They bizarrely give a tax credit for any net-worth tax paid to another state. So, if NY passed an identical tax and you paid it to NY, your liability in CA would be zero. But wait! I thought the tax was for the "benefit" of "excess wealth in this state"! 5/
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More fun! They would give a credit against the wealth tax for property taxes paid on real estate. In other words, if your assets are all real estate - regardless of how much you have - you'd have no liability. 6/
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Observant readers will again note the giveaway to landlords and real estate funds, as well as say, wealthy actors. 7/
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But wait, there's more! The tax is assessed based on the duration of residency in CA in the 10 years preceding each taxable year. So living in the state is now a 10-year tax albatross around your neck. And it applies RETROACTIVELY. 8/
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"If apportionment provisions of this part do not fairly represent the extent of the benefit granted to the taxpayer to accumulate extreme wealth in this state, then the taxpayer may petition for...the use of an alternative apportionment method." 9/
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The above is to say, if their calculations of your liability aren't "fair" (by what standard?) the Franchise Tax Board can...make something up. Wtaf?! 10/
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"The Franchise Tax Board shall implement this subdivision (regarding understatements of liability) in a reasonable manner." Well, nothing to worry about, then! 11/
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Did I mention the baseline expectation, before any tax is actually assessed, is an annual reporting of *every* asset owned by the taxpayer, on a global basis? Imagine the invasiveness and compliance burden of an annual tax audit. 12/
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TL;DR: the proposed CA wealth tax is a nightmare whose mere proposal is a 5-alarm fire. Right now it's "only" individuals with net worth of $15mm+ (that is, many small business owners and early startup employees). That. Noose. Will. Tighten. Get out. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB2088 …
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Replying to @asglidden
Remeber that the California legislature also approved a Conistitional referendum to remove the equal protection clause form the State Constitution. California is a hell scape.
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the only saving grace is that the state is going to implode quickly just hope it doesnt metastasize before then
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