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AMIDST THE DARKNESS, A FEW BRIGHT SPOTS IN THE FIGHT AGAINST
INEQUALITY  
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Sarah Anderson
November 6, 2024
inequality.org
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_ Washington state beat back efforts to repeal both a capital gains
tax and a payroll tax that funds long-term care insurance. Illinois
voters showed support for a tax hike on millionaires. Three red states
passed paid leave. _

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If you’ve ever questioned whether our country has an inequality
problem, this election should provide all the evidence you need. As
billionaires used their financial firepower to throw support their
preferred candidates’ way, Americans who’ve been left behind took
out their frustrations at the ballot box.

How do we get started on this next chapter in the fight to reverse
extreme inequality? With Senate Republicans still short of a
filibuster-proof supermajority, next year’s debate over the
expiration of the Trump tax cuts could still present one opportunity.

But it’s also likely that any near-term policy progress will have to
start at the city and state levels and work its way up to the federal
level. Three progressive tax victories from last night are an
encouraging sign.

Washington state’s Initiative 2109 was the most important
tax-related ballot measure of the year. Hedge fund executive Brian
Heywood bankrolled this campaign, hoping to repeal the state’s
innovative capital gains tax on high earners.

With 62 percent of votes counted, the rollback proposal went down in
a 63-37 landslide
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“This victory shows that advocacy in support of creating a more
equitable tax code works,” Melinda Young-Flynn, Communications
Director at the Washington State Budget and Policy Center, told
Inequality.org.

“So many groups and individuals – including business owners, labor
unions, teachers, racial justice advocates, parents, lawmakers, and
many more – have worked together for more than a decade to help the
public at large in our state make the connection between commonsense
progressive taxes and the very real needs of our communities.”

Introduced in 2022, Washington state’s path-breaking policy
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a 7 percent excise tax on capital gains from the sale of stocks,
bonds, and other assets that exceed $250,000 per year (excluding real
estate sales
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makes that much from their financial investments? Fewer than 1 percent
of the state’s richest residents.

“This victory shows that advocacy in support of a more equitable tax
code works. So many business owners, labor unions, teachers, racial
justice advocates, parents, lawmakers, and more have worked together
for more than a decade to help the public make the connection between
commonsense progressive taxes and the very real needs of our
communities.”
Melinda Young-Flynn, Communications Director at the Washington State
Budget and Policy Center

Prior to the introduction of this tax in 2022, Washington’s wealthy
had flourished under a state constitution that prohibits income tax.
The capital gains tax does an end-run around that ban and the state
supreme court has ruled it constitutional.

In its first two years, the capital gains levy has raised $1.3 billion
for investments in child care and early learning, public schools, and
school construction.

“The people of Washington have sent a clear message,” says
Young-Flynn. “The well-being of kids takes precedence over tax
breaks for the ultra-wealthy. All those of us who care about economic
justice know it’s well past time to stop giving the ultra-wealthy a
special deal in the tax code at the expense of everyone else.”

Washington state voters also beat back an effort to allow employees to
opt out of a new payroll tax for long-term care insurance if they
waive the benefit of that state-operated program. If this measure had
passed, it likely would’ve rendered the insurance program
financially unviable. Fortunately, voters rejected the proposal by
a 55-45 margin
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In Illinois, voters expressed support for an extra 3 percent tax on
income of over $1 million, with revenue going to property tax relief.
With 89 percent of votes counted, Illinois voters approved the ballot
measure by an 89-11 margin
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While this measure is nonbinding, organizers hope this victory will
stoke efforts to put a constitutional amendment on the ballot in 2026
to authorize the new tax on the rich.

In addition to these fair tax victories, I’m heartened by the
passage of pro-worker reforms in several “red” states last night
— in sharp contrast to the positions of their Republican
representatives in the U.S. Congress. Voters in Nebraska, Missouri,
and Alaska approved guaranteed paid leave and Missouri and Alaska also
passed state minimum wage hikes.

A friend just wrote to me with this message: “A tree outside my
window is nearly bare. Perhaps it is an image of our national life
this morning. We have a choice: to focus on the bare branches or to
appreciate the colorful leaves.”

These state victories against the scourge of inequality are some of
the colorful leaves I’m appreciating today.

[Head shot of a blond woman]

_Sarah Anderson directs the Global Economy Project and co-edits
Inequality.org at the Institute for Policy Studies._

Inequality.org [[link removed]] has been tracking
inequality-related news and views for nearly two decades. A project of
the Institute for Policy Studies since 2011, our site aims to provide
information and insights for readers ranging from educators and
journalists to activists and policy makers.

Our Inequality.org contributors come from the United States and around
the world. Our focus throughout: What can we do to narrow the
staggering economic inequality that so afflicts us in almost every
aspect of our lives?

If you would like to support and help expand our work, please consider
making a donation
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* economic inequality
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* tax reform
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* paid leave
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* voter initiatives
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