# California's wealth tax proposal. Thoughts? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [October 29, 2020, 1:33am UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169 "2020-10-29T01:33:09Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Saint\_Cad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/saint_cad/32/18907_2.png) [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)\ **Post date:** [October 29, 2020, 1:33am UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169/1 "2020-10-29T01:33:09Z")
California wants to tax the assets of those in California at 0.4% with a worth of $30M or more. What’s wrong with taxing the rich? Maybe a few things. The Legislative summary states “The tax takes into account all assets and liabilities held by an individual, globally, capturing the immense levels of accumulated wealth held by the top 0.1% of Californians.” So you are taxed on wealth held outside of California. And that is independent of income. If you have $30M in worldwide assets including but not limited to (1) Stock in any publicly and privately traded C-corporation. (2) Stock in any S-corporation. (3) Interests in any partnership. (4) Interests in any private equity or hedge fund. (5) Interests in any other noncorporate businesses. (6) Bonds and interest-bearing savings accounts. (7) Cash and deposits. (8) Farm assets. (9) Interest in mutual funds or index funds. (10) Put and call options. (11) Futures contracts. (12) Art and collectibles. (13) Financial assets held offshore. (14) Pension funds. (15) Other assets, excluding real property. (16) Debts other than mortgages or other liabilities secured by real property. (17) Real property. (18) Mortgages and other liabilities secured by real property. You are responsible for $120,000 more in taxes whether or not you made it as income. California taxation is already making the wealthy leave in droves. But California [has a solution for that](https://californiapolicycenter.org/will-a-wealth-tax-make-californias-wealthy-flee/). > No problem. The super-rich may leave California, but California won’t leave them. In year one of their exile, they’ll still pay 90 percent of the 0.4 percent wealth tax. In year two: 80 percent. Year three: 70 percent. It will take a decade before the long arm of California’s Franchise Tax Board lets go. And then of course if in any one of those years a wealthy exile might venture back into the Golden State for more than 60 days, tack that onto whatever else is owed. I imagine Justice Thomas is drooling declaring that unconstitutional under the Privileges and Immunities Clause. Hmmm drive out those that pay the taxes (I’ve heard the top 1% of Californians pay 46% of the state income tax and that is in addition to business taxes), that’s a good plan. Oh and there are probably a lot of reasons this law will be thrown out on constitutional ground because I’m pretty sure this will pass in California. What are all of your thoughts? ---
**Author:** ![Gatopescado](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gatopescado/32/5711_2.png) [@Gatopescado](https://boards.straightdope.com/u/Gatopescado)\ **Post date:** [October 29, 2020, 5:42pm UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169/2 "2020-10-29T17:42:43Z")
> [@Saint\_Cad](#): > > What are all of your thoughts? I would never live in California again. It’s bad enough that I’m close enough to see it. ---
**Author:** ![gdave](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gdave/32/3683_2.png) [@gdave](https://boards.straightdope.com/u/gdave)\ **Post date:** [October 29, 2020, 6:08pm UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169/3 "2020-10-29T18:08:24Z")
My thought is there was already a thread on this a couple of months ago… > [@California Bill Would Apply Wealth Tax to Residents Who Left the State in the Last 10 Years](https://boards.straightdope.com/t/california-bill-would-apply-wealth-tax-to-residents-who-left-the-state-in-the-last-10-years/918461): > > [California Legislators Propose Wealth Tax](https://californiaglobe.com/section-2/california-legislators-propose-wealth-tax/) The bill would impose a tax of 0.4% of a state resident’s worldwide net worth in excess of $30 million, or in excess of $15 million for married taxpayers filing separately. A not surprising tax considering California’s current financial situation. The eyebrow raising part however. Section 50310 also provides special apportionment rules for the wealth tax. Basically, the “the portion of a taxpayer’s wealth subject to the tax imposed by this part sh… ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [October 29, 2020, 6:41pm UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169/4 "2020-10-29T18:41:42Z")
> [@Saint\_Cad](#): > > No problem. The super-rich may leave California, but California won’t leave them. In year one of their exile, they’ll still pay 90 percent of the 0.4 percent wealth tax. In year two: 80 percent. Year three: 70 percent. It will take a decade before the long arm of California’s Franchise Tax Board lets go. And then of course if in any one of those years a wealthy exile might venture back into the Golden State for more than 60 days, tack that onto whatever else is owed. In the previous thread, it was pointed out that this is an inaccurate summary. California _can’t_ tax previous residents. The 10-year prorating is for people to move _to_ California. I am generally in favor of wealth taxes and enjoy pointing out that everyone other than the ultra-rich are already taxed effectively on their wealth, as the value of real estate is a very effective proxy for assets for everyone in the lower 99% and real estate is pretty universally taxed based on its value. It’s only the super rich who aren’t already taxed on the value of their assets. ---
**Author:** ![gdave](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gdave/32/3683_2.png) [@gdave](https://boards.straightdope.com/u/gdave)\ **Post date:** [October 29, 2020, 7:53pm UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169/5 "2020-10-29T19:53:52Z")
> [@iamthewalrus\_3](#): > > > [@Saint\_Cad](#): > > > > No problem. The super-rich may leave California, but California won’t leave them. In year one of their exile, they’ll still pay 90 percent of the 0.4 percent wealth tax. In year two: 80 percent. Year three: 70 percent. It will take a decade before the long arm of California’s Franchise Tax Board lets go. And then of course if in any one of those years a wealthy exile might venture back into the Golden State for more than 60 days, tack that onto whatever else is owed. > > In the previous thread, it was pointed out that this is an inaccurate summary. California _can’t_ tax previous residents. The 10-year prorating is for people to move _to_ California. Ackshually…Take another look at that thread. I read the bill that way myself, and stated so in that thread, but then watched this interview: > **[Cavuto presses California assemblyman over wealth tax plan amid millionaire...](https://www.foxbusiness.com/fbntv/neil-cavuto-california-rob-bonta-wealth-tax)** > > Fox Business Network anchor Neil Cavuto questioned California State Assemblyman Rob Bonta on "Cavuto: Coast to Coast" Friday over his proposal to institute a 0.4% wealth tax on Golden State residents worth more than $30 million. It’s an interview with the Assemblymember who introduced the bill. He pretty clearly seems to indicate that the intent is in fact to continue taxing former California residents for up to 10 years (at a pro-rated, diminishing rate) even _after_ they leave California. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [October 29, 2020, 7:59pm UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169/6 "2020-10-29T19:59:31Z")
Thanks for the cite. I stand corrected. That seems… pretty questionable to me, legally. I guess we’ll see. ---
**Author:** ![Saint\_Cad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/saint_cad/32/18907_2.png) [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)\ **Post date:** [October 29, 2020, 8:03pm UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169/7 "2020-10-29T20:03:45Z")
Here is the actual text of the aw > (3) Special Rule for Wealth Tax Residents. > > (A) For taxpayers who were subject to the Wealth Tax in one of the preceding 10 years, and are no longer residents of this state as residence is defined in Section 50310, and do not have the reasonable expectation to return to this state, the calculation of the numerator under paragraph (1) shall be as follows. For the first year of nonresidence in California, a fraction between 0 and 1, as calculated under subdivision (b) of Section 50310, plus the years of residence in California over the nine previous years shall be the numerator. For each subsequent year, the number 1 should be subtracted until the numerator reaches 0. So pretty clear they will tax non-residents Oh and mods can we merge this with the previous thread? ---
**Author:** ![Projammer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/projammer/32/559_2.png) [@Projammer](https://boards.straightdope.com/u/Projammer)\ **Post date:** [October 29, 2020, 9:13pm UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169/8 "2020-10-29T21:13:22Z")
I’m pretty sure the ‘previous ten years’ clause is there to make a last grasp at everyone who will be moving out of state as a result of the tax. Bleeding the golden goose as long as they can. ---
**Author:** ![Velocity](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/velocity/32/18006_2.png) [@Velocity](https://boards.straightdope.com/u/Velocity)\ **Post date:** [October 29, 2020, 9:23pm UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169/9 "2020-10-29T21:23:40Z")
Is this enforceable? If a billionaire moves from California to Florida, and refuses to pay CA taxes in exile, how is California going to seize his income? (assuming he left no assets behind in California) ---
**Author:** ![dalej42](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@dalej42](https://boards.straightdope.com/u/dalej42)\ **Post date:** [October 29, 2020, 9:25pm UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169/10 "2020-10-29T21:25:12Z")
I’ve ignored this nonsense. I think it’s nothing but test cases for the courts. And with Warren getting destroyed in the primaries, there’s no federal wealth tax coming. ---
**Author:** ![gdave](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gdave/32/3683_2.png) [@gdave](https://boards.straightdope.com/u/gdave)\ **Post date:** [October 29, 2020, 10:37pm UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169/11 "2020-10-29T22:37:18Z")
This last time this bill was brought up on the 'Dope, there didn’t seem to be any reporting indicating that literally any legislators other than Assemblyman Bonta actually supported this bill. Has that changed? Does anyone have up to date info on how much support this bill actually has in the California Assembly? ---
**Author:** ![Saint\_Cad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/saint_cad/32/18907_2.png) [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)\ **Post date:** [October 29, 2020, 10:41pm UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169/12 "2020-10-29T22:41:54Z")
It lists 9 Assembly members as introducing it with 2 more and 3 Senators as co-authors and it is currently in committee so not killed yet and looks like it will reach the floor… ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [October 29, 2020, 10:45pm UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169/13 "2020-10-29T22:45:50Z")
You have a net worth of $30M or more?!? 💲 💲 And this isnt a serious proposal. ---
**Author:** ![octopus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/octopus/32/3716_2.png) [@octopus](https://boards.straightdope.com/u/octopus)\ **Post date:** [October 29, 2020, 11:19pm UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169/14 "2020-10-29T23:19:50Z")
It seems serious. Major politicians were campaigning on the premise of a wealth tax. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [October 29, 2020, 11:21pm UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169/15 "2020-10-29T23:21:00Z")
Warren and Sanders, yes. _losers._ ---
**Author:** ![gdave](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gdave/32/3683_2.png) [@gdave](https://boards.straightdope.com/u/gdave)\ **Post date:** [October 29, 2020, 11:38pm UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169/16 "2020-10-29T23:38:54Z")
Ok, thanks, so a more serious piece of legislation than I initially gave it credit for. Still, California requires a 2/3 majority in each house for new taxes, so I’m still kinda doubtful it has a realistic chance of being enacted. ---
**Author:** ![Saint\_Cad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/saint_cad/32/18907_2.png) [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)\ **Post date:** [October 29, 2020, 11:46pm UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169/17 "2020-10-29T23:46:18Z")
> [@gdave](#): > > Still, California requires a 2/3 majority in each house for new taxes, so I’m still kinda doubtful it has a realistic chance of being enacted. I believe the opposite CA Assembly 61D 18R 1 vacancy 53 needed to pass CA Senate 29D 11R 27 needed to pass ---
**Author:** ![gdave](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gdave/32/3683_2.png) [@gdave](https://boards.straightdope.com/u/gdave)\ **Post date:** [October 30, 2020, 12:28am UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169/18 "2020-10-30T00:28:38Z")
Ok, assuming a straight party line vote. I’m definitely not an expert on California politics, but I’m doubtful a proposal like this would be supported by an overwhelming majority of Democratic legislators. But, I guess we’ll see. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [October 30, 2020, 3:14pm UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169/19 "2020-10-30T15:14:12Z")
> [@gdave](#): > > It’s an interview with the Assemblymember who introduced the bill. He pretty clearly seems to indicate that the intent is in fact to continue taxing former California residents for up to 10 years (at a pro-rated, diminishing rate) even _after_ they leave California. There’s no way that’ll actually work out in the real world. No state is going to extradite their citizens to another state for failing to pay taxes in that other state years after they lived there. Also, I think a wealth tax is kind of terrible. At some point they were presumably already taxed on the income that became wealth, so why tax it again, just because someone accumulated a lot? If they weren’t taxed, then California needs to implement a state level capital gains tax, not a wealth tax. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [October 30, 2020, 8:46pm UTC](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169/20 "2020-10-30T20:46:04Z")
> [@bump](#): > > Also, I think a wealth tax is kind of terrible. At some point they were presumably already taxed on the income that became wealth, so why tax it again, just because someone accumulated a lot? Same argument for property taxes, right? I was taxed on the income I used to buy my house, why am I taxed annually for my wealth but the super rich aren’t? [Next page](https://boards.straightdope.com/t/californias-wealth-tax-proposal-thoughts/924169.md?page=2)