California Democrats propose wealth tax that could follow people who move out of state
The tax will apply to every resident, regardless of whether they are in the state part-time or temporarily.
California Democrats have introduced a bill in the state legislature that would impose a tax on the state's highest earners that would include residents who live there part-time or have moved.
Assemblyman Alex Lee, a Democrat, introduced the bill last week. It seeks to impose a 1.5% tax on residents' worldwide net worth in excess of $1 billion, or $500 million for a married taxpayer filing separately, starting as early as 2024.
By 2026, residents with net worths above $50 million, or above $25 million for married taxpayers filing separately, will have a 1% annual wealth tax.
The tax will apply to every resident, regardless of whether they are in the state part-time or temporarily. It will also allow the state to pursue wealth taxes from former residents who built their wealth in California but moved.
Farm assets, bonds, works of art, offshore assets and pension funds would be subject to the worldwide wealth tax.
For those who move out of state and do not plan on returning, the wealth tax will be slowly decreased over several years "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," the bill states.
If a wealthy taxpayer does not have the money to pay the taxes, they are still required to eventually pay after making filings with the state's Franchise Tax Board.
The bill is a modified version of an earlier act that the California Assembly passed in 2020, but it failed in the Senate, Fox News reported. The newest legislation was co-authored by six assembly members and three senators.
"The working class has shouldered the tax burden for too long," Lee tweeted about the bill. "The ultra rich are paying little to nothing by hoarding their wealth through assets. Time to end that."