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On the coasts, a push for a millionaire tax hike

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Some states are turning to their wealthiest residents to bring in much-needed revenue.

The governors of the two largest Democrat-controlled states want rich folks to help close budget gaps. And Democratic lawmakers elsewhere are preparing to do battle with Republican leaders to blunt budget cuts by instituting a millionaire tax.

This marks a shift from last year, when state leaders largely shied away from raising taxes in general. Several cash-strapped states, including Maryland, New Jersey and Oregon, let their millionaire taxes lapse.

After refusing to renew New York’s millionaire tax, Gov. Andrew Cuomo ended up hiking the levy on incomes exceeding $2 million. The increased revenue will close about half of the state’s $3.5 billion budget gap for the coming fiscal year.

California Gov. Jerry Brown built his budget assuming that voters will approve a $6.9 billion tax package on the November ballot. He’s planning to sell the plan during his State of the State address on Wednesday.

If the ballot measure passes, three new tax brackets would be created. Single taxpayers would fork over an additional 1 percentage point on earnings over $250,000, 1.5 percentage points on income over $300,000 and 2 percentage points on earnings over $500,000. The higher rates would be in effect for the 2013 through 2016 tax years.

In addition, Brown wants to raise the sales tax by half a percentage point.

In New Jersey, voters favor instituting a millionaire tax by a 2 to 1 margin, according to a Quinnipiac University Poll conducted late last year, marking an all-time high.

Conservatives argue that while raising taxes on the wealthy might bring in more money in the short term, it could hurt any state’s economy in the long run.