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August 27, 2008
California Ballot Initiative to Impose 45% Income Tax, 55% Wealth Tax & 36%-54% Exit Tax
A California activist is trying to gather the 694,354 signatures needed to place a tax initiative on the ballot that would:
- Impose a new 35% income surtax (in addition to federal taxes and the existing 10.3% top state rate) -- 17.5% (on all of the taxpayer's income) when income exceeds $150,000 (single)/$250,000 (joint), and an additional 17.5% (again, on all of the taxpayer's income) when income exceeds $350,000 (single)/$500,000 (joint).
- Impose a one-time 55% wealth tax on assets exceeding $20 million held by a California resident or held in California by nonresident.
- Impose an exit tax of between 36.5% to 54.3% on both income and unrealized appreciation in asset values over $5 million when a resident dies or leaves California.
See Roth & Co., Tax Foundation, and Taxable Talk.
August 27, 2008 in News | Permalink
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» AN 8.0 EARTHQUAKE WOULD CAUSE LESS DAMAGE from Roth & Company, P.C.
A Californian must really hate his state. What other explanation could there be for the initiative he is trying to... [Read More]
Tracked on Aug 27, 2008 8:36:13 AM
» California Ballot Initiative: We're Gonna Tax the Shit Out of You, and Then Really Tax the Hell Out of You If You Try to Leave from Ace of Spades HQ
That last part -- the "exit tax" -- is particularly egregious. That's where these people always wind up. They want to raise taxes to the skies. When confronted with the reality that if they do that, people will flee, they... [Read More]
Tracked on Aug 27, 2008 8:04:33 PM
Comments
These are the acts of a dying state/country,
the last gasps before some type of revolution.
The "something for nothing" crowd will be the ones who feel this the most as producers leave the state in order to avoid the parasites.
Posted by: Dave | Aug 27, 2008 11:18:40 AM
> a one-time 55% wealth tax
Is there a line somewhere between a "tax" and a "takings"? This feels more like the latter to me than the former.
Posted by: dWj | Aug 27, 2008 11:37:12 AM
Karl Mark would be proud. Unfortunately it didn't work then either. A nation run by the state for the state will not make it.
Posted by: robertsgt40 | Aug 27, 2008 11:44:15 AM
"These are the acts of a dying state/country,
the last gasps before some type of revolution."
Really? Since when have the ultra-rich led popular revolts? I think this tax idea sounds perfect. It would only affect the guys that vote for Bush and earn money off Haliberton. DO IT! In fact, MAKE IT FEDERAL POLICY!
Posted by: Mark | Aug 27, 2008 12:18:34 PM
Folks, you'd better leave while you can.
Posted by: Kimmer | Aug 27, 2008 1:31:50 PM
I read the initiative at http://ag.ca.gov/cms_attachments/initiatives/pdfs/i786_initiative_08-0012_amdt_1.pdf
The page numbered 9 has the legislative text for the surtax. The author must have flunked math, because the surtax has two huge "cliffs" that bump tax liability several thousand dollars when income increases by $1 at the threshold. There will be income levels in which people making $10,000 less pretax end up with more money after tax. Unlike a legislative proposal, an initiative cannot be corrected after it is submitted.
Although this defect alone would likely doom the measure, I was intrigued to read what amounts to a leftist wish list for tax increases and tax expenditures. Tax revenue is steered to education and various environmental causes. The initiative violates the "single subject" rule, and even if that didn't void it there is something in there for almost everyone to dislike.
Like the 1% surtax on taxable incomes over $1M, this surtax does not index its thresholds for inflation. The people proposing these things intend to benefit from bracket creep, which will become a bigger issue in coming years as inflation accelerates.
The exit tax certainly violates the federal Constitution by interfering with interstate commerce. Moreover it looks easy to avoid and even easier to evade. Tax code should be reasonably enforceable in order to be fair, and this one is not.
Posted by: AMTbuff | Aug 27, 2008 2:23:28 PM
Who is the idiot that wants to impose these RIDICULOUS tax restrictions?
Honestly, what is wrong with you? Wasn't the damage from Prop 13 enough?
Seriously, what is wrong with you? This Prop will nothing but drive more people out of the state.
Posted by: Cal Resident | Aug 27, 2008 2:54:39 PM
Yea, that should help accelerate the rich flight from California, and then what ? Tax the s... out of the middle class. California ranks the worst for taxes and has become an intentional unattractive place to do business. Its obvious that the government will assert its alleged sovereignty and to hell with the dumb sheeple.
Posted by: Tim | Aug 27, 2008 3:40:59 PM
Buy property in AZ and NV. Those places are about to get a lot of rich people seeking refuge.
Posted by: GK | Aug 27, 2008 8:10:31 PM
The guys is clearly bug-nuts crazy, and probably not a native Californian - although if he flunked math he may have attended our Universities at some point. An exit tax???
Posted by: DirtCrashr | Aug 27, 2008 8:11:25 PM
Even scarier than the lunatic tax hikes is the proposal for the State to purchase stock in certain companies in order to affect their environmental stance. There's a name for an economic system where private companies nominally exist but are directed by the government. Hint: it starts with an 'F' and ends with 'ascism'.
Posted by: David Gillies | Aug 27, 2008 8:12:25 PM
G.T.T.
Posted by: Davy Crockett | Aug 27, 2008 8:15:52 PM
"I think this tax idea sounds perfect. It would only affect the guys that vote for Bush and earn money off Haliberton."
Oh? What about Hollywood?
Actually, a massive socialist scheme that hits Hollywood hardest is the silver lining... like poetic justice.
Posted by: Citizen Grim | Aug 27, 2008 8:17:36 PM
"It would only affect the guys that vote for Bush and earn money off Haliberton."
think so?
Posted by: zenpig | Aug 27, 2008 8:24:00 PM
i know of a company near Folsom that will be leaving for Franklin TN area at the end of the year. Employees don't even know it yet and i am not telling how i know it. Owners has had it with California and their Anti-Business laws - 47 more jobs gone bye-bye to TN
Posted by: Vero | Aug 27, 2008 8:24:30 PM
"I think this tax idea sounds perfect. It would only affect the guys that vote for Bush and earn money off Haliberton. DO IT! In fact, MAKE IT FEDERAL POLICY!"
I'm kind of hoping this is satire, because the thought that there are actually people this ignorant is too depressing to bear.
Posted by: MDV | Aug 27, 2008 8:27:11 PM
Is Atlas shrugging yet?
Posted by: chumba | Aug 27, 2008 8:30:39 PM
Really? Since when have the ultra-rich led popular revolts?
1776.
Posted by: Chairman Me | Aug 27, 2008 8:36:24 PM
You don't even have to be that wealthy to know it's time to go. We built a lovely life and raised a family there, but felt we HAD to leave four years ago. Although we dearly miss our friends, it was the right thing. Get out while you still can!
Posted by: Cal in the Rear-View | Aug 27, 2008 8:38:09 PM
Only thing missing is a $50 per hour minimum wage provision. Go socialists!!
Posted by: Mike in Oregon | Aug 27, 2008 8:43:49 PM
Arnold Shrugged
Posted by: Bubba Thudd | Aug 27, 2008 8:46:49 PM
Oh man. People had better get out of there NOW while the getting is good.
Posted by: Somebody #57 | Aug 27, 2008 8:55:43 PM
"Really? Since when have the ultra-rich led popular revolts? I think this tax idea sounds perfect. It would only affect the guys that vote for Bush and earn money off Haliberton. DO IT! In fact, MAKE IT FEDERAL POLICY!"
I have a very close friend who's a native of Petaluma, CA. She's sick of the way things have turned out there. You productive Californians of all income levels are welcome here in North Carolina. Let the parasites and illegal immigrants have it all. Maybe the socialist types will come up with a way to support the place when you've gone.
Posted by: lutonmoore | Aug 27, 2008 8:58:06 PM
As a Californian who doesn't make anywhere NEAR those limits, I suppose I ought to support it, if only because it'll chase all of those obnoxious Hollyweird liberals and neuveaux riche wine snobs out of California, and kill the corrupt movie industry forever.
But even though it'll never affect me directly, I can't help but think that SOMEBODY - like the guy who owns the company I work for - might also be impelled to "take the money and run". So maybe it will affect me after all?
Posted by: Ken Mitchell | Aug 27, 2008 8:59:51 PM
robertsgt40,
"Really? Since when have the ultra-rich led popular revolts? I think this tax idea sounds perfect. It would only affect the guys that vote for Bush and earn money off Haliberton. DO IT! In fact, MAKE IT FEDERAL POLICY!"
You do realize, super genius, that these confiscatory taxes would effectively wipe out all those deep-pocketed Hollywood Democrats who've been contributing to the Obama campaign? Take a look at the net worth of California Donks, including Diane Feinstein and Nancy Pelosi (maybe you've heard of them?), and you'll quickly realize why a) this initiative doesn't have a prayer and b) Hollywood and Silicon Valley will collectively move to Nevada if the Golden State electorate is actually stupid enough to pass it.
Posted by: MarkJ | Aug 27, 2008 9:03:14 PM
"Really? Since when have the ultra-rich led popular revolts? I think this tax idea sounds perfect. It would only affect the guys that vote for Bush and earn money off Haliberton. DO IT! In fact, MAKE IT FEDERAL POLICY!"
The ultra-rich do create a lot of jobs and spend a lot of cash and this will act as a serious disincentive to bringing those jobs and that cash to California.
And I didn't realize Barbara Streisand and her kindred in SoCal were such staunch Republicans and Halliburton supporters. I guess you learn something new every day.
Another negative consequence of this tax: if the liberals in Hollywood don't get their way in future presidential elections, they'll actually have a good excuse as to why they can't carry through on promises to flee the country.
Posted by: Mike Z. | Aug 27, 2008 9:05:47 PM
What a great idea. It will drive the rich out of the state to make more room for illegal aliens.
California should do it. Illinois needs all the help it can get.
Posted by: M. Simon | Aug 27, 2008 9:08:45 PM
Why is it that the only image that comes to mind is a row of deck chairs on the Titanic, and some asshat in a white jacket telling everyone that "these are reserved for our first class passengers"? The cleverer folks have already taken to the lifeboats.
Posted by: Clioman | Aug 27, 2008 9:28:38 PM
I hope this initiative passes. Because after these "rich" people flee the state, the Dimocrats will take only one year to spend all the money. The next year they'll find out who's been paying the majority of taxes........because they will no longer be here.
Posted by: GarandFan | Aug 27, 2008 9:32:58 PM
It is often very difficult to tell the difference between satire and leftist thought.
Posted by: steve-o | Aug 27, 2008 9:33:03 PM
Quite a few years ago, the State of MN passed some truly oppressive taxes on businesses..to the point where businesses started moving out of state. So, the legislature, in it's infinite wisdom, decided it would enact a penalty on businesses that left. Businesses promptly moved out all sorts of manufacturing jobs and maintained a minimal "corporate headquarters" office.
Should this silly thing even come close to passing here in CA, Michigan's economy will look rosy by comparison.
Posted by: Blake | Aug 27, 2008 9:35:14 PM
Mark;
"Really? Since when have the ultra-rich led popular revolts? I think this tax idea sounds perfect. It would only affect the guys that vote for Bush and earn money off Haliberton."
You mean to *nobody* who didn't vote for Bush owns a small business that makes more than $150K/yr?
Pretty sad bunch.
Posted by: steveH | Aug 27, 2008 9:36:22 PM
"But even though it'll never affect me directly...."
Stop and think about what the long term consequences would be. If this measure passes, the resulting exit of wealthy people (and the large amount of state income tax that they pay) would create a deficit that would force the state to raise income taxes to some ungodly level like 45% for the rest of us "normal people" making over $50,000. The California economy would collapse.
This initiative is just another indication of how loony this state has become. California has become a fever swamp for Leftist Utopian fantasies. Reading the above comments, it appears that we now have people of moderate incomes thinking that they might support this. Voting for the "Socialists" and their initiatives is like slitting your own throat.
Posted by: Mace | Aug 27, 2008 9:37:11 PM
"Really? Since when have the ultra-rich led popular revolts? I think this tax idea sounds perfect. It would only affect the guys that vote for Bush and earn money off Haliberton. DO IT! In fact, MAKE IT FEDERAL POLICY!"
National Socialist German Workers' Party 1933
Please, If you love the world at all. For the good of humanity and to preserve the integrity of the gene pool. If you love the world at all. Kill yourself.
Posted by: ronsfi | Aug 27, 2008 9:39:33 PM
What states have taxing reciprocity with California? If you packed up and moved to Texas and just refused to pay California's exit-tax, what happens to you?
Posted by: dusty | Aug 27, 2008 9:41:24 PM
Why not just impose the wealth tax on the humongous non-profits like Stanford University? That is where these "activists" would get the most loot!
I bet Stanford has a $40 Billion endowment @ 55% wealth tax, the state would have another $22 Billion to waste.
Posted by: AJ Lynch | Aug 27, 2008 9:46:40 PM
By all means, your welcome to come live in sunny Florida.
Although I do have sympathy for your situation in leaving friends behind, I most certainly welcome you, your family and what would be your obvious asset to the community in creating jobs, spending and investing money in a state that appreciates all you do.
Ummm....on a side note, if your kids are of the mind that they "love" the idea of such insane thievery as mentioned in this article, leave them behind with a Xbox and 100 dollars a month allowance, you know...the world is their oyster and stuff....hope to see you soon.
Posted by: Drider | Aug 27, 2008 9:50:39 PM
Aside from the abstract concerns, and the concerns about pushing higher-earning people out of state, there is a huge flaw here.
How do you suppose California gets into its awful boom-n-bust state budget cycles? That's right, it's because the tax system is hugely progressive. Something like half the state budget depends on the tax income from the top 100,000 earners in California.
What that "feature" does is tremendously magnify the ups and downs of personal income. That math is simple. Here's an example with numbers. The exact numbers don't matter, because the effect works no matter what the numbers are, as long as the tax code is progressive (meaning the tax rate goes up with income). Suppose Joe earns $50,000 in an average year and pays a net 3% in taxes. That means he sends the state $1500. Next year, Joe has a better year and earns 10% more, or $55,000. But because California has such a progressive tax structure, his tax rate goes up to maybe 4%, so the state now gets a check for $2000 -- or 33% more! Wow! But then, the year after that Joe has a slightly worse year and earns 10% less, or $45,000. Again, because of progressivity, his tax rate slips down to maybe 2%, so the state now gets a check for only $1000, or 33% less! Disaster!
See how it works? As Joe's income goes up and down by 10%, the state's income goes up and down by 33%. The small fluctuations in Joe's income (and in every Californian's income) are transformed by the progressive tax structure into LARGE fluctuations in the state's income.
We all know the enormous harm that comes from a state budget that swings wildly from year to year. Can't realistically make multiyear committments, have to borrow like crazy in some years, have a tendency to waste money in others, and so forth. Many Californians complain about these issues.
But...amazingly, quite a number of them suggest the answer to this problem is to make the tax code MORE progressive (a.ka. "tax the rich"). As this initiative. Which, of course, would just make the problem much worse.
If you want to solve California's endless budget woes, there is only one solution: make the tax code LESS progressive. You need to find the extra money by (say) making all the folks who earn $20,000 or less -- and there are millions of them -- fork over an extra $100. It won't kill them, you know.
Posted by: Carl Pham | Aug 27, 2008 9:51:53 PM
It would single-handedly nuke Sand Hill Road and Silicon Valley. Probably put a huge crimp in the national economy as well as the industries moved. I kinda wonder where the software and computer would land. Probably Washington State and Austin; I can't see them moving to Las Vegas or Reno, entertaining though that would be. Malibu and Pebble Beach would be ghost towns.
Posted by: Ernst Blofeld | Aug 27, 2008 9:54:58 PM
Haven't most of Californias' ballot initiatives been struck down by the 9th Circus court? I really don't follow West Coast Politics, but it seems the peoples will is always overturned.
Posted by: hutch1200 | Aug 27, 2008 9:57:16 PM
"I think this tax idea sounds perfect. It would only affect the guys that vote for Bush and earn money off Haliberton."
It's "Halliburton", Merriam-Webster. Besides, are we to believe that the only people that earn money off of Halliburton ALL live in CA? Wow...I learned something from a barking moonbat!
OK, quick show of hands here for those of you who work: How many of you were hired by a poor person? That's what I thought.
Posted by: Crush Liberalism | Aug 27, 2008 10:02:03 PM
It is often very difficult to tell the difference between satire and leftist thought.
Posted by: steve-o | Aug 27, 2008 10:04:28 PM
Someone making $150,000 a year is "ultra-rich"...? That's practically the Bay Area poverty line.
Posted by: Vance | Aug 27, 2008 10:04:55 PM
Every time I head some California pol spouting off about the need for 'windfall' profit taxes on the petroleum industry I want to reply 'sure, but why stop there.' How about a nice big windfall profits tax on the entertainment industry? I mean, it's just entertainment, not some sort of basic commodity that everyone needs in order to survive; it's all pure luxury. Why should the fat cats get even fatter every time they manage to make a blockbuster movie or hit TV show? Tax them to the hilt, sauce for the goose and all that...
Posted by: ThomasD | Aug 27, 2008 10:12:17 PM
Actually, California effectively has a mostly flatish tax rate. It's just a high rate that kicks in at a low level. Income tax is 9.3% at over about $40-$45K/yr, with an extra 1% for incomes over a million a year. So from $45K/yr to $1M/yr you're effectively paying the same marginal rate.
The top 10% of the income tax payers had about half the income. This makes the state budget highly vulnerable to either changes in income in top earners or the top earners simply leaving the state. The initiative could easily drive out a few tens of thousands of people and put a huge dent in income tax receipts, not to mention the knock-on effects of the wealthy moving their business out of state.
Posted by: Ernst Blofeld | Aug 27, 2008 10:13:33 PM
At least the giant Michelle Obama posters staring down at us from every streetcorner and schoolroom will make us learn to love Big Brother. And his 55% tax rates.
Posted by: Jim | Aug 27, 2008 10:23:05 PM
Finally, get everyone with any money whatsoever out of California.
And the "wealth" tax? Brilliant.
You sir, are living in the home your family has owned for 3 generations; it's now valued at 15 million dollars, you owe the Government 7.5 million dollars by next month.
I'm sure the housing market can handle 80% of the homeowners in California trying to sell at once.
And you Ma'am own a business worth 2 billion dollars, please remit 1 billion to the state at once... yes, fire 500,000 people and close down tomorrow if you must to sell all the assets of your corporation.
Brilliant, that'll hurt the "rich", and everyone who works for them. And the property values of everyone who owns anything in California. And everyone who rents from people who own property in California... So, everyone.
Wait, I'm in Colorado, a "popular" destination for these idiots to come and ruin somewhere else... dammit.
Can we just close off the borders to California and make them stay there?
Oh and "even though it'll never affect me directly"... really?
You don't live in a house (if you rent, someone else owns that "wealth" so you still get affected when they sell), and you don't have a job (someone owns that place of business as "wealth" too, can they pay 50% of its worth)....
You're a homeless person posting on the free library computer? Well, there'll be a line to check your e-mail if this idiocy passes.
Posted by: Gekkobear | Aug 27, 2008 10:37:36 PM
What happens if you move to Texas and a kalifornia tax kollector shows up? Well, first when you get to Texas, we give you a gun and a concealed handgun license. Then if a Kalifornia tax collector shows up, which is not a "law enforcement officer" under Texas law, you shoot them if they threaten you.
Posted by: Fiftycal | Aug 27, 2008 10:53:10 PM
Ah hah ha hah this is brilliant, California would cease to exist in a matter of days.
If they ever do a remake of the first Superman movie, I'm sure Lex Luthor's going to be trying something like this.
Posted by: Mr L | Aug 27, 2008 11:07:16 PM
If they could just implement this on a national scale; it would be incredible! Completely wreck the economy, then step in and make everything state-run, all while blaming the "Big" industries for all the damage wrought.
Isn't that the point of all the revamped attempts to spread class envy, and levy charges of predatory lending and windfall profits, that are coming from the left these days?
Posted by: LaissezFaireJoe | Aug 27, 2008 11:12:15 PM
