California lawmakers appear intent on making the Eagles song Hotel California a reality … at least when it comes to taxes for those who try to flee the state. At the Hotel California, “you can check-out any time you like, but you can never leave!” With soaring costs and a massive $24 billion deficit, the state is also facing an exodus of people leaving the state. The solution? Convert the state into a tax Venus flytrap: not only impose a wealth tax on those caught in the state but tax those who try to leave.
The new bill introduced by Democratic Assemblyman Alex Lee would impose an extra annual 1.5% tax on those with a “worldwide net worth” above $1 billion, starting as early as January 2024.
The law has a cynical bait-and-switch provision. The billionaire tax is just meant for the initial packaging and passage. It can therefore be sold as a “billionaire’s tax.” However, in two years, the threshold drops to a worldwide net worth exceeding $50 million. While billionaires would stay at 1.5%, those in the lower tax bracket would be hit by a 1% added rate on worldwide assets.
It also includes the taxation on those who left the state . . . many due to the high taxes. California already has the highest tax burden in the nation. It relies on its top 1% of taxpayers for roughly half of its individual income tax revenue, but continually treats those taxpayers like game in a canned hunt. The result, not surprisingly, is that they are leaving for states like Texas and Florida.
The new tax would arrange for payments to California’s Franchise Tax Board for years after a departure for those assets which are not easily converted into cash.
I have previously written how the wealth tax pushed by Democrats like Sen. Elizabeth Warren are unconstitutional under the federal Constitution. States are not subject to the same limit. Not surprisingly, the highest taxing states are pursuing the most wealthy . . . who are leaving in droves. That includes Connecticut, Hawaii, Illinois, Maryland, Minnesota, New York and Washington.
What is most striking under the proposed law is that it will not only spur more wealthy couples to leave the state but discourage any from moving into the state. Even if this ill-considered law does not pass, who wants to risk going to a state that is actively pursuing new ways to tax you even if you ever decide to leave? With many in the top one percent getting out of the state, the tax demand on the most wealthy is only likely to increase with the dwindling numbers in the top tax brackets. No one wants to be the last buffalo on the plains for the California tax collectors.
Under the existing exit tax, businesses and individuals must pay a one-time tax to leave based on the value of the business or individual’s assets, including property, stocks, and other investments. For those who have earned more than $30 million, you can continue to pay for years after fleeing the state. The current exit tax is 0.4% of an individuals’ net worth over $30,000,000 in a tax year, including assets located outside of California other than real estate.
Taxing wealth is no easy matter so the proposal seeks $660 million per year for administrative costs.
California is also considering constitutional amendments and referendums to increase taxes for the most wealthy.
Last thing I remember, I wasRunning for the doorI had to find the passage backTo the place I was before“Relax, ” said the night man“We are programmed to receiveYou can check out any time you likeBut you can never leave”
But why are they trying to destroy California? In whose best interests can it be? Clearly this isn’t a left vs right issue. At least not normal left vs normal right. SF is an open sewer. Where are they trying to go with this? What do they want the money for? To buy more drugs for the homeless? If anybody felt like they would use the money to actually restore the state to its former glory I bet people wouldn’t even mind that much. What is the ultimate goal here?
The only people defending this either A): do not live in California, or at least the tiny sliver of ‘middle class’ that remains in California; or B): do not meet the income requirements, and thereby will not suffer the cost, at least at present. And I guarantee you those initial income requirements are transitory. Seven figures will dwindle to six figures will dwindle to five figures, to even four figures, and it will all be ‘justified’, and before you know it, *everyone* is fleeing Newsom and his lackeys, not just the rich.
Modern leftists have the brain power and prescience of the rocks in their xeriscaping or the silicon in their solar panels (because decades of idiocy and neglect have led to the grid being turned off during certain hours). Never mind the legality, which should have been the first consideration. Modern liberals speaking in public, legally, is like listening to someone, privately, that legitimately suffers from Tourette syndrome. It’s about that level of worth and that level of worth taking seriously. The people that live in these elite strongholds barely resemble human beings anymore, and approximations of humanity should not be running the planet when there are another 7 billion of us that are just human, no less than they are in actuality, and likely with better solutions as we actually live in society every day.
i cannot name a single Dem representative that does not fall into the category of the elitists. Not a one. Modern dems (and global leftists) could not be more divorced from JFK, or even of simple sanity, if they had pulled the trigger themselves.
I don’t know much about this issue but it sounds a whole lot like taxation without representation. If someone has moved away from the state and is not receiving services from that state, how can they continue to owe any taxes?
The Decompensating Irrational One-Party Communist State And Dictatorship Of The Proletariat
Coming To A Town Near You
“I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve.”
– Isoroku Yamamoto
Did the left’s terrible fascist behavior awaken the nation to the dangers of leftism? We will find out in 2024.
By ’24, America will be MexiCuAfrHaiNicaraZuelaStan.
You gave your country away; there is no hope.
“[We gave you] a [severely-restricted-vote] republic, if you can keep it.”
– Ben Franklin
You couldn’t.
Why blame me?
Any one of the usually despised RINOs within the California GOP would be a dramatic improvement over the Democratic authoritarians now running the state.
And don’t forget retroactive taxes.
It’s happened before.
Isn’t it one of the politicians’ (governors, mayors, and state legislators) primary job duties to create an attractive tax climate to seduce corporations to move to their state? I remember a somewhat similar idea floated by John Kerry while in the Obama administration. The U.S. corporate taxes, at that time, were the highest in the world. Corporations were taking the base of their operations offshore. John Kerry floated the idea of making it illegal for corporations to leave, and/or penalizing them for acting in such an “unpatriotic” way. Isn’t it their job to compete against the rest of the world for corporations and all the jobs they represent? When our representatives pass taxes that are so high that corporations and citizens move, they want to declare it illegal, or they pass more taxes on those who move. We then reward our representatives by reelecting them. We get the government we want.
And when that “last buffalo” is taken down there still won’t be enough money for California’s state government to cover its expenses. It is when that reality sets in when it will finally be understood that in the end it is the undisciplined size of a government that ultimately brings about its undoing.
The state has skewed their taxes so much towards the rich that they will be devastated even if they are able to tax assets of those who leave. That tax will only diminish over time. The old saying remains true. If you tax things you will get less of it, in this case less wealthy people paying the majority of the taxes. How ironic.
“Under the existing exit tax, businesses and individuals must pay…”
Do you mean the wealthy businesses and individuals or does that apply to all?
“It also includes the taxation on those who left the state . . . many due to the high taxes.”
NY tried something similar, but many of the rich left the state. Now NY uses nuisance suits, hoping for the best settlement possible. I have a home in Manhattan, but there is no way I will stay there for 180 days. I have eaten dinner with friends who sometimes leave early because they want to stamp their toll charges before Midnight.
Frankly, states that receive CA refugees should tax CA for the massive amount of costs incurred in accepting and reeducating them.
How far away is California from printing its own currency?
Does anyone have a reasonable valuation to place on the state of California if it’s put up for sale to the highest bidder?
With its government and population protected and as is, it would be negative a trillion or two. Absent that caveat, remove the negative sign.
Have you said the word, “California?”
Even thought the word, “California?”
Even if you have never stepped foot in our state?
GOOD! We are going to tax you! And not for your current wealth, but we will tax that too! We are going to start from your conception! After school job as a life guard? We will tax it! Working as a waitress while in college? Taxed! Your 1984 K-car? You have to pay a tax on that too! What? It was in Texas? Does not matter! Got a raise recently? You know you owe us! Every time you listen to the song, Hotel California, even in an elevator, that will be $23!
Prof. Turley’s reference to CA having the highest tax burden among the states leaves out excise and sales taxes. With those taxes considered, CA comes is as 9th most highest tax states. See https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494
One of George Soros’ plots intended to destroy the fabric of this country has been using his money to elect “progressive” district attorneys who are “soft on crime.” Picture Alvin Bragg of Manhattan. But there are many, many more like Bragg. Today, the law and order of 20% of the population depends on these district attorneys, and that includes Los Angeles County. The remarkable thing is that the good citizens of Los Angeles County, like so many others elected Soros candidates like George Gascon. These citizens also voted for the liberal legislatures which come up with such ideas as taxing, taxing and more taxing. The only reasonable conclusion is that these citizens would rather have high taxes and sky-rocketing crime than, God forbid, vote for a conservative.
These citizens also voted for the liberal legislatures which come up with such ideas as taxing, taxing and more taxing.
Quitters. The majority of Americans have become parasites. They would rather suck off the blood of others like fleas, than provide for themselves. That is the reoccurring conclusion I have when I observe at the university, with students, faculty, local and national politics, and in medicine, as to where we are today in America. No one wants to lose weight below a BMI of 25 so as to avoid heart disease, type 2 diabetes, COVID severe illness, hypertension, cancer, joint disabilities, etc, etc, etc. Why lose weight when donning an N95 mask will do? Clearly Democrats are a captive audience when Americans are willing to wait in line and share their sob stories.
I was recently invited to dinner at someone’s home, a humble, simple, hardworking family. They hosted a young married couple in their 30s, who are not part of the household. The husband was unemployed, BMI > 35, smoker, on multiple meds for his multiple comorbid conditions. The wife just started a new job, some big-box retail store as a clerk, also in her 30s, also BMI > 35, both in town to visit the VA medical center. As we had dinner, the husband helped himself to seconds and thirds, sweet tea, the bread basket multiple times, then dessert 2 servings. At one point he told us, not knowing me or my profession, “my doctor can’t figure out how to treat my diabetes. I’m on 3 diabetes drugs and he might be on a 4th one”. It was then that I looked up, the host family froze and looked at me, and I said nothing to keep the peace. The couple in their 30s was not aware. It was after they left, and I was asked to stay behind by the hosts, that we had the conversation. Americans must due their part to reverse their pathology.
It might be time to pull the plug on socialized medicine and the many welfare programs in our country or go all out socialism like in the UK. Either choice will end with much pain. It should not have come to this but that is the human condition, as the Old Testament reminds us:
Go to the ant, you sluggard;
consider its ways and be wise!
It has no commander,
no overseer or ruler,
yet it stores its provisions in summer
and gathers its food at harvest.
How long will you lie there, you sluggard?
When will you get up from your sleep?
A little sleep, a little slumber,
a little folding of the hands to rest—
and poverty will come on you like a thief
and scarcity like an armed man.
– Proverbs 6:6-11
Sadly all too true. Why work out and eat well when you can get one of the many drugs advertised on TV. These people cost Medicare and Medicaid billions of dollars every year. Go to Disney in Orlando and take a look around. Oh, the humanity!
Estovir,
Wife showed me a video of a woman who’s kids still lived at home.
Both “kids” and I use the term loosely, mid-twenties, grossly over weight, multi-colored hair, no jobs. Living off their mothers income.
Read an article about “kids” living at home, while spending the income they would spent on rent or a mortgage on other luxuries.
@Estovir: Over the course of the pandemic, I’ve gone from a BMI of 40 to 32. I an excited that I am only 19 pounds away from my intermediate goal of switching from obese to simply overweight!
Curiously, I did not depend on a government program for my weight loss. Neither did I expect someone else to lose the weight for me (I suppose I could just identify as “thin”??).
From Cain being told, “If *you* do what is right, will you not be accepted? But if *you* refuse to do what is right, sin is crouching at your door; it desires you, but you must master it” (Genesis 4:2-7, BSB – emphasis added) to Achan (Joshua 7), to Jonah, and countless others: Personal responsibility revolves around living with each choice’s consequence.
Negatively, this is summarized in 2 Thessalonians 3:10 as “If anyone is unwilling to work, he shall not eat.” Positively, Christ promised, “Whatever you do, work at it with your whole being, for the Lord and not for men, because you know that you will receive an inheritance from the Lord as your **reward**. It is the Lord Christ you are serving” (Colossians 3:12, BS – emphasis added)
Of course, that same Jesus says near the end of the story, ‘Behold, I am coming quickly, and My reward is with Me, to reward each one as his work deserves” (Revelation 22:12, NASB). It’s up to each of us, individually, to examine what reward we are working to receive. Is it the one we’re hoping for?
I’m getting very homesick, indeed.
This should also go over well in the NFL, NBA and MLB. Will wonder if anyone will want to play a game there. Also would wonder if there will be NFL-to-be players in the upcoming draft who will say draft me except for California teams . Should be a boon for Los Vegas teams. Would also likely have some affect on the pending move of USC and UCLA to the Big 10. I doubt the Big 10 would care to have to deal with the California taxing authority. Could scupper the whole deal. Just one more thing to make California a former nice place. Maybe that’s why we see so many California players showing up in the SEC. Sunny in the South but Loooooow taxes as well as tougher cometition.
Just an view from a different perspective.
One aspect of this column leaves me confused. It refers to an “existing” exit tax. Does this mean there’s already an exit tax, or does “existing” mean “proposed”?
Good question. I know the Feds have an exit take for renouncing citizenship, so the USA is already a Hotel California.
California is getting what it voted for and will continue to vote for. It needs to be reborn but not before a very ugly death.