California Bill Would Apply Wealth Tax to Residents Who Fled the State in the Last 10 Years
A new so-called wealth tax in California would send tax bills even to people who have moved out of the liberal state.
The Democrats’ proposal for “an annual tax of 0.4 percent upon the worldwide net worth of every resident in this state,” according to the text of AB 2088, which would create the tax on a vast list of untaxed assets California wants to tax.
The tax would target not only current residents but anyone who has what the bill classifies as wealth and who has lived in California any time in the past 10 years. It would use a sliding scale based on the number of years a taxpayer lived in the state.
Jon Healey, the deputy editorial page editor of the Los Angeles Times, cast a jaundiced eye upon the proposal in an Op-Ed in which he noted that “the tax would also be imposed on former residents who left within the past decade, presumably to catch those who fled the state’s income tax rates, which already are the highest in the country.”
“It also would apply the highest wealth-tax rate to anyone who’d spent a decade or more in California, a bizarre choice that would only increase the incentive for longtime residents to move out,” he wrote.
Healey argued that the tax was a bad idea because there are huge uncertainties about how it would work.
“Then there are questions about how to value assets that aren’t on the market, such as a business you own that isn’t listed on the stock market,” he wrote. “The bill calls on the Franchise Tax Board to come up with a way to value non-publicly-traded assets, yet the tax would go into effect immediately.
“Nor is it at all clear how the state would enforce against the many, many ways that wealthy people would find to avoid the tax.”
Healey’s bottom line was that “it makes no sense for lawmakers to try to solve those problems by enacting a wholly new type of permanent tax with no study and no clue as to its potential unintended consequences.”
The proposal caused a stir on Twitter.
California proposed a .4% annual wealth tax that applies to former residents who already left within the past 10 years, and to current residents for ten years after they leave. The rate is reduced by 10% for each year of absence. Any wealthy person who moves into Cal. is nuts.
— Peter Schiff (@PeterSchiff) August 15, 2020
You can check out anytime you like, but your money can never really leave.
Even if you move, this new bill would continue to tax you in your new state for 10 years.
— Senator Melissa Melendez (@senatormelendez) August 15, 2020
--California Bill Would Apply Wealth Tax to Residents Who Fled the State in the Last 10 Years
-RETRIEVED-Mon Aug 17 2020 20:57:16 GMT+0200 (Central European Summer Time)