Bay Area Assemblyman Proposes Tax On Ultra-Rich

March 16, 2021 16:00 pm · 36 comments

A state assemblymember from the Bay Area announced a proposed tax on the ultra-rich that he said would be decided by California voters in 2022 if the state Legislature approves putting it on the ballot.

Assemblyman Alex Lee, D-San Jose, joined other state legislators and advocates to announce the plan to impose a 1 percent annual tax on net household wealth of more than $50 million and an additional 0.5 percent on household wealth of more than $1 billion.

Two-thirds votes from both houses of the Legislature would be required to put it on the ballot in 2022, and a simple majority of the state’s voters would then be needed to approve it, according to Lee.

The plan mirrors national efforts by Sen. Elizabeth Warren, D-Massachusetts, and other members of Congress who earlier this month proposed the Ultra-Millionaire Tax, which would impose a 2 percent annual tax on the net worth of households and trusts above $50 million, with a 1 percent surtax on the net worth of those above $1 billion.

“We need sizable reinvestments to our community from those who aren’t paying their fair share,” Lee said at a briefing with fellow state Assemblymembers Lorena Gonzalez, D-San Diego, Miguel Santiago, D-Los Angeles, and Luz Rivas, D-Arleta, and advocates for the wealth tax, including the California Federation of Teachers.

Lee acknowledged that a previous wealth tax proposal, Assembly Bill 2088, by Assemblyman Rob Bonta, D-Oakland, and others failed in the Legislature last year, with critics saying it would impose taxes on people even years after they left the state.

The Bay Area Council, a regional business advocacy group, condemned Lee’s proposal in a statement Monday.

“Jobs and investors are already fleeing the state’s onerously high taxes, unaffordable housing, rampant homelessness and excessive regulations. Other states that smell California’s economic vulnerability are licking their chops at the sight of reckless legislation like this,” the Bay Area Council said.

remember March 16, 2021 at 4:22 PM

just more pandering from the dems to their base

who’s going to employ you when the rich investors stop investing in this state? oh ya, the government will give you a job, i forgot. LOL

Darwin March 16, 2021 at 9:11 PM

So true!
HP left California
Tesla has left California
Oracle has left California
Palantir has left California

Who’s going to fill their tax void to pay for all the social welfare programs?? It’s going to be the average person struggling to make a living. After all the homeless and illegals are more important. I wonder how many homeless were vaccinated in Martinez so far this week? Meanwhile the hard working American has to wait.

They left because of the high taxes. Wake up liberals. Who’s going to employ your parents so they can continue to support you?

Old Timer March 16, 2021 at 4:27 PM

This makes me laugh.This bill would have a better chance running through hell in a gasoline soaked diaper .Where did this clown come up with this one.The end result is going to be the middle class paying for this administration’s tax bill.

Bigjoker March 17, 2021 at 4:49 AM

Old timer, Thank you for making my day! that image of a bill running through hell in a gasoline soaked diaper really made me laugh!

To Do List March 16, 2021 at 4:34 PM

I am against it. That is not the relationship the citizens should have to the government with politically progressive bureaucrats deciding how much money we should have, or our religion, or our choice of political party. The government should work for us, and not us for the government. The “fairness” issue is baloney. “Fair” would be if everyone got the exact same tax bill to pay for the government the same way we are charged the same for an apple at Safeway.

Badge1104 March 16, 2021 at 4:38 PM

I’m surprised that I’m saying this, because I’ve always been against extra taxing. But I think people with more than 2 million should be tax extra. I also think these high salary high-tech individuals should pay an extra 10% income tax. Yeah maybe I’m bitter, yeah maybe I’m jealous, I know so many young couples in their twenties making a quarter million a year in the tech industry and they are spending like crazy living indulgent life. They’ve also fueled the crazy rise in rental prices. They just pay 10% extra income tax on everything over 100,000 a year per individual. Again I can’t believe that I’m saying this. But I don’t think these individuals would flee the state they love their liberal Haven they’ve created here too much.

Time to Go March 16, 2021 at 7:39 PM

Government needs to live within their means. California needs to stop spending money they don’t have. Everyone works for their money and should get to keep it. Perhaps you should be taxed at a higher rate so those poorer than you can have your money? Bet you would go back to your old way of thinking.

JRocks March 16, 2021 at 8:52 PM

@ Badger
I find it hard to believe that you usually don’t support higher taxes or bigger government. Filled with bitterness and envy, you sound exactly like a Socialist.

“The philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.”
W.Churchill

Anonymous March 17, 2021 at 10:36 AM

@Badge1104 Don’t be a hater because these young people put in the time to study CS and engineering and are now making bank. Oh, those young couples are making closer to $500K if they work at the tech giants like Facebook and Google. And that’s the starting pay.

I’d be more concerned with the Chinese nationals buying up any and all real estate in the state just to hold as an investment. I’d also worry more about Chinese nationals buying up small farms across the US in an effort to manipulate our food supply.

And those tech jobs are fleeting. It’s a constant cycle of layoffs, with no long-tern stability, major age discrimination, and pressure from foreign workers (mostly Indians) taking our jobs. Did you know 70% of US tech jobs are now held by foreign nationals here on work visas? The H-1B is destroying the hopes of American tech workers.

FPN March 16, 2021 at 4:50 PM

Oh so we get to vote on this. With the Dominion voting machine I wonder if it will pass. Of course it will.

Dr. Jellyfinger March 16, 2021 at 5:13 PM

Good! Chase those rich rascals right out of the state!

After that let’s reflect….. hmmmm… how many of us have been hired onto a good job by a poor person? Oh well.

WCreaker March 16, 2021 at 5:16 PM

The Supreme Court has ruled in the past that Wealth Taxes are unconstitutional although that applies to Federal taxation. Can’t wait for them to try and figure out how much wealth a person has when most of it is tied in offshore tax shelters in the Cayman Islands.

Badger Me March 16, 2021 at 5:55 PM

Why wear a mask to a Zoom meeting?

The Fearless Spectator March 16, 2021 at 6:00 PM

So the plan is to tax “after tax” dollars. Not especially constitutional but that doesn’t seem to matter much these days. They’ll probably have some sort of retroactive verbiage in there also. So to play it safe, rich people will leave prior to passage.
If this sort of legislation gets through, average citizen net worth in California will plummet, and a lot of jobs will go with it. Haven’t any of these guys ever taken high school economics?

Original G March 16, 2021 at 6:01 PM

Oh good, mess with the people who can most afford to move out of the state in a heartbeat. Arrogance and Hubris of CA politicians is near legendary..

Elon Musk for example built his mega batter plant in Nevada.
Sold his CA estates and moved to Texas. Would not be surprised if he builds a replacement factory in Texas and closes his Fremont plant.

Musk’s moves thus far will cost CA in excess of one billion dollars a year in taxes.

The rich who do stay in CA can lower their taxes by reducing how much money they make and it without affecting their lifestyle adversely.

“Milton Friedman Sets Liberal Straight On “Too Many Millionaires” ”
YouTube https://tinyurl.com/27ndzduc
What he explains most CA DEM politicians do not comprehend.

Here’s what DEM controlled NJ ended up doing,
“More than $70 billion in wealth left New Jersey between 2004 and 2008 as affluent residents moved elsewhere …” An they did not learn from that history as they are again going after the wealthy.

Just in 2018, DEM controlled New Jersey-New York area had 5,700 high-net-worth individuals with liquid assets of $1 million to $30 million leave.
CHum

Wage Slave March 16, 2021 at 7:00 PM

This is how these galaxy brains think. Right at the moment where covid has made it clear that people can largely work from anywhere, they plan on penalizing the one class of people with the most resources to leave, and whom already pay the biggest share of taxes in California. The obvious effect of this is going to be a tax flight from California by top earners, and a large drop in actual tax revenue. And guess who makes up the shortfall when it arrives? The rest of us suckers who can’t afford to leave will have our taxes raised.

You can’t evade the Laffer curve.

Chris March 16, 2021 at 6:16 PM

All businesses who created their wealth in this country should pay a straight 25% Federal income tax and a 5% State tax with NO write offs. If companies stick up their middle finger to this, ensure they will be forbidden to sell their products or services here.Why go after those entrepreneurs who had the vision and drive to create something that many enjoy and use? I’d much rather see Amazon pay this tax which paid ZERO federal taxes in 2019, than its creator Jeff Bezos.

Janus March 16, 2021 at 6:16 PM

Okay for the sake of argument.

If I was a person who was in the maximum California tax bracket of 12.3% and then I had to face an addition surtax of between .5 to 1% combined with my maximum Federal Tax rate of 37% can someone explain to me why in F’sake would I stay in California?

What happens to California’s tax base when the top. 5%, who pay 40% of the state’s tax revenues, leave for Nevada, Texas or Florida?

TTD March 16, 2021 at 9:45 PM

@Janus-I agree with you 100%. I am not sure how many Californians are aware that Ca imposes a “mental health” on those individuals that have a taxable income of a million or more at 1%.

TTD March 17, 2021 at 6:12 AM

I forgot the word tax. Ca imposes a “mental health” tax

Weedeater March 16, 2021 at 7:27 PM

Class Envy is another low point for the liberal left hypocrites. The only thing this kind of legislation would accomplish is to send jobs to other states. The wealthy already pay the vast majority of the taxes, they aren’t an ATM for politicians to take from. Liberalism is a plague upon our nation.

Shoulda Coulda March 16, 2021 at 7:36 PM

Does it surprise anyone that the California
Federation of Teachers is in favor of this tax.
What message are they sending students
about going out into the world and succeeding.
Work long hours, be innovative, be successful
and you will be penalized.

Time to Go March 16, 2021 at 7:52 PM

Will Mr. Lee, Nancy Pelosi, Adam Schiff, Gavin Newsom, Eric Swalwell, Diane Feinstein ever pay their fair share to California? Never! Let’s see all California politicians and their spouses State & Federal Tax returns before any new taxes are put to a ballot in California.

Cautiously Informed March 16, 2021 at 9:18 PM

Wow. Democrat politicians are truely pathetic panderers, and those that vote them into office are dolts. Anyone with half of working brain knows that something like that would never fly.

PO'd March 17, 2021 at 10:13 AM

It wouldn’t fly in most places, but in California, it could, and that is the issue. Tech would move to Phoenix or Austin in a nano second.
It shows how desperate the state will become in it’s never-ending search for revenue. There is no surplus here once the unpaid and unfunded retirement benefits are factored in. Don’t fall for that one.

Tsa March 16, 2021 at 9:22 PM

First, governments need to curtail their runaway spending and also stop treating taxpayers as their piggy bank! NO MORE TAXES PERIOD…

Antler March 16, 2021 at 11:08 PM

1% tax on anything over $50 MILLION?
I think I can handle that.

chuckie the troll March 17, 2021 at 6:30 AM

Is this where a former Californian says “tax me if you can”?

Will critical tax theory be taught in schools with the same damaging results as critical race theory? 190,000 more people moved out of the state than into it last year. People vote with their wallets and their feet and the results can’t be good news for the Franchise Tax Board.

idiots everywhere March 17, 2021 at 6:58 AM

This is likely to cost more than the revenue it brings in.
Let’s say I make $20 million a year. I pay CA tax of 13.4% on all of that income over $1million for an effective tax rate of approx. 13% on all my income. for a state tax bill of $2.6 million. My net worth is $250 million so I would owe $2 million on my wealth tax. If 1/2 the people in my situation decide to redomicile to a low/no tax state the total revenue would go down . Not to mention sales tax loss and possible decrease in ultra expensive property values, think Malibu, Montecito, Beverly Hills.

Commonsensenor March 17, 2021 at 7:24 AM

Best thing I’ve read recently is “Money is Mobile”

Under Trump, companies got tax breaks for being here. Economy and jobs took off like a rocket. Under Biden, they are being penalized (and even shut down) for doing business here.

A brain dead moron can figure out what the results are, and where we’re headed.

Great job people, you really told that big bad ole tweeting orange man din’t ya. He is really hurting right now because our country is doing so much better under Biden.

It’s okay now to say you were wrong, stupid, emotional and uninformed, manipulated, and lied to by the democratic party. Stand up, wake up, slap yourself, and #walkaway

Randy March 17, 2021 at 7:44 AM

… why don’t we just make official and call Calif a socialist state?

The Mamba March 17, 2021 at 7:53 AM

This is how they hook people, “Oh, we’re only going to go after the ultra rich!” and then the bar will fall every year. This is not a tax on income folks, it is a tax on WEALTH to make up for mismanagement of the state by these idiots. Do not be fooled. If we keep adding these taxes, the people that run and own the companies the rest of us work for will flee this state, and we’ll all go with them to follow the jobs.

chuckie the troll March 17, 2021 at 1:30 PM

The “Alternative Minimum Tax” is a perfect example of your “bar”.

Caskydiver March 17, 2021 at 10:01 AM

Taxing the wealth of the successful, especially after taxes (essentially double taxation), will drive those out of the state. Bad idea..drive out the only people left keeping this socialist state financially afloat.

JRocks March 17, 2021 at 2:27 PM

If you want more of something you subsidize it, if you want less of something you tax it. Look at what this state taxes and look at what they subsidize. The homeless and illegal alien population in California is growing at a faster rate than the legal tax paying citizen population. One day, like a drug addict, California will hit rock bottom.

chuckie the troll March 17, 2021 at 3:41 PM

Raise taxes on the poor and make them pay their fair share and turn them into conservatives at the same time. Kleptofornica has it asset backwards as usual.

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