Progressive California lawmakers introduced a bill last week that would impose a new annual tax on wealthy residents, even if they flee the state. https://www.theblaze.com/news/calif...at-would-follow-residents-who-leave-the-state You can run but you can't hide. Your money isn't yours, so cough it up! How this law would work is to immediately tax someone on all the assets they own at the time they try to leave the state. For example, suppose you live in California but already own property in Texas. At the time you permanently change your residence from California to Texas, you would have to pay to California a huge tax on your property in Texas. The alleged reason being that you are subject to control by the state where you are a permanent resident of, and that includes everything you own, and so when you try to leave that control, the state has the right to sink its clutches into you and tax you for everything it will lose the right to be able to tax you for later. It may sound convoluted, but this is the actual concept and logic being used to justify these "wealth tax" laws. In other words, California would already be collecting a 1% wealth tax every year on your property both in California and in Texas, in exchange for the "privilege" of living in California. When you try to escape from that, California would then view that as you trying to "cheat" and escape your tax obligations. So you would then be forced to pay an "exit tax" at that point, for your property in Texas to finally be free from obligations imposed from California. The same would also apply to any stocks you owned, or any business you owned, even if that business was outside of California. For those who believe this concept is too ridiculous, illogical and absurd to actually have any chance of becoming law, read this thread: Norway to tax increases in investment value on those trying to escape And of course the U.S. already taxes U.S. citizens on any income they might earn in other countries (when that income is excess of $90,000). Right now the proposal is only for people with $1 billion in the bank, some will claim. If this law passes, it will just set the precedent that this is okay. The politicians will eventually try to impose the same concept on the middle class, or at least the upper middle class. Of course they will start with the super rich, because how many people are going to object to that? It's salami tactics. Start with a tiny minority, and then keep working your way down, little by little. If they tried to suddenly implement this law all at once, there would be too much combined opposition from several different segments of society. Rather they want to start boiling the crab in the pot slowly, so it won't jump out.
You can read about how California tax authorities went after Gilbert Hyatt, a wealthy man from the semiconductor industry who moved to Nevada and tried to take his wealth with him, waiting to sell his stockholdings until after he moved to Nevada to avoid paying California taxes on the sale. Forbes has an article too Now, California Can Assess Taxes No Matter Where You Live...Really (forbes.com) California becomes even more aggressive going after former residents for taxes - Austin Business Journal (bizjournals.com) Mark Calvey, reporter at San Francisco Business Times, August 13, 2021 California is famous for leaving no stone unturned in its quest to collect taxes the state believes it’s owed by former residents, but the Golden State is becoming even more aggressive in pursuing taxpayers that leave, accountants say. Diane Kennedy, an accountant with US TaxAid Services in Las Vegas with more than three decades of experience working with the wealthy on their taxes, recently sent an email alert to clients that several states are more enthusiastic about collecting taxes from former residents. "Over the past month, one of my most frequently asked questions has to do with what it takes to move out of a higher-tax state for a lower-tax state," Kennedy told clients. "The most aggressive tax state is California, as far as wanting to make sure you can’t escape their net."
Good. Maybe California can keep these people from destroying the rest our country and raising our housing and property costs to unaffordable levels. These people created the California monster that's eating them. I feel no sympathy.
California never expected that folks would leave. As if. And now, these idiots in the Sacramento State house believe that they can impose taxes on folks who left. Typical... The most corrupt political class ever. CA Democrats, and frankly the entire democratic party have become grafters preying on the citizens for their wealth and power. They must be stopped.
Do you mean unconstitutional under the California constitution? I admit I'm not familiar with it, but it seems like, depending on a State's own laws and constitution, they can have a State wealth tax if they want it. I encourage every blue state to have a State wealth tax, the higher the better.
I think states like California believe if they had the right to tax you on your stuff in other states while you were living there, they have the right to tax you on your stuff right after you move away.
It very likely might have implications under the U.S. Constitution if one state is trying to have a former resident extradited from another state. I think this certainly is a grey zone, and could very likely end up going to the U.S. Supreme Court. That hasn't happened yet.
well I don't believe they have that power and hopefully the federal courts will give them an ass kicking
The argument they're going to try to push is that the person had a tax obligation the moment they tried to leave the state as a resident, and thus it falls under state jurisdiction. (Just like if you owed taxes from last year, didn't pay, and then moved to another state, your original state could still have you extradited for tax evasion) But as I said, this is a grey zone, and it's very well possible the court could rule on this either way.
