California continues to promote what looks like socialism. State lawmakers introduced a bill that would impose a “worldwide wealth” tax on the wealthy and it would go with them even if they moved out of the state.
California Democratic Assembly member Alex Lee introduced the legislation, creating a 1.5% tax for a resident’s worldwide net worth that is over $1 billion in the 2024 and 2025 tax years.
The bill would also create a 1% annual tax for a resident’s worldwide net worth that exceeds $50 million and an additional 0.5% tax for worldwide wealth exceeding $1 million.
“With this modest tax on the ultra-wealthy who pay a lower effective tax rate than the bottom 99%, we would have sustained investments in our schools, tackle homelessness, maintain and expand needed services, and much more,” Lee said in a press release.
“We’ve been losing our lower and middle-income residents that are being priced out of this state because they can’t afford the high cost of living while shouldering the burden of paying for our roads, infrastructure, and schools all the while the ultra-wealthy doubled their fortunes during the pandemic,” he added.
Wealth taxes are based on an individual’s assets, income tax is only on net income earned. So current and former residents of California would have to pay based on the value of stocks, savings accounts, arts and collectibles, real estate, pension funds, financial assets held offshore, and other assets.
Joe Lonsdale is a venture capitalist and entrepreneur who recently fled to Texas from California. He said in an interview with Fox Business, “This is really more a theatrical production going on in California,” he commented. “The state’s a total mess. And what they’re doing here is they’re signaling something crazy, and they’re probably going to compromise and tax the billionaires more some other way. But it’s really ridiculous.”