California wealth tax could become first of its kind in US under new proposal
A group of state lawmakers on Thursday proposed a first-in-the-nation state wealth tax that would hit about 30,400 California residents and raise an estimated $7.5 billion for the general fund.
The tax rate would be 0.4% of net worth, excluding directly held real estate, that exceeds $30 million for single and joint filers and $15 million for married filing separately.
California is facing a big budget deficit because of the health and economic crisis brought on by the coronavirus, and “we can’t simply rely on austerity measures,” to close it, said Rob Bonta, D-Oakland, lead author of AB2088. “We must consider revenue generation.”
He admitted that the union-sponsored bill will not be heard before the Legislature adjourns Aug. 31, but “it can be reintroduced on day one of the next session.”
Bonta said he would like to see a wealth tax passed in addition to the “millionaires tax” proposed in a bill introduced in late July. AB1253 would add surcharges of 1% to incomes (joint or single) between roughly $1 million and $2 million, 3% on income between $2 million and $5 million, and 3.5% on income greater than $5 million, bringing the top rate to 16.8%. California’s top rate today, at 13.3%, is already the highest in the nation.