California lawmakers introduced legislation to impose new taxes on the state's richest people.
The longshot bill would hit households worth $50 million+, with a higher rate for billionaires.
Previous efforts to introduce similar legislation have failed.
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A group of Democratic lawmakers in California proposed a new tax which they say could extract billions of dollars from the state's wealthiest people.
The bill, introduced by Assemblymember Alex Lee of San Jose, would affect all households with net worths of more than $50 million with a 1% annual wealth tax.
It has a second, higher rate of 1.5% for households worth more than $1 billion.
The tax is especially far-reaching for targeting accumulated wealth rather than income.
The tax would raise more than $22 billion a year in state revenue, according to an analysis by professors at UC Berkeley and UC Davis.
However, the bill is unlikely to pass given the current dynamics in the California legislature.
Lee tried to introduce nearly identical legislation last year, but it failed to make it to a committee hearing at the time. Other efforts to introduce similar legislation have also failed.
Even if enough lawmakers backed it, the bill would also need special approval from voters in order to get round California's tax-rate limit of 0.4%.
California is home to the most billionaires in the US. Critics of the bill fear it could chase them away.
Elon Musk, ranked by Forbes as the world's richest person, last year moved Tesla's headquarters from Palo Alto to Texas, where taxes are lower.
Lee pushed back against that assertion in a statement on Wednesday cited by Fox 5.
He said: "While some say California is driving away higher-income residents, the opposite is true – we've actually been losing lower and middle-income residents that are being priced out while continuing to gain higher-income residents."
"With a tax on the ultra-wealthy who pay a lower effective tax rate than the bottom 99%, we can invest in our schools, tackle homelessness, expand needed services, and much more."
If it passes, the bill would come into effect in 2023 for billionaires and in 2025 for those with net worths of more than $50 million.
eyecomeanon on February 20th, 2022 at 15:21 UTC »
Just keep in mind that Wealth taxes (rather than income) are some of the more difficult to administer. That's why they're generally pretty rare. There are some very targeted wealth taxes like Property taxes on vehicles, land, or houses. They're narrow for a reason.
p4177y on February 20th, 2022 at 14:41 UTC »
If they really wanted to reform the wealth disparity in the state, they'd work on reforming Prop 13.
dravenonred on February 20th, 2022 at 14:11 UTC »
Best Case: "California, the best public schools in the world"
Worst case: "California, the state with zero billionaires."
Sounds like a win-win to me.