The central claim of the RIPEC report is that the adoption of a 3% surtax on taxable personal income above approximately $625,000 in taxable income (or $750,000 in pre-tax total income) of the Top 1% of the state’s tax filers, approximately 5,700 single and joint filers out of a total of well over 500,000 tax filers, would damage the state’s competitiveness and do so in a way that would more than offset the estimated $190 million in annual revenue this surtax would generate.
This claim is reminiscent of the long-discredited “trickle-down effect,” that somehow if the highest-income and wealthiest people hold onto more of their money, they will invest it in productive ways and trigger a surge of economic activity and job creation.
The RIPEC report seeks to support its claims of competitiveness and substantial economic harm by pointing to tax competitiveness rankings, interstate migration, pass-through business income, and cases from other states. As EPI's response demonstrates, the RIPEC report fails to make a convincing, data-driven case about the potential effects of enacting a Top 1% surtax.