Startup Investors’ Widened Tax Break Is Hard for States to Quit

States that have matched a federal tax break for startup investment gains that mostly benefits wealthier individuals are having a difficult time separating from the policy, even though it stands to collectively cost them hundreds of millions of dollars in missed revenue this year.

New York Democrats recently backed off a decoupling proposal after a lobbying effort from the tech industry, despite securing support from a key lawmaker.

Maine Democratic lawmakers went against Gov. Janet Mills (D) to sever their state from the federal tax break. And Oregon Gov. Tina Kotek (D) approved decoupling from the tax break ...