Part II California Plan to Tax Worldwide Wealth

"Welcome to the Hotel California, you can check out any time you like; but you cannot leave."  Remember that famous melody from The Eagles?

The California Assembly has put that into legislation. AB 2088 will create a "Wealth Tax" on residents and any person who stays in California longer than 60 days.  Then extends the tax for 10 years!  

This is certainly an answer to why Ellison and Musk moved to Hawaii and Texas.  In addition to these well known residents David Blumberg and Keith Rabois have left The Hotel California too!  DropBox and Splunk are on their way out the door. 

The list most likely will go on, but a "wealth tax"?   Of course, how else is California going to pay off their massive deficit and liabilities?  

But a Wealth Tax?  The California Constitution can most likely cover that on State Residents, but going across state border to attach to the wealth of citizen of other states and countries is likely to run afoul of the U.S. Constitution for U.S. citizens.  Of course you can forget about any country cooperating with the tax collection.  Then too, one must consider the collection apparatus and appraisal apparatus needed and necessary to calculate and collect the tax.

Each December 31 this tax would gather up a new crop of taxpayers for the decade.  

What happens to our well known and respected Universities?  Or the multi-million dollar homes?  The success of the knowledge created will stop at our borders as any graduate who goes onward to create wealth will find themselves on the tax role in California.  

The bill is estimated to create $7.5 Billion in additional revenue, YEARLY!  

Another proposal on the Assembly Floor is raising the maximum tax rate to 16.8% and raise another $6.8 billion, YEARLY!

California has enough financial woes for the entire nation.  Unfulfilled public pension promises, a vast social safety net so a Wealth Tax is the only way for politicians to stay in office and pay for the votes they bought.  It is the 1% that pay for 46% of the total California income tax.

Well, the argument is it is ONLY .4% on net worth over $30 million.  Mark Zuckerberg's first year tax would be about $400 million.  If he moved out of state the tax would extract $4 Billion.  If he remained in the state it would be ONLY $2 billion extra.  

Bill Gates home in Palm Springs would come into question.  Stay in California for 60 days and the tax would approximate $1 million.  If he stayed out of the state the tax would continue at a diminished rate for the next decade.  

At the moment there are no police roadblocks on the freeway trying to keep moving trucks from leaving California.  If it passes the state may need to consider placing Road Blocks and a fund to purchase all the large estates that will be liquidated.

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