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August 18, 2020 | California Seeks Wealth Tax to Soak the Rich, Even Those Leaving

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
California legislators want a wealth tax on the rich, even if they flee.
Soak the Rich SchemeCalifornia legislators seek a Wealth Tax that applies to anyone who has lived in the state for the last 10 years.

A pack of Democratic lawmakers in California are proposing a wealth tax for the state’s richest citizens, forcing them to pay more essentially just for owning a lot of stuff.

“The California Wealth Tax would add critically needed revenue for California by creating a more equitable tax structure,” [assemblyman] Rob Bonta said in a press release promoting the bill. ”

The proposed wealth tax would add a .4 percent tax on a taxpayer’s net worth for net worths that exceed $30 million, which Bonta estimates will affect fewer than 31,000 Californians. From this proposed wealth tax, he estimates the state will raise $7.5 billion per year. The state currently faces a $54 billion budget deficit due in part to economic downturns from the coronavirus pandemic.

You don’t even need to ask whose bright idea this was because Bonta is actually quite happy to reveal that the bill’s co-sponsors are the California Federation of Teachers, the California Teachers Association, and the Service Employees International Union.

Blatant Theft

A wealth tax is blatant theft that would likely not stand a legal challenge.

Yet,higher and higher taxes are exactly the kind of thing one can expect more of.

In states like California, Illinois, and New Jersey, the call for higher taxes will never stop.

Even if a wealth tax is ruled unconstitutional, Bonta and his ilk will just seek higher and higher progressive rates on income.

Professors Urge Higher Taxes in New Jersey

Also note that New Jersey Urged by Economists’ Group to Raise Taxes to Balance Budget.

New Jersey should increase taxes on wealthy residents and big corporations to balance its budget, a group of state college economics professors wrote in a joint letter to Governor Phil Murphy and legislative leaders.

Spending cuts would be counterproductive, and would have a more negative impact on residents than raising taxes, the group wrote. A tax-rate increase on those earning $250,000 or more would raise about $1.5 billion in new revenue each year, while extending a corporate tax surcharge of 2.5% to businesses with profits of $1 million or more would provide another $425 million, according to the group of more than 90, mostly professors from Rutgers University and other colleges in the state.

Get the Hell Out Now

If you live in states like California, New Jersey, and Illinois, get the hell out now.

We did.

But please note that It Takes 3 Weeks to Escape Illinois

Why 3 weeks? That’s how long it takes to reserve a one-way U-Haul outbound.

“Everyone is leaving. No one is coming,” a U-Haul agent told us a few weeks ago.


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August 18th, 2020

Posted In: Mish Talk

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