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California lawmakers propose new tax on rich to boost state revenue during pandemic

State News

SACRAMENTO, Calif. (KGET) — California lawmakers are coming up with ways to boost state revenue amid the pandemic.

One of the proposals rolled out Thursday — a tax on California’s richest of the rich.

California Democrats unveiled a proposal Thursday to add another tax to the wealthiest in the state.

“There is an absolute limit to how much wealth one individual can accumulate while people are literally struggling to survive,” Assemblymember Ash Kalra said.

The bill, AB 2088, would put an annual tax rate of .4% on residents with a worldwide networth 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 collection.

Lawmakers say this would be a first-in-the nation law, generating $7.5 billion a year.

They say the tax would be imposed upon the top .15% of earners in California, or about 30,000 people.

“We’re talking about the ultra super wealthy, who can quarantine on a yacht,” Assemblymember Miguel Santiago said.

But critics say this could push already valuable taxpayers to leave the state.

Jon Coupal is the president of the Howard Jarvis Taxpayers Association.

“We already have the highest income tax rate in America and to add this notion of a wealth tax is extremely foolish,” Coupal said. “And quite frankly I doubt it will gain traction, even as progressive as this legislature is.”

Lawmakers admit the proposal won’t get a hearing or go through the legislative process before the end of session Aug. 31.

Advocates are hoping for an informational hearing during recess with the possibility of reintroducing it in January.

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