Wednesday, November 10, 2021
Brian D. Galle (Georgetown; Google Scholar), David Gamage (Indiana; Google Scholar), Emmanuel Saez (UC-Berkeley; Google Scholar) & Darien Shanske (UC-Davis; Google Scholar), The California Tax on Extreme Wealth (ACA 8 & AB 310): Revenue, Economic, and Constitutional Analysis:
This white paper report provides Revenue, Economic, and Constitutional Analysis of the proposed California Tax on Extreme Wealth (ACA 8 & AB 310) and also a Plain-English Summary Outline of its major provisions.
The California Tax on Extreme Wealth (ACA 8 & AB 310) imposes an annual tax of 1% on extreme wealth, defined as wealth in excess of $50 million per taxpayer. It also adds graduation with an extra .5% tax rate on wealth above $1 billion. We estimate that about 15,000 CA families (top .07% richest families) would be liable for the tax on extreme wealth and that the tax would raise about $22.3 billion/year (starting in 2023 based on end of year 2022 wealth).
About half of the revenue would be raised from the 170 or so billionaires in the state. The wealth tax would increase tax revenue, improve tax justice, and help reduce wealth concentration.