SACRAMENTO, Calif. (KTXL) — California Democrats unveiled a proposal Thursday to boost state revenue during the pandemic — a new tax on the richest of the rich Californians.
“There is an absolute limit to how much wealth one individual can accumulate while people are literally struggling to survive,” said Assemblyman Ash Kalra, D-San Jose.
Assembly Bill 2088 would put an annual tax rate of 0.4% on residents with a worldwide net worth of $30 million or more.
Those subject to the wealth tax would need to report all assets, including stocks, bonds, cash, private equity or hedge funds, and other financial assets to the state’s franchise tax board, which would manage collections.
Lawmakers say this would be a first-in-the nation law, generating $7.5 billion annually.
They say the tax would be imposed upon the top 0.15% of earners in California or about 30,000 people.
“We’re talking about the ultra, super wealthy who can quarantine on a yacht,” said Assemblyman Miguel Santos, D-Los Angeles.
Critics say this could push already valuable taxpayers to leave the state.
“We already have the highest income tax rate in America at 13.3% and to add this notion of a wealth tax is extremely foolish and, quite frankly, I doubt it will gain traction, even as progressive as this legislature is,” said Howard Jarvis Taxpayers Association President Jon Coupal.
Lawmakers admit the proposal won’t get a hearing or go through the legislative process before the end of session on Aug. 31.
Advocates are hoping for an informational hearing during recess with the possibility of reintroducing it in January.