The potential for a Kamala Harris presidency has sparked concerns among high-income earners nationwide about how changes to tax policy could impact their wallets. While wealthy individuals across the country could feel the effects, experts suggest that certain states might experience a more pronounced impact.
Cliff Ambrose, founder and wealth manager at Apex Wealth, points out that states with existing high taxes, such as California and New York, could face the most significant financial consequences. Anthony DeLuca, a financial planner at Annuity.org, agrees, highlighting that any state with a state income tax would become more burdensome for upper-class individuals, particularly if federal tax increases are implemented.
DeLuca warns that New York residents, in particular, might face a combined federal-state capital gains tax rate of 43.9% if Harris wins the presidency. This is further compounded by the fact that New York and California are home to a large number of S&P 500 headquarters, suggesting that the concentration of major corporations in these high-tax states could have wider economic ramifications.
Even states without income taxes, like Florida, might not escape the impact entirely. Ambrose suggests that upper-class residents in these tax-friendly states could still experience changes in their paychecks due to potential shifts in federal tax policy.
DeLuca also emphasizes New Jersey and Massachusetts as states where upper-class incomes could be significantly affected. He notes that these states, along with New York and California, could see combined federal and state tax rates for high-income earners rise above the 40% mark.
Beyond income and capital gains taxes, DeLuca highlights another crucial factor: energy policy. States heavily reliant on fossil fuel industries could face economic shifts under a Harris administration. Wyoming, for example, produces 41% of U.S. coal production and any employer or family business grounded in this industry could be at risk from Harris’s economic and energy administration ideas. New Mexico, which accounted for 13% of U.S. crude oil production in 2022, could also face challenges if funding shifts toward alternative energy sources.
Understanding the potential changes under a Harris administration requires recognizing that they are part of a larger policy agenda. Harris’s proposed tax increases on high earners aim to fund programs like healthcare and infrastructure, potentially impacting the broader economy. DeLuca emphasizes that many states poised for the most significant effects on upper-class paychecks are also key national gross domestic product players, highlighting the complex relationship between tax policy, economic growth, and income distribution.
It’s crucial to remember that campaign proposals are just that – proposals. They don’t always become law as envisioned, as any legislative changes must navigate the complexities of Congress.
