How much does the California legislature "love" the wealthy?
So much so that it is preparing to wrap the state’s wealthy residents in the cold embrace of the tax code and deputize bounty hunters to go after the their assets.
The only option the politicians didn’t consider to extract more money was holding the children of the rich for ransom.
But the legislative session isn’t over yet.
As John Cox, writing for Fox News, described it, "The legislation empowers lawyers to utilize the state's False Claims Act, which provides a 'bounty' for these lawyers to scrutinize wealth statements and records.
"Imagine the gold rush of lawyers moving to California to go after high-net-worth individuals to try to collect this wealth tax."
The bill would also serve as the Full Employment Act for the state’s appraisers.
The motive for this desperation move is California’s looming budget deficit.
The deficit, depending on which expert you believe, is between $38 and $68 billion.
Unlike Uncle Sam, California can’t print money to make up the difference between tax revenue and spending. The budget must balance.
That means the choice is between the unthinkable: reducing spending.
Or raising taxes and that means targeting the rich.
California gets half of its tax revenue from the top one percent of taxpayers, which is why they are the target of the new taxing proposal.
The first revenue generator is a wealth tax which "is a sweeping measure, encompassing both full–time and part–time residents of California.
"Levying a 1.5 percent excise tax on worldwide net worth exceeding $1 billion."
If the plan passes, it means part–time residents of the state would suffer from an excise tax on all their wealth.
Billionaires contemplating visiting California would be wise to hire a coyote to get them across the border instead of a travel agent.
The excise tax is where the net worth vigilantes come into play.
They would get a bounty on any assets they find that the state hasn’t already taxed.
By 2026 the floor where the excise tax kicks in will be reduced from $1 billion to any nest egg that exceeds $50 million. That should inspire quite a few Hollywood types to consider the advantages of red state living.
And the new excise tax isn’t the only gouging.
"California's top tax rate on wage income rises to 14.4%, up from 13.3%.
Furthermore, a new law eliminates the $145,600 wage ceiling on a state employee tax of 1.1%, further complicating the financial landscape for businesses and workers alike."
What seems to escape Sacramento’s tax bandits is the fact the wealthy can afford to move. After all, even a dairy cow will start to kick if there is too much jerking on the udder.
We’ve written here about the exodus from California of middle-class taxpayers.
If this confiscatory tax bill passes, we predict there won’t a shortage of rental truck-vans for one-way trips out of the formerly Golden State.
There will be a shortage of executive jets.
(A related article may be found here.)
Michael Reagan, the eldest son of President Reagan, is a Newsmax TV analyst. A syndicated columnist and author, he chairs The Reagan Legacy Foundation. Michael is an in-demand speaker with Premiere speaker's bureau. Read Michael Reagan's Reports — More Here.
Michael R. Shannon is a commentator, researcher for the League of American Voters, and an award-winning political and advertising consultant with nationwide and international experience. He is author of "Conservative Christian's Guidebook for Living in Secular Times (Now With Added Humor!)" Read Michael Shannon's Reports — More Here.