Welcome To Hotel California: Lawmakers Move To Tax People Who Have Left The State
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!”
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.