Critic: Alex Lee’s wealth tax an “invitation” for billionaires to leave CA?
California’s billionaire population may be threatened if controversial new bill AB 2289 passes, argues the Daily Breeze’s editorial board. SJ Assemblymember Alex Lee has proposed a “wealth tax” on residents’ total assets — which might prove the last straw for billionaires to U-Haul it to Texas or Florida. The analysis (excerpted) follows.
Assemblymember Alex Lee, D-San Jose, complained that “there’s a whole other category of wealth where you just own things,” and income tax doesn’t capture a share of it. So he has re-introduced a proposal that would slap a 1% annual tax on the global assets of Californians with a net worth of at least $50 million, 1.5% on the holdings of anyone with assets of more than $1 billion.
The proposed legislation is Assembly Bill 2289, and it is supported by the California Federation of Teachers despite record spending on education in the current state budget. CFT president Jeff Freitas said in a statement, “California billionaires have increased their wealth astronomically since the beginning of the pandemic, while regular working folks have struggled to pay their bills.”
But the disparate impact of pandemic restrictions is only the latest justification offered for redistributionist tax schemes in California, which already has the highest marginal state income tax rates in the country. With a top tax rate of 13.3% on the highest-earning Californians, the argument that the rich are not paying “their fair share” is absurd.
When last year’s version of the “wealth tax” was under consideration, a report from the California Policy Lab on the alleged “CalExodus” noted that the top 0.5% of California taxpayers account for 40% of state income tax revenues.
Although the researchers said they found no evidence of a “pronounced” exodus from the state and “little” evidence that wealthy Californians are leaving “en masse,” they noted that “the choice of a single billionaire to leave the state could have an outsized effect on the state’s coffers.”
This article originally appeared in the Daily Breeze. Read the whole thing here.
This article is part of an Opp Now series on local wealth tax proposals:
The CG’s Chris Micheli reports on California legislators’ proposed raid on taxpayer earnings, euphemistically called a "wealth tax."
CalMatters journalist Dan Walters explains why some Californians are questioning recent statewide efforts to tax (more—or out?) the rich.
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