California Democrats Propose Wealth Tax for Billionaires, Even Those Who Moved Out of State

Progressive Democrats in California are pushing for a new wealth tax that could impact residents with a net worth exceeding $1 billion. The proposal would levy an additional 1.5% tax on the state’s wealthiest individuals, even those who have recently moved out of California.

Joe Lonsdale, managing partner of 8VC and a former California resident who recently relocated to Texas, criticized the tax proposal as “fundamentally un-American” and labeled California as a “total mess.” Lonsdale highlighted the state’s mismanagement and high tax burden on the top 1%, emphasizing that the proposed wealth tax is excessive and unnecessary.

If approved, the wealth tax could take effect as early as January 2024, with the threshold for taxation dropping by 2026. Individuals with a worldwide net worth exceeding $50 million would face a 1% annual tax on wealth, while billionaires would be subject to a 1.5% tax.

Lonsdale cited several reasons for leaving California, including the high cost of living, difficulty in hiring employees, and an unhealthy environment for raising children. He also noted that the cultural shift in Silicon Valley has allowed other states, like Texas, to attract technology companies and talent, leading to a redistribution of U.S. technology profits.

The debate over the wealth tax comes amidst a growing trend of companies and individuals leaving California for states with lower taxes and a more business-friendly environment. Lonsdale’s perspective sheds light on the challenges faced by wealthy residents in high-tax states and the potential consequences of imposing additional taxes on the rich.

As California Democrats continue to push for the wealth tax, the impact on the state’s economy and business landscape remains uncertain. The ongoing exodus of companies and individuals from California raises questions about the long-term sustainability of the state’s tax policies and economic competitiveness.