The ‘Hotel California’ Wealth Tax Advances, You Cannot Leave to Escape It
10th January 2024
Wealth Tax Details
- The bill would impose an annual excise tax of 1.5% on the worldwide net worth of every full- and part-year California resident that exceeds $1 billion, starting this tax year.
- Come Jan. 1, 2026, the state would tax wealth that exceeds $50 million at a rate of 1% each year, with an additional 0.5% tax on assets valued at more than $1 billion.
- Part-time residents would be taxed on a pro rata share of their wealth based on the number of days they spend annually in California.
- The tax would also apply to nonresidents who have recently left the state.
- Democrats exempted real property from the tax as a favor to their high-end real-estate industry and Hollywood donors.
- To spread the wealth around to plaintiff-bar donors, the bill would apply the state’s False Claims Act to wealth-tax records and statements. This means plaintiff attorneys could sue affluent individuals on behalf of the state for allegedly under-reporting assets. Plaintiff attorneys would be entitled to a share of the state’s recovery.
Time to leave.