Assemblyman Rob Bonta (D-Oakland) made an appearance on “Cavuto: Coast to Coast” Friday to discuss his Wealth Tax proposal. Bonta told Cavuto the tax “affects about 0.15% of the California population — not the top 10%, not the top 1%, the top .15%, about 30,000 people.”
California Globe reported Bonta held a Zoom press conference Thursday announcing his legislation to tax the state’s wealthiest job creators and innovators – he claimed the “30,400 billionaires” living and working in California. (According to CNBC, there are only 630 billionaires in the entire United States.)
Bonta’s press conference was moderated by SEIU California, and not by his Capitol staff.
“The California Wealth Tax (AB 2088 as amended) would apply a 0.4% tax on the portion of a taxpayer’s net worth that exceeds $30 million. (approximately 30,400 people),” Bonta’s website says.
Bonta blames coronavirus for creating “inequality” in California, and not previous legislation and policies. “Families are hurting right now. COVID-19 has only made matters worse,” Bonta said. “In times of crisis, all Californians must step up and contribute their fair share. Asking these well-resourced Californians to give a little more to keep our people working and support our most vulnerable is the right thing to do.”
This first-in-the-nation net worth tax is estimated to generate $7.5 billion per year in new “revenues” to the state coffers.
California has the highest tax rates in the nation. Bonta and Democrats want to force successful Californians to pay additional taxes on wealth and income that’s already been taxed.
‘Excessive Wealth’
In the new bill is an introduction statement that the wealth tax is “for the benefit of accumulating excessive wealth in this state,” Globe contributor Chris Micheli reported.
Knowing about the huge outbound migration from California, Cavuto asked what would happen to wealthy people who move out of state. Bonta said tax “avoidance” would not be allowed as California would tax them for the next ten years, despite what state they live in. Bonta said that because they accrued the wealth in California, the state can continue to legally tax it.
“Tax avoidance,” with the primary purpose of reducing the valuation of a taxpayer’s worldwide net worth is required to be disregarded. “The bill authorizes the Franchise Tax Board to adopt regulations necessary to carry out these new statutory provisions including the valuation of certain assets that are not publicly traded,” Micheli said.
“AB 3088 requires the FTB to adopt regulation designed to prevent the avoidance or evasion of the wealth tax.”
Conversely, a billionaire who moves to California but acquired their wealth in another state, will still have to pay the proposed wealth tax for ten years.
“In California, we’ve had taxes on millionaires in the past. We raised taxes in 2012 by 3% — and the number of millionaires and billionaires in California has grown,” Bonta said. “We have 25% of the nation’s billionaires, 17% of the millionaires, those numbers are up and we’ve grown to be the fifth-largest economy in the world. So, while worthy of consideration it has not panned out.”
“Worldwide net worth under this bill would be calculated in the manner set for calculation of the federal estate tax pursuant to Chapter 11 of Subtitle B of the Internal Revenue Code (IRC) in effect on June 15, 2020,” Micheli said. “The estate tax begins at Section 2011 of the IRC. Worldwide net worth is deemed to be the value of all worldwide property owned by the taxpayer on December 31 of each year.”
“In addition, any transaction with a primary purpose of reducing the valuation of a taxpayer’s worldwide net worth is required to be disregarded. The bill authorizes the Franchise Tax Board (FTB) to adopt regulations necessary to carry out these new statutory provisions including the valuation of certain assets that are not publicly traded.”
Why would any wealthy individual move to California? Bonta said people will always move into the state because, “It’s California.”
Former California Gov. Jerry Brown used to say wealthy people stay in California and even move to the state for the beautiful weather, despite the high cost of living and high taxes.
Over the weekend, Politico reported that Gov. Gavin Newsom appeared tepid on the tax: “I want to see where things go over the next couple of months,” Newsom said, including “what happens if this passes, what happens if this doesn’t pass?” Then he cautioned that a wealth tax, championed on the national level by the First Partner’s preferred presidential candidate, is a “national construct” that on the state level could affect “your ability to retain and attract talent, individuals, companies, and your competitiveness.”
AB 2088 is co-sponsored by the California Federation of Teachers, SEIU California, and the California Teachers Association.
View Comments (169)
No wonder this mega-majority Dem legislature has been so on-fire for decriminalization efforts and freeing all the felons: They are protecting themselves! Crooked remorseless thieves that they are, they would be prosecuted and convicted and in prison now but for the lawlessness they themselves have promoted over the years.
Welcome to The Hotel California:
Last thing I remember
I was running for the door
I had to find the passage back
To the place I was before
"Relax", said the night man
"We are programmed to receive
You can check out any time you like
But you can never leave"
We haven't had that spirit here since 1969. Satan's president appointed in LA.
Whaaaaat are you smoking?
Not enough to stay there.
Clearly you do not know the Eagles song....
It wasn’t the coronavirus that created the inequality, it was the politicians acting like fools and locking down the economy that seems to have about a .00767 mortality rate according to numbers from san Quintin prison and that most people don’t even have symptoms.
Careless spending and harsh regulation. Calif. Dem super majority....power corrupts! Absolute power corrupts absolutely as a current event!
Ha! I did leave in 2912 and have not set foot back in the state.
I’ve been predicting this would happen in states with large unfounded pension debts - that is, attempting to impose a tax on former residents who have left the state. I thought it would first happen in Illinois, but California has beat them to it. It should lead to a big legal fight as the tax probably can’t be imposed retroactively. Those who have accumulated wealth in California had no reason to anticipate an ex post facto tax, so they had no opportunity to leave the state before accumulating their wealth.
????????????
Gteat analogy!
Good luck with that California,..you've just incentivized the rich to get the hell out ASAP and you've secured your wealthy investor repellent for the future. Not to worry, the rich have their lawyers, and they're damn good, you'll be chasing ghosts from here to eternity before you see a dime.
Doesn't this violate the U.S. Constitution? I don't think the Constitution allows one state to tax the residents of another state.
I was an Army wife for 22 years. In 1980, I had my meager teacher wages taxed by: Massachusetts, the state my husband and I were from; Oklahoma, the state where I owrked for a few months, and North Carolina, where we movèd for my husband's assignment after his Officer Advanced Course in Oklahoma....THREE STATES tàxed my wages!!,
You should thank your lucky stars you don't work construction, I have payed 9 different states in 1 year.
That will make you a conservative real quick!!
You worked in those states. California is trying to tax people who move out of the state and no longer work in it for ten years.
It does leave one to wonder how they plan to enforce their law if a citizen moves to a more civilized state. If the new state decides to help California by collecting the tax and the citizen moves yet again, what then?
This should be good...
We can only hope that California requests extradition back to Cali.
These people are the sickness that is Cali. I don’t want them escaping and screwing up the rest of the country...
Perhaps congress would fund a wall up the Cali border to keep them in so the rest of the country isn’t infected with the Cali pandemic like Austin TX for instance.
Article I, Section 10 would seem to be pretty clear on that matter. Perhaps at one time, Article IV, Section 2 might have been interpreted as granting states a claim to escaped persons' possessions and services, but that clause was repealed by the 13th Amendment.
You must pay income tax on income earned in another state. I don't think they can get away with this without the courts rejecting it. Maybe a Democrat Congress will feel sorry for them and implement it. They certainly have Congressmen and Senators on board with taxing "excessive wealth."
They have *already* paid income tax on that income. Now the state wants to levy another tax, on their total assets. Sorry, bye-eeee.
By the way, it's not "first in the nation." Florida was doing this around the millennium (they since repealed it) because retirees tended to have lot of wealth but negligible income.
And it's not "California's money," you communist totalitarians -- it belongs to the citizens who earned it.
Why yes it is! California is in “failing restaurant” mode. Decrease the size of portions, use inferior ingredients and raise prices. The liberals always think someone has more money they can take
Stupid is as stupid does....who cares! Stay in CA and pay the stupid people you elected.
Some issues they would run into include: ex post facto laws (unconstitutional for federal and state, specifically as it relates to a "wholly new tax" which the payer at the time of transaction, in this case, simply having wealth, would have reasonably expected to have been subject to taxation), proving that the wealth was "Californian Wealth", conflict with interstate commerce (illegal restrictions on the transfer of ones own wealth across state borders), and then, of course, actually enforcing the law. Since the U.S. expects expats to pay taxes (FATCA) California might try to argue they are just doing the same for expats of California. However, domestic jurisdiction of states interfering with citizens of another state, e.g. a businessman transfers all his previously taxed wealth to another state, registers as a citizen this state, and severs all ties with California, is extremely limited compared to U.S./foreign relationships. State tax auditors go to great lengths to prevent people from faking residency in other states to ensure they pay "their fair share" but there is no precedent I can find where a person has legitimately cut ties with a state, and then a law is passed to tax citizens (and recently former citizens) which attempts to essentially rob the wealth of a citizen of another state. Essentially, this would imply that no wealth accumulated by a person is ever their wealth, but rather it belongs to the state and the state "allows" the person to keep a certain amount. Property taxes exist in this same status, however, property taxes or use taxes are usually directly related to either residency (a piece of land and improvements exist in a state, which cannot be removed) or to government registration (a car is titled and registered in a state). This would be like California attempting to have you register a license to have wealth, and tax it whether you park it in Nevada or California; and then if you decided to leave California and "register" your wealth in another state, so to speak, they continue to claim that the wealth is "titled" in California and they will not let you take it with you unless it is taxed. There is no legal framework for such actions by a state, and when people flee California, the state will have to sue expats in federal court to attempt to steal their money. This will have to be dealt with either by federal law or by the Supreme Court.
Shemp - thank you for your excellent summary. I would like to look at this further. Any suggestions on books or online resources? I'm not a lawyer...
You worked in those states. California is trying to tax people who move out of the state and no longer work in it for ten years. They have paid the taxes for their businesses, wages and property. This is robbery.
You are correct. The US Supreme Court has already decided cases against states attempting to tax non-residents.
Any States where the looters of burning down businesses now the state wants to tax these businesses that they're refusing to protect. Insurance companies will not pay out if there is no please report. I just saw a video where this girl was complaining because the Boost Mobile store where there with AK47 to protect their store and how dare they cause she says they're willing to kill her to protect their cheap stuff and she was going to the police to complain because she says her cousin is a homicide cop in Chicago. I wonder F after he loses his job because they D fund the Police F she will invite him over for dinner after costing him his job. It's about the same thing for Amazon donating millions of dollars to black lives matter to have their stores looted in their him please harassed,Being told to move out of their houses and turn them over to the looters. This whole thing is falling in upon itself. In South Dakota the never close down.
Dude, you have to proofread. This is nonsense.
Raul...my thoughts exactly. There was some fun in trying to imagine the word or thought they were trying to convey and realizing their world is limited to a smart phone / small key pad.. Class participation trophy education vs being taught how to write a complete sentence.
If they get out now they can say the law is an ex post facto law directed at them for behavior which was legal at the time they left.
They've already been taxing the rest of the country with the federal aid they receive, so nothing new about taxing people in other states.
It really is THEFT and nothing else. Democrats govern and they pander so much, offering "free" stuff that they don't have the budget to cover, so they are always looking for a new way to take additional money that IS NOT THEIRS.
It's the old "Covet Thy Neighbor's Goods".
It's no wonder so many on the Left are hostile to religion.
and NO! I AM NOT A ROBOT!
I've lived in California since 1980 and am getting ready to leave and take my money with me. Good luck illegal aliens and welfare groids.
I am a very rich conservative low end billionaire. You wrote welfare groids. People are always hating on blacks. Did you know that Asians in California receive the largest amount of welfare after the Hispanics? Blacks are basically non existent in California. The blacks left California many years ago. Percentage wise, Pacific Islanders have more people on welfare in California than blacks. There can be an explosion on the planet Mars and blacks will be blamed. The major damage to America has nothing to do with blacks. Blacks are basically killing each other in inner city America, but drugs coming from Mexico and Asia kills all Americans. Jesus is Lord. Peace.
I see blacks all over in California. You are wrong. Mexicans EVERYWHERE, but a heck of a lot of blacks too.
wherever you move to. be sure you don't vote democrat
Imagine this for one moment.....A Californian who moves and settles in another state and DOESN'T vote Democrat!!! Too good to be true? Hate to tell ya straight up, but there are PLENTY of Californian's that DON"T vote Demon-crat and are....wait for it.... ARE CONSERVATIVE TOO!
There are more conservatives in CA than in any other state.
Why would anyone live there - the liberals ruined Cali long ago. Next up, NYC.
)It's such a shame. I live in San Antonio, TX and I would LOVE to move for Northern California for about a year since I CANNOT stand the weather in Texas. Why does California, which is one of the PRETTIEST states in the Nation have SO MANY TROUBLES! It totally makes me sad...Now I don't know what I want to do....SUCKS!!!
The damage is done with this article publicized on Drudge. If you are a billionaire, it would cost you a cool $30 million to move to California. This is $300 million out of Zuckerberg's hide.
we drink billionaire tears
we don't need billionaires. last time a billionaire saved me or anyone i know from financial ruin. never! last time i saved them, 2008! billionaire tears here! get your billionaire tears.
So if I, being from Florida, move to California, my concealed carry permit will be good for the next 10 years because, after all, I earned it out of state...
Me, I'd prefer they start with all the UC and CSU faculty and staff who reap Gray Davis' excessive taxpayer-funded pensions and promptly move to Nevada to avoid having to pay anything back.
Don't be surprised is thousands more move to beautiful and exciting Nevada. Zero state income tax and we don't mess around with crime or criminals. Ask OJ Simpson. Good luck dealing the California Franchise Tax Board. Who needs that in your life.
Sign the recall for Newsom
California Spent $25 Million Trying to Tax a Man $13 Million After He Moved Out of California
https://youtu.be/rfyPZdSBwBQ
https://twitter.com/bkwilless/status/1295469273532383232
Billionaire can live in any country they choose and not pay a cent in taxes to California.
I have not read this bill, but based on your post I suspect that lawyers are exempt from this proposed wealth tax.
10 years back my good friends left Cali for good and moved to Utah. They did this over a couple of years as they fixed their new place up and slowly moved items including vehicles.
Even though their show truck at been in Utah for over a year Cali said they still had to pay registration on it. I know for a fact it was in Utah because I helped load it on the trailer.
When they refused to pay Cali deducted it from their last state income return.
Sam Axe, glad to have your verification of what CA is doing to people who MOVE the heck out of here to another STATE, for crying out loud! It's just incredible that this long arm has not somehow been cut off in the meantime from being able to do this, although I'm sure there have been attempts?
Give Cali some payback...with today's cheap electronics it's not hard to build a timer controlled incendiary device.
Now just hide it on state forest land and set it to ignite in a couple of months...it will cost the state millions to fight the fires...help bankrupt them.
Sounds like a good way to go to jail. Or possibly hurt someone.
Supposed some California firefighters are killed in your fire?
That's why you always manage your W4 so you owe them money. That puts you more in charge of what you pay and they can't deduct it from a return.
Just relocating a vehicle isn't enough. The owner has to complete the process to notify the state that the vehicle has been registered in another state. A lot of people have had this problem - and won, by following the proper procedure.
CA played the same game with me and most of the CA ex-pats that I personally know living here in Nevada. Told them I was not a commercial driver (didn't have a chauffeur's license) and my tax attorney said I didn't have to register in both NV and CA (true fact but a bluff). CA official acknowledged that CA dual registration was optional.
You need to change vehicle registration to Utah. Then you would pay Utah reg. Rather than Cali reg.
2020: California's State legislature is promoting slavery / serfdom. In 1862, Abraham Lincoln ended slavery in USA with Proclamation 95. Since when is slavery or serfdom allowed to be promoted?
Did you ever hear of lifelong alimony? That is a real thing in ohio. I just heard about it last month. That is indentured servitude as well.
slavery and serfdom by the 1% (top tenth of 1%) is no less alluring! billionaire tears! come get your billionaire tears!
Bill Clinton got people to believe he wouldn't tax anyone below $250,000. Turned into $30,000 the day his taxes were implemented. Obama PROMISED everyone $2,500 off their medical insurance. How many people trust a promise to keep taxes only on the "rich"?
The other states where rich folks might move to and which have their own income tax might take issue with CA taxing their new residents.
leap to the defense of tax evaders? sounds like a republican plan to me!
Tax avoidance isn't tax evasion. Leaving the state, legitimately, is tax avoidance. California has zero basis to tax someone who leaves the state. Zero. They have no way to enforce the law either. This idea is crazy and desperate.
There's a difference between wealth tax and income tax.
BTW, nice article (as usual!), Katy. Appreciate the details not in other reports. Thanks!
I wonder if this law might be challenged as an infringement upon the right to interstate travel, using the same rationale as in Shapiro v. Thompson, which struck down residency requirements for those who travel to states to take advantage of their welfare benefits.
Roberts will vote for it!
The message is to get out before they pass the tax.
I wonder if Nancy Pelosi will leave?
Or Tom Steyer, come to think of it.
Where will Nancy be in a decade? Her grandchildren will move.
Dead, I hope.
“'In California, we’ve had taxes on millionaires in the past. We raised taxes in 2012 by 3% — and the number of millionaires and billionaires in California has grown,” Bonta said.'"
It sounds like this guy doesn't even understand the difference between *income* and *net worth*. (?)
Loudest sentence in the related San Francisco Chronicle article (emphasis added):
"He admitted that the **union-sponsored** bill…"
https://www.sfchronicle.com/business/networth/article/California-lawmakers-propose-a-15482011.php
Public employee unions must be abolished. They are destroying this state.
No it's not the public employee unions that's the problem. California wastes 30 billion with a B on illegals annually. That's the real problem!
“AB 2088 is co-sponsored by the California Federation of Teachers, SEIU California, and the California Teachers Association.”~Katy Grimes
Ya know it looks like collusion to me! These unions run the state, fund the politicians and steal your hard earned money, all the while indoctrinating your children!
Please wake up voters before it is too late!
Sounds like Rhode Island!!! Another democrat controlled nightmare state.
All great comments here!
What is glaring to me it is the abuse of power!
The great California weather is becoming less attractive to me, especially when there is a greater storm brewing all around us blowing out of Sacramento.
My heart breaks for this once great state. Watch where you walk!
I left California back in 1997 because of the awful things they were doing to the citizens. Nice to see that 23 years later they are still doing it. Remember back years ago California would tax you retirement regardless of where you moved. Once upon a time in a great land the liberals took over, no one has been happy or free since. Once upon a time the government worked for the people and derive their power from the people. Now the people work for the government and the government dictates to the people because the people don't have any power.