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”
Until California hits rock bottom, its voters will not elect conservative leaders in significant numbers. Draconian exit taxes will hasten the arrival of that day.
No, not “Hotel California.” “Heartbreak Hotel.”
Even though Ross Perot is light years away from California, his ghost, nonetheless, could not help but notice that a distinct “giant sucking sound” could be heard emanating from California.
Book Mark:
https://rumble.com/v26zheq-the-interview-kyle-rittenhouse.html
Is taxing someone that no longer lives in your state Legal ? California would have a lot more money if it would stop providing food shelter and health care for it’s 2 million illegal aliens. I guess that is a fair trade. You support 2 million + illegals and get about 5 extra seats in Congress that you don’t deserve.
(3) (A) For a taxpayer who was subject to the Wealth Tax in one of the preceding four years and is no longer a resident, and does not have the reasonable expectation to return to the state, the calculation of the numerator under paragraph (1) shall be as follows:
(i) For the first year the taxpayer is not a resident, the numerator shall be a fraction between zero and one, based on the percentage of days in the year the taxpayer was present in the state, plus the years of residence over the three previous taxable years.
(ii) For each subsequent year, the numerator shall be reduced by one until the numerator reaches zero.
On pay day you’re not going to get a check, you’re going to get a bill.
Didn’t governor Newsom beat a recall with over 60% of the vote. I think the voters in California want this and the dims will all be re elected.
Exactly. The voters of California consistently vote for bad government, and they consistently get what they vote for. I feel no pity at all for them.
France tried a wealth tax a few years back. It lasted about 3 years. After the wealthy people started to leave they had a change of heart.
How about Texas and Florida giving the refugees from California a tax break to move in. I can hear the giant sucking sound now.
Better. TX + FL can become tax sanctuary states. Sane Free states can refuse to enforce frivolous CA claims against its residents.
Even more CA assets will POUR into TX + FL
The American concept has been so corrupted by the communists (liberals, progressives, socialists, democrats, RINOs, AINOs) in California, two democrats and no republicans run for office.
Do Americans know that democrats run against democrats, and republicans are non-entities in California?
To wit,
Kamala Harris (D) vs. Loretta Sanchez (D)
2016 United States Senate election in California
Candidate Kamala Harris Loretta Sanchez
Party Democratic Democratic
Popular vote 7,542,753 4,701,417
Percentage 61.6% 38.4%
Format malfunction.
These stories are a bit misleading.
Note: I’m not defending the silly state of Kalifornia… but wanting to set the records some what ‘straighter’ …
The issue is that there are wealthy Californians who have assets that have appreciated but are not liquid. So its more difficult to get them to pay the wealth tax.
So they sigh a note that when they liquidate these assets they will settle their balance with the state.
So the first issue is the wealth tax.
The second issue where people get hung up on is the fact that you can defer your payment until you sell the asset, even if you leave the state.
That’s the issue.
The headlines make it sound like that if you lived in California and left, they can come after you for an ‘exit tax’ which is BS.
Turley is right about the fact that this will pause anyone from coming in to California, and those w homes trying to sell… ha ha…
-G
The second issue where people get hung up on is the fact that you can defer your payment until you sell the asset, even if you leave the state.
That’s simple capital gains tax. I’m guessing there is more here than capital gains tax.
My bad. It is not simple capital gains.It’s a tax on assets, ON TOP of capital gains.
I got a hard time caring. The People are getting exactly what the voted for…Good and hard.
The democratic/dictatorial duality.
My first thought is, if I left the state (which I did leave that hell hole over ten years ago), how would they enforce this?
A typical Turley piece; short on details, long on rhetoric: “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.” What does this mean, exactly–that people who physically no longer reside in California, but still have real or personal assets in the state get taxed on those assets? How or why is this unfair? For instance, if you own rental property, should you be exempt from taxation if you decide to move to another state? Of course, today’s little trash piece is just another attack on Democrats, California and Elizabeth Warren.
Turley also chose to ignore another big political story: that Mike Pence had classified documents squirreled away in his Indiana home, found in an unsecure location. What about that?
NUTCHACHACHA,
May we rid ourselves of your pesky assistance, affirmative action, etc., yet or do you still require their entitlements and benefits to function in this competitive society?
Gigi – you haven’t been reading Turley closely. He wrote in one of his blogs the other day, that he believes other Presidents (and he may have said other Vice-Presidents) have mishandled classified documents in the past. When there are tens of thousands of classified documents in Washington, it is not surprising that even careful politicians can lose track of them. Legal risk arises only when there is gross negligence of handling classified documents. Pence’s case differs from Biden’s in several respects: Biden was clearly grossly negligent in handling his documents, whereas that is not clear as to Pence; and Pence’s documents were not accidentally found in a semi-public location by WH counsel (as the story goes), but were found when Pence ordered a search of his home.
Edward: you are a true disciple. You “know”, without citing any facts, that “Biden was CLEARLY grossly negligent in handling his documents”, while proclaiming that Pence wasn’t, despite admitting it’s “not clear” how the classified documents were located in his home. What’s clear is that you believe whatever your alt-right media tell you. Biden’s documents were in the PennBiden think tank–a private office that is not open to the public, and his home, which is well-protected by security. Pence’s were found in his Carmel, IN home–we don’t know how many cleaning people, landscapers, cooks, carpet cleaners, repairmen or others, including those posing as such, or even family members and visitors, might have had access to the papers. One big difference is that in an ABC News interview, Pence categorically denied having possession of ANY classified documents, all while dumping on Biden for being negligent. Pence either lied or was “grossly negligent” when he categorically denied having the documents. We now know he not only was wrong, but probably knew it when he denied having any–why else would there have been a search conducted at his home if there was no chance he had held onto classified documents? Also, Pence’s documents are of much more recent vintage than Biden’s–some of which date back to when he was VP–14 years ago, so they may no longer be classified. Has Pence apologized? Where’s the Republican demand for a Special Counsel, like they demanded for Biden? Crickets.
Gigi – As Biden would say: “C’mon man.”
As to the Penn Biden Center, check out https://www.breitbart.com/politics/2023/01/25/report-penn-biden-center-june-event-allowed-attendees-unmonitored-building-access/ (“There were no posted security officials at the Penn Biden Center during the June conference—just regular Penn staffers—and attendees were able to walk around the center unmonitored and make use of unused rooms for phone calls and other private work during the conference,” the report stated. . . . The Penn Biden Center has not complied with congressional inquiries into how classified documents were stored at the facility.”)
As to security in the Delaware sometime-residence, check out the entity known as “Hunter Biden.”
CALIFOREIGNERS
They came for the “free stuff” and they stole the whole enchilada?
No, no! They were GIFTED that haute cuisine!
Americans went from being builders of great strength and resolve to incorrigibly naive, bleeding-heart fools being sheared of everything of any worth or value.
_____________________________________________________________________________________________________________________________
“San Francisco reparations committee proposes a $5 million payment to each Black resident”
CNN — A committee in San Francisco has released an extensive proposal for reparations that includes a one-time payment of $5 million to each eligible Black resident.
______________________________________________________________________________________________________________________________________
CNN references each proposed recipient of reparations as “Black resident,” distinctly not American.
Reparations are owed by African tribal leaders, the creators and initial perpetrators of British colonial slavery, which was facilitated by Arab slave-trading middlemen.
Washington’s legislature has a similar bill: see https://app.leg.wa.gov/billsummary?BillNumber=1473&Year=2023&Initiative=False
California suffered this proposal about 2 decades ago.
Insanity is not a new concept or ideology in California.
A progressive, forward-looking tax code.
Jonathan: Speaking of billionaires, or those who claim they are, Donald Trump is in the news. I have long maintained Trump acts like a Mafia Don. He intimidates witnesses and claims “flipping” is being used by federal prosecutors to get at him. So I was not surprised when Trump had his photo taken with former mob boss Joel Merlino, at Trump’s golf club in South Florida earlier this month. Merlino was convicted on racketeering charges in 2001. He spent a decade in prison. Trump says he knows nothing about Merino’s storied criminal career but they share an affinity for golf and an aversion to cooperating witnesses who “flip” to help prosecutors. When Michael Cohen began cooperating with the government Trump said: “It’s called flipping and it almost ought to be illegal”. Merlino was quoted as saying he agreed with Trump. I think Trump is a perfect example of how we should judge a person by the company they keep.
Anonymous – you outdo yourself. Trump has a photo taken with a guest at his golf club and he somehow absorbs the sins of the guest. Is this a standard you would as apply to Epstein’s guests to his island? As to your assertion that the dastardly Trump intimidates witnesses, would you care to provide evidence for this serious charge?
Edwardmahl: You go one thing right. Every one of my comments outdoes the last. That’s my contribution to this blog. And, yes, you are judged by the company you keep. That includes Bill Clinton, Jimmy Buffet, Donald Trump, Prince Andrew and others who visited Epstein island–affectionally called “Pedophile Island” by the locals. When Epstein was finally arrested for the sex trafficking of minors all the above couldn’t be found for a statement. Do you see any of these public personalities visiting Ghislaine Maxwell in prison? As to witness tampering by Trump look at the Jan. 6 Committee final report. He and others in his circle tried to intimidate a number of witnesses. PS: My laptop was comprised so I had to have everything reinstated–including this account. I forgot to put in my real name on my first post.
Did you say, “…acts like a Mafia Don…”?
Professor Turkey said the world billionaire. Hey, Trump is a billionaire! Therefore . . . Trump Trump Trump Trump Trump Trump Trump Trump Trump . . .
TDS patients are awfully transparent these days.
Please. Stop talking about Trump. He is an ex president that was far better than Carter. I would like All of you, opponents and supporters of Trump;. Are you better off today than you were before Biden became president ? Is Our nation better off now than it was under Trump ?? Now give me details to back up your position. No name calling.
Solvermn,
I was waayyy off better when Trump was president.
So was the nation.
The Biden admin is playing WWIII/nuclear war chicken.
The The Bulletin of the Atomic Scientists moved up the Doomsday Clock from 100 seconds to Midnight, to 90 seconds to Midnight.
This is the idiocy of the Dems and those that vote Dem
Dems run for office promise to make the rich pay their “fair share”. A politician using such language should just be tarred and feathered and sent out of town. With deference to Barbi, math is not hard. Macro economics are not hard. At a very base level, people respond to incentives. A truism Dems will not abide. At some point, the govt will set a tax at a level that people say NO. I am no longer going to produce. So instead of the govt taking half of the income, the govt will take ALL of Zero.
“Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.
This is known as “bad luck.”
Robert Heinlein.
I saw this coming 30 years ago and left Mexifornia then. Most of my family has moved on also. Gavin Newsom is the worst of the last few miscreants to Govern the state, but the citizens have allowed it.
Jonathan: I love the Eagles song but it is a poor analogy to California’s proposed wealth tax. And I am curious. You are probably not a billionaire. Neither am I and I suspect neither are your close followers on this blog. So why your interest? I think it’s because Rupert Murdock is a billionaire, owns the NY Post and it published an article today attacking the California proposal. And this prompted your interest in how California proposes to tax the accumulated wealth of your employer. Thus this column. Pavlov’s dog has nothing on you!
Now Murdock has vast real estate holdings all over the world. In 2013 he purchased Moraga Vineyards and Estate, a 13 acre winery and mansion in Bel Air, Calif., for $28.8 million. His winery sells Bordeaux-style red for $175 and sauvignon blanc for $115. Murdock’s son, Lachlan, owns a $150 million nearby estate. In fact, Lachlan owns the most expensive property in LA. So, naturally, the prosed California wealth tax, strikes fear in the Murdock family. That’s one reason I support Assemblyman Lee’s proposal. And if I were Don Henley, a big donor to the Democrats, I would tell you to stop playing his most famous song. It’s also a insult to the memory of Glen Frey!
And Glen Frey was flying so high with the Eagles that he required a nose replacement from cocaine abuse before his untimely demise; he may not have even been able to cognitively process the nuances between “freedom and self-reliance” and “from each according to his ability, to each according to his need.”
I think somebody needs a nap!
You are probably not a billionaire. Neither am I and I suspect neither are your close followers on this blog.
Because this kind of taxation scheme doesn’t live within its means. As the piece points out, the actual floor of this wealth tax is $50million – right now. But there aren’t enough people rich at that level in California to cover the state’s shortfall, so how long before it gets dropped to $20million? And then $10million? You don’t have to be super-rich in California to have $10million in assets. If my husband and I had bought a house there after college, and our earnings there had tracked with what we’ve made since moving away from CA, we’d be worth about that now.
It’s not just a wealth tax on California real estate or other California-based assets, according to the professor’s piece – it’s on your wealth, wherever in the world the assets that comprise it are held.
And you get that this is an annual assessment against a person’s assets, right? Not a one-time thing? Not based on gains but based on the current worth of everything you own? If you bought an asset for $60million, intending to hold that asset and hope that it appreciates, but in the short term it depreciates or stays level, you aren’t paying tax on money you have made by investing in that asset – you’re paying a portion AGAIN for the same asset that you already bought. Every year. Forever.
Add to the above the fact that this is going to wreck a bunch of other states too, as has already been happening. Rich Californians are going to flee while they can and inflate real estate and other prices in the places they run to, as well as bringing their innumerate ideas about economic policy with them. They don’t tend to change their politics when they leave; they think California is right, it’s just that they – regretfully – have to remove themselves from the equation because California just made the wealth threshold a leetle bit lower than it should have, dontcha know.
Anonymous – “Why the interest?” Possibly because a wealth tax opens the door to the government destroying the lives of almost the entire population of the country. An overstatement? No, when we begin to work in our late teens, we dedicate our lives to accumulating property: a small house and a cheap car; then a larger house with a more expensive car; then, if we are lucky, stocks and bond, etc. “Wealth” is everything we have spent our lives to accumulate. If the government can establish the right to take that accumulation, then the fruit of our labours will be lost, and the economic purpose of our lives nullified. This is not ordinary political greed, but true anti-human evil of the kind seen in Russia, Germany and China in the 20th centruy. Of course, you will say, “it is only the rich who will be skinned alive.” The definition of “rich” will be pushed down to reach anyone with more than a few thousand dollars in the bank. The Soviets kiiled millions of Ukranian peasants who were supposedly “rich” because they had wooden floors in their houses. A free country is possible only if property is considered sacrosant, an a-priori human right that precedes the claims of government itself.
“I think it’s because Rupert Murdock [sic] is a billionaire . . .”
Nice ad hominem.
Anonymous what you are saying sounds like short-sighted envy. Are you able to explain what you are trying to say?
Diehard Dems and diehard Repubs can and should agree that this proposed legislation wasn’t thought out. This proposal smacks of “We’re on our eighth martini and writing out some great ideas on the bar napkins.” Only the seriously hungover can walk into Sacramento’s capital and submit this proposal.
It’s a liberal tax scheme a la Medicare/Medicaid/Obamacares in the spirit of single/central/monopolistic solutions and shared responsibility through progressive prices.
nav2003 – But Sen. Elizabeth Warren has thought this out and preaches its merits to other Democrats in Washington D C. California is just a symptom of the disease.