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California’s Wealth Tax Will Drive Out Remaining Rich Residents

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President Joe Biden greets California Gov. Gavin Newsom (D) as he arrives at Mather Airport on Air Force One Monday, September 13, 2021, in Mather, California, for a briefing on wildfires at the California Governor’s Office of Emergency Services. (Official White House Photo by Adam Schultz)

In what appears to be an effort to drive every last wealthy person out of the Golden State, California lawmakers are planning a wealth tax on residents. They even want to tax residents who have already left the state. Fox News’ Aaron Kliegman reports:

California lawmakers are pushing legislation that would impose a new tax on the state’s wealthiest residents — even if they’ve already moved to another part of the country.

Assemblyman Alex Lee, a progressive Democrat, last week introduced a bill in the California State Legislature that would impose an extra annual 1.5% tax on those with a “worldwide net worth” above $1 billion, starting as early as January 2024.

As early as 2026, the threshold for being taxed would drop: those with a worldwide net worth exceeding $50 million would be hit with a 1% annual tax on wealth, while billionaires would still be taxed 1.5%.

Worldwide wealth extends beyond annual income to include diverse holdings such as farm assets, arts and other collectibles, and stocks and hedge fund interest.
The legislation is a modified version of a wealth tax approved in the California Assembly in 2020, which the Democrat-led state Senate declined to pass.

The current version just introduced includes measures to allow California to impose wealth taxes on residents even years after they left the state and moved elsewhere.

Exit taxes aren’t new in California. But this bill also includes provisions to create contractual claims tied to the assets of a wealthy taxpayer who doesn’t have the cash to pay their annual wealth tax bill because most of their assets aren’t easily turned into cash. This claim would require the taxpayer to make annual filings with California’s Franchise Tax Board and eventually pay the wealth taxes owed, even if they’ve moved to another state.

Action Line: If your state’s only relationship with you is its intent to tax your income, purchases, wealth, and death, perhaps it’s time to look for a better America. Start your search for a better America with my 2022 Super States. And sign up here to be one of the first to receive my updated 2023 Super States list.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.
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