Home>Articles>CA Democrats Pushing First-in-the-Nation ‘Wealth Tax’ on State’s Billionaires

Assemblyman Rob Bonta. (Photo: Kevin Sanders for California Globe)

CA Democrats Pushing First-in-the-Nation ‘Wealth Tax’ on State’s Billionaires

‘We need the revenue’

By Katy Grimes, August 13, 2020 1:10 pm

Oakland Assemblyman Rob Bonta held a press conference Thursday announcing his legislation to tax the state’s wealthiest job creators and innovators – the 30,400 billionaires living and working in California. This first-in-the-nation net worth tax is estimated to generate $7.5 billion per year in new “revenues” to the state coffers.

However, the state already taxes the income that built that billionaire wealth. And California has the highest rates in the nation. Why should successful Californians pay additional taxes on wealth and income that’s already been taxed?

Bonta’s justification for another wealth income tax on top of the highest tax rates in the nation is a “crisis in inequity” he says was created by the coronavirus. “During this pandemic, California has taken a massive economic hit that threatens to devastate our schools, social services and virtually every sector of our economy,” Bonta said. “Families are suffering as millions of Californians have lost jobs, suffered pay cuts, or endured reduced work hours.”

But the coronavirus did not create “inequities” or the struggling families. California families have long-suffered under high taxes, business-killing regulations, high cost of living, unaffordable housing and high rents, and encroaching state and local government.

Bonta’s wealth tax proposal is also not a new proposal in California. In March 2019, Sen. Scott Wiener (D-San Francisco) announced he was authoring legislation to put a wealth estate tax on the California ballot in 2020 in order to create a new tax for wealthy Californians, California Globe reported. “Wiener claims this new wealth tax is needed to equalize President Donald Trump’s tax reform to what existed before the federal tax break was created. However, Wiener also says ‘SB 378 directs all collected estate taxes to a newly created special fund: the Children’s Wealth and Opportunity Building Fund.’” Wiener said his bill “directs estate tax proceeds toward programs and services that directly address and alleviate socio-economic inequality and build assets among people who have historically lacked them, including helping low income children build wealth through savings accounts.”

Billionaire Envy

“The California Wealth Tax would impose a tax on an extremely limited number of individuals (30,400 billionaires) who hold the highest levels of wealth,” Bonta said. “These are individuals who have successfully participated in California’s economy and gained tremendous wealth as a result. Requiring these well-resourced Californians to make a small additional contribution to keep our people working and prospering is the right thing to do.”

“We cannot let this moment pass,” Bonta said, calling his bill “a progressive approach.”

The Assemblyman said the revenue from the new wealth tax would be an “investment in schools,” go to to healthcare, unemployment claims, job creation and childcare. Except the new tax revenue would go directly in to the state’s General Fund; the bill’s language does not designate or mandate specific programs or areas of need where the money must be designated, making this just another “tax the wealthy” proposal.

California Globe attended Bonta’s press conference via Zoom video. Upon responding to the email conference request, we received a confirmation and were provided an email in which media could send in questions for prior approval. But that email was not to Assemblyman Bonta’s Capitol staff – the email address was to Lindsay Hopkins with the SEIU:

“Please submit any questions to: lhopkinsphelps@seiucal.org.”

California Globe sent in a question which was never provided to Assemblyman Bonta: “Why will the revenue generated from a wealth tax go to the general fund instead of designating it to the programs and areas of need discussed in the press conference?” we asked.

No answer. However several other questions were read by Hopkins for Assemblyman Bonta, and others were emailed to him, including hard-hitting questions like “Will this tax hurt start-ups?”

Bonta had several other Assembly members speak to the importance and necessity of the bill.

“Before the pandemic, Californians were hanging on by a thread,” said Assemblyman David Chiu (D-San Francisco). “That thread has been cut.”

“People are losing jobs and healthcare, while we are seeing wealthy individuals getting richer,” Chiu said. “And billionaires are getting richer. It’s time we finally address inequities. It’s time we focus on average Californians over the wealthy; it’s time we make our system fair.”

COVID-19 did not cause job loss, business closures and the loss of healthcare — the statewide lockdown order was issued by Gov. Gavin Newsom.

“California has been very good to some – it’s time they pay their fair share,” Assemblyman Miguel Santiago (D-Los Angeles) said. “We need the revenue.”

Assemblyman Ash Kalra (D-San Jose), who represents Silicon Valley, said “Silicon Valley is the Capitol of inequality.” He added, “The social contract is broken; billionaires need to fulfill that social contract.”

Also on the call was Jeff Freitas with the California Federation of Teachers labor union. Freitas said the state must invest more in education. “Billionaires increased during COVID,” Freitas said. “In March through June, California billionaires made $175 billion. This (tax) is a drop in the bucket compared to what wealth was created.”

“Those billionaires need to reinvest in our state,” he added.

“We need investments, not cuts,” Bonta said.”We need to put concrete ideas on the table; revenue enhancements are part of it.”

U.C. Berkeley economist Emmanuel Saez weighed in on the wealth tax proposal, saying “the rich are piling up wealth because of limited spending.” He also blamed the economic crisis and budget deficit “due to COVID,” and said the tax was necessary because federal bailout funding “is unlikely.”

The once-Golden State of opportunity and innovation already ranks 48th out of 50 states in the Tax Foundation’s 2020 State Business Tax Climate Index. California ranked 49th on individual income taxes; 45th in sales taxes; 25th in corporate taxes, 16th in property taxes; 22nd in Unemployment insurance taxes. This is notable because the “wealthy” are often small business owners, and nearly all billionaires are tied to business.

Right behind California are New York at 49th and New Jersey at 50th. the only thing keeping California at 48th is our property tax rate, mandated at 1-2% increases annually, thanks to Proposition 13, passed in 1978 by voters. But this too is in jeopardy as Proposition 15 will be on the November ballot seeking to split commercial properties out of Prop. 13 protections, reassess them and immediately tax them at high new rates.

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25 thoughts on “CA Democrats Pushing First-in-the-Nation ‘Wealth Tax’ on State’s Billionaires

  1. Absurd suggestion, as usual. I swear these knuckleheads just love to hear themselves spew nonsense. The billionaires will just leave the state.

    1. That’s exactly what will happen! They’ll just go to Texas or another state that doesn’t punish success. And not only will CA lose the revenue from their personal taxes, but probably tons of jobs and thus, their employees taxed incomes too. Our state’s leaders are complete idiots!

  2. It looks like “billionaire” is the new evil word added to the democrap’s vocabulary, along with “assault weapons”, “weapons of war”, and don’t forget their favorite evil word: “racism”!

  3. This is so typical of the way these so-called “progressives” operate: Create a huge mess for California residents, wealthy and otherwise, as the Dems have been doing for many many many years, and then, despite a mountain of evidence that their policies are completely responsible for the mess, don’t acknowledge their part at all, but instead pretend innocence and/or victimhood, blame others, cry poor, blah, blah, blah, blah, blah.

    Or better yet, exploit a problem like COVID through hyperbole and scare tactics until the populace is in such a state of panic they can’t think or see straight, then shut the state down physically and economically so no one can work or gather or do much else, after which, now that you, the ‘progressive’ politician, have a MONSTER of a revenue problem on your hands, go ahead and target the very people you hurt through your skullduggery and try to wring more tax money from them.

    Especially liked the details and specifics in this Katy Grimes article about how good reporters are shut down when they are trying to ask reasonable questions, the answers to which every sensible person in the state wants to know, by the way, and how the politicians and bureaucrats have become increasingly bald-faced about pulling this particular trick, including, amazingly, using union reps to do it; e.g., in this case Asm Rob Bonta’s SEIU henchwoman. But bad and shill reporters get to ask all the softball questions they want and run out the clock.

    These people continually lie and cheat and they just don’t care. Sociopaths have more conscience.

  4. Bonta and his colleagues have learned nothing from what has already happened to tax revenues in New York, Connecticut, Illinois, and New Jersey. Wealthy Californians are unlike most other Californians in that they can afford to leave the state and will (but not by using California High-Speed Rail). Increasingly, the California state tax burden will be suffered by the middle class, and then what?

  5. and yet the Democrats want to bring more of the world’s poor here….

    that is why poverty is never eliminated – we just keep importing it so the democrats can stay in power

  6. Maybe those billionaires will make sure that they live in one of their other estates outside of California long enough during the year so that they’re not considered California state residents? Dimwit Democrats are the party of division and destruction.

  7. This tax is much broader than a billionaire tax. It starts at $15 million. Most importantly, it opens the door to a wealth tax for everyone. People, please vote these idiots out of office – especially Bonta, Chiu, Gonzalez, & Santiago.

  8. California Companies Flee Business-Hostile State In Droves
    http://www.investors.com › Dec 17, 2018

    Why California Is In Trouble – 340,000 Public Employees With $100,000+
    Paychecks Cost Taxpayers $45 Billion- Forbes May 19, 2020

    How To Steal A Lot of Money From CalPERS, The Nation’s Largest Public Pension
    Forbes-May 24, 2017

    Biggest-ever CalPERS pension tops $400,000 per year
    http://www.sacbee.com- February 19, 2020

  9. California Companies Flee Business-Hostile State In Droves
    http://www.investors.com › Dec 17, 2018

    Why California Is In Trouble – 340,000 Public Employees With $100,000+
    Paychecks Cost Taxpayers $45 Billion- Forbes May 19, 2020

    How To Steal A Lot of Money From CalPERS, The Nation’s Largest Public Pension
    Forbes-May 24, 2017

    Biggest-ever CalPERS pension tops $400,000 per year
    http://www.sacbee.com- February 19, 2020

  10. Gee, more greed and trickery from democrats by calling out the rich as being the answer and yet the enemies of the California citizens. The left loves to give people someone to hate and blame when they really tweak their lives, but also letting them know “ we’ll get even by taking their money and punishing them for you !! “

    That gets the California citizen onboard with going after “ their “ money but NOT “ yours “. The thing is they’ll fight over a nickel in a dead man’s shoe. They just want the approval from the citizens so once they start going after “ your “ money they can say “ Well, you were ok with it … “

    In other words it’s your fault for trusting us, and to some degree that is true. They do this sort of thing over and over again because the voters fall for it. These people can never be trusted. They will look you in the eye and lie until they get what they want. As far as taxes and other people’s money, eventually they work their way down from billionaires and millionaires to going after anyone that has anything worth value.

    The longer newsom punishes California with his tyrannical shutdown the worse the recovery is going to be. He can reverse course but that would be admitting his phenomenal leadership failures that are already clear to the entire world. He has forced California into one serious and needless free-fall with no end in sight.

    What a moral and economic disaster. But then again that is what democrats are, among other things.

  11. CA does NOT have “30,400 billionaires.” Not even 400.

    This is a tax on anyone who has $30 MILLION net worth.

    Given that the CA wealthy are almost all liberals, I support the passage of this measure.

    Karma.

  12. You have a typo, you stated California’s “30,000 billionaires” there’s less than 3,000 billionaires on the entire planet let alone in California. I’m assuming you meant Millionaires.

    1. It’s not a typo – Assemblyman Bonta and every other Assembly member in the hearing repeatedly said 30,400 billionaires.
      We will be doing another article analyzing his bill and claims.
      Katy

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