California Legislators, Labor Unions Want to Tax State Ex-Residents
Article from For Liberty by Norm Leahy.
According to the Los Angeles Times’ Jon Healey, the proposal:
…would apply a 0.4% tax to “all worldwide property,” excluding real estate owned directly, exempting the first $30 million (or $15 million for married taxpayers filing separately). And in addition to listing specific asset types that would be taxed, adds the category “other assets.”
But that’s just the beginning:
…the bill would not only tax whole classes of things that had previously gone untaxed, it would dun nonresidents who are outside the reach of the state’s income and business taxes. That’s because the tax would also be imposed on former residents who left within the past decade, presumably to catch those who fled the state’s income tax rates, which already are the highest in the country.
It also would apply the highest wealth-tax rate to anyone who’d spent a decade or more in California, a bizarre choice that would only increase the incentive for longtime residents to move out.
Undoubtedly, those who left the Golden State a decade ago would be very surprised to get a tax bill in the mail. Lawsuits would follow. As Healey writes, “the simplest way to avoid the new California tax would be to leave the state and then challenge California’s authority to tax nonresidents for assets moved elsewhere.”
The bill’s sponsors say such an extraordinary tax is necessary “to keep our people working and support our most vulnerable.”
The sponsors estimate the tax would raise $7.5 billion per year (assuming full compliance). The state currently faces a $54 billion budget deficit.