Gavin Newsom Declares New Wealth Tax Dead On Arrival In California

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Governor Gavin Newsom’s office confirmed this week that Newsom opposes Assembly Bill 259, wealth tax legislation introduced in January by Assemblyman Alex Lee (D). AB 259, if enacted, would levy an annual 1.0% tax on worldwide assets exceeding $50 million. Net worth above $1.0 billion would be taxed at a 1.5% annual rate. Governor Newsom said a wealth tax was “not part of the conversation” and that such proposals were “going nowhere” in California when a state wealth tax was first floated in Sacramento three years ago, albeit at a much lower rate than what Assemblyman Lee is now proposing. On February 15, Governor Newsom’s staff confirmed with Americans for Tax Reform’s Patrick Gleason that, even with a more than $22 billion budget deficit, Newsom remains opposed to a prospective wealth tax, including the one that would be created by Assemblyman Lee’s new bill. When the new wealth tax bill was introduced in California last month, Politico reported that Assemblyman Lee and other wealth tax advocates “hope Newsom will be moved by polling that suggests voters approve of saturating the wealthy.” Consider that hope dashed as of this week. That’s because, even if Lee is able to get his wealth tax legislation passed out of the Assembly and Senate, Governor Newsom’s office made it clear this week that he would veto AB 259 should it come to his desk. This rejection of the latest wealth tax bill to be introduced in the California Legislature follows Newsom’s opposition to Proposition 30, a measure on the 2022 ballot that sought to raise the income tax rate on high earners beyond 15%.

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