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Welcome to Hotel California: Lawmakers Move to Tax People Who Have Left the State.


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2023 Jan 24, 4:29am   407 views  18 comments

by Al_Sharpton_for_President   ➕follow (5)   💰tip ($0.12 in tips)  

California lawmakers appear intent on making the Eagles song Hotel California a reality … at least when it comes to taxes for those who try to flee the state. At the Hotel California, “you can check-out any time you like, but you can never leave!” With soaring costs and a massive $24 billion deficit, the state is also facing an exodus of people leaving the state. The solution? Not only impose a wealth tax (which will fuel even more departures) but pursue those who left the state.

The new bill introduced by Democratic Assemblyman Alex Lee would impose an extra annual 1.5% tax on those with a “worldwide net worth” above $1 billion, starting as early as January 2024.

The law has a cynical bait-and-switch provision. The billionaire tax is just meant for the initial packaging and passage. It can therefore be sold as a “billionaire’s tax.” However, in two years, the threshold drops to a worldwide net worth exceeding $50 million. While billionaires would stay at 1.5%, those in the lower tax bracket would be hit by a 1% added rate on worldwide assets.

It also includes the taxation on those who left the state . . . many due to the high taxes. California already has the highest tax burden in the nation. It relies on its top 1% of taxpayers for roughly half of its individual income tax revenue, but continually treats those taxpayers like game in a canned hunt. The result, not surprisingly, is that they are leaving for states like Texas and Florida.

The new tax would arrange for payments to California’s Franchise Tax Board for years after a departure for those assets which are not easily converted into cash.

I have previously written how the wealth tax pushed by Democrats like Sen. Elizabeth Warren are unconstitutional under the federal Constitution. States are not subject to the same limit. Not surprisingly, the highest taxing states are pursuing the most wealthy . . . who are leaving in droves. That includes Connecticut, Hawaii, Illinois, Maryland, Minnesota, New York and Washington.

What is most striking under the proposed law is that it will not only spur more wealthy couples to leave the state but discourage any from moving into the state. Even if this ill-considered law does not pass, who wants to risk going to a state that is actively pursuing new ways to tax you even if you ever decide to leave? With many in the top one percent getting out of the state, the tax demand on the most wealthy is only likely to increase with the dwindling numbers in the top tax brackets. No one wants to be the last buffalo on the plains for the California tax collectors.

Under the existing exit tax, businesses and individuals must pay a one-time tax to leave based on the value of the business or individual’s assets, including property, stocks, and other investments. For those who have earned more than $30 million, you can continue to pay for years after fleeing the state. The current exit tax is 0.4% of an individuals’ net worth over $30,000,000 in a tax year, including assets located outside of California other than real estate.

Taxing wealth is no easy matter so the proposal seeks $660 million per year for administrative costs.

California is also considering constitutional amendments and referendums to increase taxes for the most wealthy.

Last thing I remember, I was
Running for the door
I had to find the passage back
To the place I was before
“Relax, ” said the night man
“We are programmed to receive
You can check out any time you like
But you can never leave”

https://jonathanturley.org/2023/01/24/welcome-to-hotel-california-lawmakers-move-to-tax-people-who-have-left-the-state/#more-199717



Comments 1 - 18 of 18   

1   cisTits   2023 Jan 24, 6:23am  

Some of that will be struck down in federal court. Won't stop the state from going after you, tho.

And there is nothing stopping you from setting up an out-of-state trust/LLC/Corp and transferring your CA assets there, then move. That way, those assets don't belong to you personally.
2   Shaman   2023 Jan 24, 7:14am  

I don’t see what california can do to people who don’t live here. Extradition for nonpayment of state taxes isn’t a thing. Maybe if you have assets still here they could put a lien on them? Makes even better sense then to just sell everything and leave.
3   clambo   2023 Jan 24, 7:44am  

If you depart California, be sure the sell the house or they will be able to tax you forever.
You will owe California a couple of taxes on the house sale in addition to a couple of Federal taxes (capital gain, Obamacare taxes).
I wonder if the assholes will find a way to tax me in California on my Apple dividends? I don't doubt they are thinking of doing that.
Greed, sloth, envy are all over the place; the problem is assholes get elected by the greedy. To pay for their schemes they have to tax you more.
4   Patrick   2023 Jan 24, 8:38am  

I find it amusing that a lot of liberal rich people are getting bitten by their own attack dogs.
5   Ceffer   2023 Jan 24, 9:05am  

Stolen elections have consequences. California is an occupied State now. You have a bunch of KommieKunt parasites elevated by the corporate parasites to consolidate tier power, so one would presume eventually the KommieKunt fleas would go after the corporate dogs.
I somehow doubt the Peninsula will be emptying out anytime soon, too much snob appeal. Coastal elites have the greatest freedom to move at will, but it is unlikely they will change until the Hun are on their lawns, like in Venice CA.
6   Eric Holder   2023 Jan 24, 12:09pm  

Al_Sharpton_for_President says

It also includes the taxation on those who left the state


How?
7   Eric Holder   2023 Jan 24, 12:09pm  

Shaman says

if you have assets still here


... you remain a CA tax resident. So not somebody who has left.
8   Tenpoundbass   2023 Jan 24, 12:52pm  

Sounds like they want to tax the wealth you made and left the state with. What I don't understand is, if you left with 30,000,000 you invested it all with FTX, then they went belly up and you lost it all. How could they pay them taxes on it in the years to follow?

I don't think Ron DeSantis or any other strong Red State Governor would allow that. You don't let snot face punks, pluck your pigeons.
9   mell   2023 Jan 24, 1:22pm  

Yeah they have no recourse if you left except for taxing assets still in CA, so you have to dissolve everything when you leave
10   HeadSet   2023 Jan 24, 5:58pm  

I would not mind seeing California tax the California state pensions of those ex-government workers who left California for less taxing locals. Easy to do, just deduct the taxes before sending the checks.
11   B.A.C.A.H.   2023 Jan 24, 6:16pm  

HeadSet says

I would not mind seeing California tax the California state pensions of those ex-government workers who left California for less taxing locals

Yes. I know retired schoolteachers who did that.
12   cisTits   2023 Jan 24, 8:06pm  

HeadSet says

I would not mind seeing California tax the California state pensions of those ex-government workers who left California for less taxing locals. Easy to do, just deduct the taxes before sending the checks.


Nope. They tried that but Congress made it illegal.
13   clambo   2023 Jan 25, 7:23am  

A bit off the subject herewith:
I realized something interesting; although as a US citizen I am required to pay taxes on my income no matter where I live, and I am paying $248 per month for medicare (deducted from my social security each month), I cannot use Medicare outside of the USA (emergencies are covered I was told).

This is fucked up in my opinion; they still take my "premium" and I'm still paying taxes forever, so why can't I use this "benefit" outside of the USA?

Prince Harry rides again. Oh woe is me!
14   zzyzzx   2023 Jan 25, 9:59am  

mell says

so you have to dissolve everything when you leave


You write that as if it were a bad thing!!!
15   cisTits   2023 Jan 25, 4:42pm  

clambo says

This is fucked up in my opinion; they still take my "premium" and I'm still paying taxes forever, so why can't I use this "benefit" outside of the USA?


The excuse is because they can't monitor fraud or force foreign doctors to comply with Medicare bullshit.

The real reason: there will be a stampede of retirees going overseas for even more treatment and the AMA won't like that one bit. The southern parts of the four states will see lots of retirees moving there too, I suspect.
16   🎂 WookieMan   2023 Jan 25, 6:10pm  

cisTits says

The excuse is because they can't monitor fraud or force foreign doctors to comply with Medicare bullshit.

The real reason: there will be a stampede of retirees going overseas for even more treatment and the AMA won't like that one bit.

Probably get better treatment anyway.

Gashed both my feet in Dominican stepping on glass and kicking an anchor (long story #drinking). The crew on a shitty looking catamaran (was fun) did as good if not better job to clean up the wounds than nurses in the states. Was never in pain as I have a high threshold. I was bleeding all over and they followed me based on the trail of blood. They got a rather large tip....

It was the classic oh shit, ouch, I stepped on a shell. Nope slit the bottom of my foot at the arch 6". Hurt for a day. Have recovered just fine with an on board first aid kit on the cat. I feel for the dude that had to look at my ugly feet. There was fucking blood everywhere. It was one of those slices/cuts you just don't feel. I probably should go in for a tetanus shot, but not sure I even believe in those anymore.
17   Misc   2023 Jan 26, 3:06am  

The State of California is already gonna cut its spending this coming up year by about 7.5% because there is much less "free money" capital gains taxes coming in. Well...that is what they say anyways.

...but the State politicians are basing this on there being no recession. I think when reality hits, it is gonna hit hard. With the Republicans in control of the House, I doubt that an Obama style bailout of the public sector is in the cards. The State and municipal employees are gonna get their walking papers.

I am sure we will all feel sorry for them.
18   pudil   2023 Jan 26, 3:18am  

mell says

Yeah they have no recourse if you left except for taxing assets still in CA, so you have to dissolve everything when you leave


What if you work for a CA based company? I’d imagine they could force that company to withhold for you.

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