrition education programs, must end eligibility for noncitizens such as refugees and asylees, and will lose work requirement waivers for those living in areas with limited employment opportunities. States are also forced to cover more of the costs of the program. 

Earlier this week, a USDA spokesperson applauded the drop in SNAP participation, noting the program’s rolls had fallen below 40 million for the first time since the pandemic. The spokesperson told States Newsroom the program would continue “to serve those with the greatest need while also strengthening program integrity.”

Republicans, including  U.S. House Speaker Mike Johnson of Louisiana, have defended the legislative changes to SNAP, arguing they will help eliminate waste and fraud in the program.

In a June news release, he characterized SNAP as a “bloated, inefficient program,” but said Americans who needed food assistance would still receive it.

“Republicans are proud to defend commonsense welfare reform, fiscal sanity, and the dignity of work,” Johnson said in the release.

Stateline reporter Kevin Hardy can be reached at khardy@stateline.org.