Your Survival Guy has been sounding the alarm on wealth taxes, but California seems hell-bent on driving away its remaining wealthy residents. To that end, California’s Assembly will hear a bill on implementing a massive wealth tax on its affluent residents (including part-time residents and even those who have recently moved out of the state). The editorial board of The Wall Street Journal discusses the wealth tax, writing:
Progressive ideas that originate in California have a habit of spreading. So it’s worth paying attention to legislation moving in Sacramento to establish a wealth tax on high earners and a bounty-hunter scheme for plaintiff attorneys to target alleged tax dodgers.
Democrats introduced the bill last winter, and it will get a hearing Wednesday in the state Assembly as lawmakers scrounge for revenue to fill a projected $68 billion budget hole. Gov. Gavin Newsom on Wednesday will also unveil his budget for the coming year. Democratic legislators are proposing a wealth tax as an alternative to spending restraint.
The bill would impose an annual excise tax of 1.5% on the worldwide net worth of every full- and part-year California resident that exceeds $1 billion, starting this tax year. Come Jan. 1, 2026, the state would tax wealth that exceeds $50 million at a rate of 1% each year, with an additional 0.5% tax on assets valued at more than $1 billion.
Part-time residents would be taxed on a pro rata share of their wealth based on the number of days they spend annually in California. The tax would also apply to nonresidents who have recently left the state. You can check out of the state, but you would still have to pay California’s wealth tax if you do.
Action Line: According to the Tax Foundation, California already has America’s fifth-highest tax burden. How much more can residents endure? If you live in a high-tax state like California and you’re looking for a better America, begin your search with Your Survival Guy’s 2023 Super States, and click here to subscribe to my free monthly Survive & Thrive letter to be among the first to receive my upcoming 2024 Super States update.
