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 further, 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.