Don`t think I`ve ever seen a state try this approach to addressing budgetary shortfalls." Let`s see if we can force people of means and businesses to stay in this hell hole of a state we`ve created by making it too expensive to leave. For God`s sake, let`s don`t acknowledge why they want to leave in the first place." Shake....my.....head.
California " Exit Tax " ??
- Thread starter Tideflyer
- Start date
Sounds like a lyric to The Eagles song Hotel California, "You can checkout but you can never leave". 😄
Didn't pass - never even came to a vote. Wasn't supported by the governor or the majority in the legislature.
www.thecentersquare.com
California moderate Democrats shut down 'wealth tax' proposal
(The Center Square) – California moderate Democrats shut down proposal to create a “wealth tax” on unsold assets soon after governor Gavin Newsom announced his budget and declared he would
Makes for good Fox News talking points though
sort of like the stories about kids identifying as cats and getting litter boxes in schools
They love making up a straw boogey man to tear down.
I'm really curious now where @Tideflyer go this story. I'm sure wherever it was conveniently left out that the proposed bill was DOA.
Not sure we`re talking about the same thing? From a sanity standpoint, though, I hope we are.Didn't pass - never even came to a vote. Wasn't supported by the governor or the majority in the legislature.
California moderate Democrats shut down 'wealth tax' proposal
(The Center Square) – California moderate Democrats shut down proposal to create a “wealth tax” on unsold assets soon after governor Gavin Newsom announced his budget and declared he would
And that the governor and most democrats opposed it from the beginning and have every year the bill was proposed.
I did post a credible source showing that the bill has died every year it was proposed.
Unless you have a credible source showing the opposite we can probably put this fear to bed.
Well..OK. I guess I`m a little confused. When I googled " Does California have an exit tax ", the answer was in the affirmative. Fine with me if this is put to bed, I suppose.
Did a quick search, and didn't find that California's exit tax has been passed, only that it's been proposed.
The state already has income tax of over 13% (for reference, Alabama's state income tax is 5% and there are endless deductions), so there might still be a powerful incentive to leave.
Further complicating that calculus is the fact that the income tax is just that...a tax on income. Whereas the exit tax, if it passes, is a tax on wealth, defined as net worth.
Also, the exact definition of "net worth," gets really hairy for the targeted people. As in, it's pretty easy to come up with the value of publicly traded stocks, bonds, CDs, Treasury notes, etc.
But what about privately-held companies? What about special classes of shares in public companies often held by founders and their families? For example, Ford.
What about ownership interest in a venture capital fund?
What about fine art?
What about the present value of future income you'll receive from a trust? What about the trust corpus itself?
Do you tax the present value of Social Security or any pensions? Using what actuarial assumptions? Regardless, would that be in addition to or in place of tax on the income from pensions or SS?
Suppose you own a godamighty ranch in Idaho -- not uncommon among the targets. Does California have jurisdiction to tax you on the value of real estate that isn't even in the state? It didn't when you lived in California, but now that you've moved out of California it does? Really? How does that work?
Net worth is assets minus liabilities. So how do you define liabilities? A bank note is pretty easy. But suppose that among your large portfolio of businesses you own 100% of a given company. You personally guarantee that company's debt, and alone among your portfolio, this particular company is in financial distress. At what level of distress does the guarantee (normally classified as a contingent liability) become counted as a real liability?
This is a clear money grab based on political calculation. The targeted population is really rich people, and there aren't enough of them to truly move the fiscal needle for a state the size of California. Plus, the general public loves sticking it to rich people because....well, it feels good.
So as a politician, you pander to the public, gain the image of sticking it to the rich, and don't lose much in the way of votes -- and if the target no longer lives in California, they can't vote against you anyway.
If this passes (and I didn't find anything that said it has yet), it will be challenged immediately. They might win in California courts, but it would be appealed. And once it gets out of the friendly confines of the California courts, I don't see any way it's allowed to stand.
The state already has income tax of over 13% (for reference, Alabama's state income tax is 5% and there are endless deductions), so there might still be a powerful incentive to leave.
Further complicating that calculus is the fact that the income tax is just that...a tax on income. Whereas the exit tax, if it passes, is a tax on wealth, defined as net worth.
Also, the exact definition of "net worth," gets really hairy for the targeted people. As in, it's pretty easy to come up with the value of publicly traded stocks, bonds, CDs, Treasury notes, etc.
But what about privately-held companies? What about special classes of shares in public companies often held by founders and their families? For example, Ford.
What about ownership interest in a venture capital fund?
What about fine art?
What about the present value of future income you'll receive from a trust? What about the trust corpus itself?
Do you tax the present value of Social Security or any pensions? Using what actuarial assumptions? Regardless, would that be in addition to or in place of tax on the income from pensions or SS?
Suppose you own a godamighty ranch in Idaho -- not uncommon among the targets. Does California have jurisdiction to tax you on the value of real estate that isn't even in the state? It didn't when you lived in California, but now that you've moved out of California it does? Really? How does that work?
Net worth is assets minus liabilities. So how do you define liabilities? A bank note is pretty easy. But suppose that among your large portfolio of businesses you own 100% of a given company. You personally guarantee that company's debt, and alone among your portfolio, this particular company is in financial distress. At what level of distress does the guarantee (normally classified as a contingent liability) become counted as a real liability?
This is a clear money grab based on political calculation. The targeted population is really rich people, and there aren't enough of them to truly move the fiscal needle for a state the size of California. Plus, the general public loves sticking it to rich people because....well, it feels good.
So as a politician, you pander to the public, gain the image of sticking it to the rich, and don't lose much in the way of votes -- and if the target no longer lives in California, they can't vote against you anyway.
If this passes (and I didn't find anything that said it has yet), it will be challenged immediately. They might win in California courts, but it would be appealed. And once it gets out of the friendly confines of the California courts, I don't see any way it's allowed to stand.
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I tend to agree with this analysis.
That may in part be why Newsome and the vast majority of democrats in the legislature have opposed it every year since it was first introduced.
They also may oppose it in principle for all I know.
Well, got to figure out SOME way to raise the dollars to pay for all the homeless, illegals, and reparations in Gavin`s progressive paradise.
California does not have reparations.
And none of the proposed bills regarding the subject include widespread cash compensation.
One of the proposal would compensate families whose property was taken by the state in what would now be most likely illegal circumstances.
That seems fair.
I don't know how much money California spends in terms of dollars or % of the budget off the top of my head. Is this something you've researched or just shooting from the hip?
Maybe, but not sure I buy that line of argument. California would have the world's 5th largest GDP if it was a country. People aren't exactly knocking down Alabama's door to go there to earn massive amounts of income. You may get taxed less, but you are going to make a whole lot less as well.
True. But the fact remains there are those who actually considered and proposed this nonsense.Didn't pass - never even came to a vote. Wasn't supported by the governor or the majority in the legislature.
California moderate Democrats shut down 'wealth tax' proposal
(The Center Square) – California moderate Democrats shut down proposal to create a “wealth tax” on unsold assets soon after governor Gavin Newsom announced his budget and declared he would
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