California proposes another wealth tax...on non-Californians!

American Thinker ^ | 27 Jan, 2023 | Eric Utter

[MtnClimber]

California lawmakers are pushing legislation that would impose yet another new tax on the state's wealthiest residents — even if they've already moved to another part of the country. (You can run, but you can't hide!)

Assemblyman Alex Lee, a progressive Democrat (is there any other kind?), recently 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 next year.

Moreover, as soon as 2026, the threshold for being taxed would drop dramatically: those with a "worldwide net worth" exceeding $50 million would be hit with a 1% annual tax on wealth.

"Worldwide net worth," or wealth, extends far beyond annual income to include holdings such as farm assets, arts and other collectibles, stocks and hedge fund interest, and other assets.

The legislation just introduced includes measures that would allow the state to impose wealth taxes on residents even years after they leave the state and move to somewhere less repressive and tyrannical!

Remarkably, exit taxes aren't new in California. But this bill goes farther, including provisions to create contractual claims tied to the assets of well-to-do taxpayers who don't have the cash to pay their annual wealth tax bill because the majority of their assets aren't "liquid" and therefore aren't easily turned into cash. These claims 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.

Of course, this bill, if passed, will just further hasten the exodus of successful people out of the formerly Golden State.

[Myrddin]

My employer has a presence in every state and many countries. When we do work, we have a default "zip code" for the standard office location. When we leave our default location, we must track time work and record the zip code. The payroll processor tracks income earned in each zip code and aggregates state income tax owed on the amount earned in that state.

I live in Idaho and my "default" is my home office. Some years I have to visit the project office in San Diego and provide support to staff in Omaha, NE. The consequence is a W2 for Idaho, CA and Nebraska. I have to file federal tax and state for ID/CA/NE. The cost of purchasing the state specific TurboTax edition for each state and the filing fees often exceeds the refund of the taxes collected. It's a nuisance in time spend and money spent to keep the state tax entities at bay. Each state agreed to the arrangement with my employer. Sometimes they "win". Usually they don't.

[dfwgator]

[Robert357]

A question for a friend. Would setting up a Panamanian corporation to own the assets that are either “not titled” (art, stocks, gold, silver, etc.) or can be easily retitled (ships, airplanes, etc.) to an out of state location with an LLC in Grand Cayman, which in turn is controlled by an LLC in say Crete make it difficult for CA to impose its tax? How about doing a Clinton? You know where a “tax exempt foundation” you are a director in pays all you expenses?

I don't see how CA is going to actually get their hands on the money, let alone know who owns stuff.