Why would anyone want to live in California?  The more you have the more they want…so they can give it to someone else.

In our two-party system country it’s a one-party state anomaly.  It’s been Democratic for eons but for the brief tenure of Gov. Schwarzenegger.

Where does the system of checks and balances lead if there are no checks and balances?  Rolling blackouts, high water prices, uncontrollable regulation, etc.

Now California seeks to take its punitive taxes to the next level.  Here’s a look at the latest proposals:

WEALTH TAX

Democrat Rob Bonta (Oakland) leads a group proposing to tax not only income but overall wealth.  Not once but annually.  Such a tax would be the first of its kind in that it would not tax income or transfers (such as estate and gift).

The proposal would impose a 0.4% tax on all net worth above $30 million for single or joint filers (or $15 million per spouse for those married and filing separately).  Net worth would be calculated as the sum of assets and liabilities whether inside or outside of California’s borders including assets held outside of the U.S.

If enacted in its current form it would impact over 30,000 Californians.

To ensure it can get as many bites at the wealth apple as possible California’s bill allows for taxpayers with ownership interests in hard-to-value assets and entities (e.g. Silicon Valley startups) the ability to elect for an unliquidated and deferred tax liability to be attached to those assets.  Taxpayers making such an election would sign a contract with the state as to when the valuation of such assets and imposition of tax liability would arise.  In essence taxpayers get relief now in exchange for a promise to pay taxes later once hard-to-value assets are more easily valued (i.e. startup goes IPO).

Leaving California won’t solve the problem.  The proposal would continue to tax those who leave California but were subject to the tax in one of the preceding ten years.  For example an individual living in California the previous ten years but moving out of state would nonetheless owe the wealth tax to California for the next ten years at a diminishing rate until phasing out – 90% wealth tax owed in year 1, 80% in year 2, 70% in year 3…

INCOME TAX

A bill in the California Assembly would raise the top marginal income tax rate from its current punitive 13.3% to 14.3% (households earning more than $1 million), 16.3% (on income above $2 million) and 16.8% above $5 million.

The combined federal and state top marginal tax rate would rise to 53.8% on wage income and 40.6% on capital gains.

Democratic sponsors of the bill say the tax hike would impact ‘only’ the top 0.5% of taxpayers yet these people currently pay 40% of the state’s income tax revenue – some $32 billion in 2018.

These same taxpayers are rather mobile so even if ensnared by the above referenced wealth tax they can still avoid the onerous income tax by picking up and crossing the border into 0% tax Nevada.  One need look only to the recent past for evidence.  According to IRS data California in 2018 lost $8 billion in adjusted gross income to other states (up from $135 million in 2012 when California pushed through its last massive income tax increase).

CONCLUSION

California’s parasitic government seems to have forgotten the first rule of survival for any parasite – don’t kill the host.  Does the liberal left think these tax policies will entice individuals to relocate to and/or remain in California or will tax-friendly states such as Tennessee and Texas continue to attract people, capital and jobs?

As Margaret Thatcher so aptly noted, “The trouble with Socialism is that eventually you run out of other people’s money.”