Some California politicos are proposing an additional “wealth tax” on the state’s richest residents.
And while many of you will laugh at my pain, the Democrats want this tax enacted nationally…so it concerns you, too.
Assemblyman Alex Lee, a progressive Democrat from San Jose, filed legislation that would tax an extra 1.5% on Californians with a worldwide net worth of more than $1 billion starting January of 2024, and 1% for those making more than $5o million starting in 2026.Lee’s proposal aims to tax assets such as stocks and bonds that can skyrocket in value without incurring taxes until they’re sold. He said the tax would apply to the top .1% of California earners and could generate about $22 billion.”For far too long, we’ve allowed income inequality to deepen and fester in this state and this country while the rich get richer and the middle class shrinks behind,” Lee said Monday.The legislation is part of a multi-state effort from progressive lawmakers across the country who say the nation’s top earners need to pay their fair share.
The proposal includes an “exit tax,” dings former Californians even years after leaving the state and moving elsewhere.
Exit taxes aren’t new in California. But this bill also includes provisions to create contractual claims tied to the assets of a wealthy taxpayer who doesn’t have the cash to pay their annual wealth tax bill because most of their assets aren’t easily turned into cash. This claim would require the taxpayer to make annual filings with California’s Franchise Tax Board and eventually pay the wealth taxes owed, even if they’ve moved to another state.California was one of several blue states last week to unveil bills to impose new wealth taxes. The other states were Connecticut, Hawaii, Illinois, Maryland, Minnesota, New York and Washington. Each state’s proposal contained a different tax approach, but they all centered around the same basic idea: the rich must pay more.
Clearly, the state’s Democratic Party leadership is trying to stop the fiscal bleeding. The exodus from California picked up the pace considerably in 2022.
A growing number of Americans migrated from predominantly blue states with steep taxes like California and New York to red states with lower taxes like Florida and Texas last year, according to a Bank of America analyst note that is based on findings from U.S. Census Bureau data and U-Haul rates.Although the entire U.S. population as a whole grew by just 0.4% between July 2021 and July 2022, the data underscores major differences in population growth at the state level.The South, which has states with some of the lowest individual income taxes in the country, was the fastest-growing region. Its population increased far faster than the national average, jumping by about 1.1% – or roughly 1.4 million people last year – a phenomenon described as the “Sun Belt migration.” The region also benefited from about 870,000 Americans who left other parts of the country for warmer climates and lower taxes.
In fact, the state of the state is so dire….Governor Gavin Newsom is threatening to cut spending on climate change projects.
California Gov. Gavin Newsom is proposing to cut billions of dollars in climate spending and delay funding of major programs to balance a $22.5 billion budget deficit if tax revenues don’t rebound.The $297 billion budget blueprint Newsom unveiled on Tuesday was a stark departure from the fiscal boom times California enjoyed as recently as last year, when an unprecedented $100 billion surplus that Newsom himself called “absurd” underpinned a record $310 billion budget. California has $29.5 billion less revenue this year.
The obvious flaws in the proposal have been noted by many:
I must note a savvy music reference:
Sadly, despite my plea, I think many of you agree with this sentiment:
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