California Democrats Eye Millionaire Tax Hike to Solve Budget Woes

If AB 1253 is passed, the rich in California will pay at least 54% of their income to either The State of California or the Federal government.  In common sense terms, when you give more than 50% of your income to government, which is called SLAVERY.

More importantly, the goal is to transfer $6-8 million a year from the private job creating sector to the government, job killing sector.  Of course this will not happen.  The very rich can live in Texas, Florida or Nevada and save the 16% California proposed tax rate.

“The proposal calls for a tiered tax increase on annual incomes over $1 million, $2 million and $5 million, with the first bracket paying an additional 1%, second 3% and the highest a 3.5% hike. The authors predict AB 1253 would pull $6-8 billion in new taxes from the top 0.5% of California taxpayers, which already contribute 40% of the state’s income tax haul.

If approved, the income tax rate for Californians making over $5 million would jump from 13.3% to 16.8%. The states with the highest personal income tax rate after California are Hawaii at 11% and Oregon 9.9%.

You can’t pray, you can’t work, you must join union, your kids can not go to school—but government will take your money while refusing to protect you from criminals.  Sound like Stalinist Soviet Union, not the formerly free State of California.

California Democrats Eye Millionaire Tax Hike to Solve Budget Woes

NICK CAHILL, Courthousenews,  8/3/20   

SACRAMENTO, Calif. (CN) — Scheming a cure for a coronavirus-induced recession, California lawmakers are turning to the state’s cache of millionaires and billionaires for budget relief.

Back from an extended summer recess, a group of influential Democratic lawmakers are rushing to raise taxes on California’s wealthiest earners before an Aug. 31 deadline. They claim hiking what is already the nation’s highest state tax rate for millionaires will immediately line the state’s depleted coffers with a multibillion-dollar boost.

With historic unemployment rates and strained local governments struggling to provide services, Assemblymember Miguel Santiago says the rich can afford to pick up the slack.

“We’re going to ask those Californians who are doing very well to pay their fair share,” said Santiago, D-Los Angeles.

A group of Democrats from both chambers conceived Assembly Bill 1253 last month while the Legislature was on recess, debuting it Monday before a Senate finance committee.

The proposal calls for a tiered tax increase on annual incomes over $1 million, $2 million and $5 million, with the first bracket paying an additional 1%, second 3% and the highest a 3.5% hike. The authors predict AB 1253 would pull $6-8 billion in new taxes from the top 0.5% of California taxpayers, which already contribute 40% of the state’s income tax haul.

If approved, the income tax rate for Californians making over $5 million would jump from 13.3% to 16.8%. The states with the highest personal income tax rate after California are Hawaii at 11% and Oregon 9.9%.

California’s list of top earners is dominated by tech industry titans like Larry Ellison, Mark Zuckerberg, Larry Page and Elon Musk, who have an estimated combined net worth of nearly $200 billion.

More than a dozen Democrats have signed on as co-authors, including Assemblymembers Lorena Gonzalez, D-San Diego, and Mark Stone, D-Santa Cruz, along with Senators Nancy Skinner, D-Berkeley, and Scott Wiener, D-San Francisco. As currently written, the bill would be retroactive to Jan. 1 and the tax increase would become permanent.

Lawmakers are scrambling to buffer the blow of the recently passed budget, which included major cuts for education and a variety of social programs. While Democrats are hoping for more federal relief to backfill the cuts, they are proposing myriad options to fill the state’s estimated $54 billion deficit. 

Last week Democratic leaders endorsed a sweeping $100 billion package that expands unemployment insurance, eviction and foreclosure protections and small business relief. Unlike AB 1253, proponents of the package say they can drum up the cash without raising taxes. 

But the millionaire tax hike faces a tougher path than the broader $100 billion package, as it requires two-thirds approval in both the Senate and Assembly. Democrats hold supermajorities in both bodies, but Monday’s hearing indicated they won’t be able to count on much, if any Republican support.

State Senator John Moorlach, R-Orange County, said he was concerned the bill would encourage wealthy Californians to head for neighboring states with lower income taxes and disputed whether it could actually produce a $6 billion to 8 billion haul. He claimed a similar effort in Connecticut didn’t provide the intended budgetary aid.

“If you have people move, it gets real interesting,” said Moorlach, formerly Orange County’s treasurer-tax collector.

Rather than a surefire win for cash-strapped schools and local governments, critics argue raising taxes during a recession could lead to a mass exodus of the state’s richest residents and business owners.

The California Chamber of Commerce has listed AB 1253 on its “Job Killer List,” claiming the higher tax rate could make the state less attractive for businesses looking to relocate.

“At a time when the state and country are in an economic freefall, AB 1253would hurt California businesses, employees and consumers and encourage residents to leave this state, along with their tax revenue,” the chamber wrote in an opposition letter. “The bill will depress business growth and state revenue in California and amplify an already historic crisis.”

To counter the business group’s opposition, the Democrats have courted a deep bench of supporters, including labor unions, educators and environmental groups. California Federation of Teachers, Service Employees International Union California and Sierra Club submitted support letters ahead of Monday’s hearing.

Wiener, who sits on the committee, said past tax increases aimed at California millionaires didn’t prevent the state from building the world’s fifth largest economy pre-Covid-19. Besides, Wiener noted, the tax breaks approved by President Donald Trump have greatly benefited wealthy residents and business owners.

“I just don’t buy into this notion that the sky is going to fall if we make this tax change, particularly given what Trump, McConnell and company rammed through Congress a few years ago,” Wiener said.

The committee spent more than an hour discussing the potential tax hike but did not ultimately vote on the bill. However, Santiago’s measure is still alive and could be taken up by the Senate later this month.

The proponents pointed to a recent report estimating the collective wealth of California’s 154 billionaires has swelled $175 billion during the pandemic as proof that the Golden State’s income equality gap continues to grow.

“The rich are now piling up income they cannot spend, therefore an extra tax would not cut their spending,” testified Emmanuel Saez, director of the Center for Equitable Growth at the University of California, Berkeley.

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.

Comments

  1. ExCaliExpat says

    “We’re going to ask those Californians who are doing very well to pay their fair share,” said Santiago, D-Los Angeles.”

    BS, Santiago! You’re not going to ASK anything, you’re going to demand it, and don’t be surprised when your donor class bails on you for lower taxed states…then what are you going to do???

    How effing stupid ARE these Democrats??? They make emotional appeals to low information voters, then they make bad economic policies…

    Of course they have their useful idiot union support, filled with all kinds of money-grubbing parasites, looking for an easy road for “fairness”…

    They all sound like a bunch of second graders whining about fairness…..

  2. Pay their fair share????????

    Really???

    Who do the bleed heart Marxist Democrats think give money to non-profits???

    This is amazing that anyone that calls themselves Democrat would give excuse for confiscation of wealth and property. (Hey Silicon you think intellectual property is far behind?)

    This is exactly the same speak that came out of Venezuela. It swayed the people. It was and is the same stupid junk. We are not millionaires and as a result no one should be allowed to me “those types”…….

    It is envy pure and simple. It is divide and conquer. It is what dictatorships have been built on for thousands of years. Do you think there is any mistake that it is the Mexican and Black communities that are the target?

    As a group they have the highest crime rates, the highest shooting rates, and the lowest education rates.

    They blame it on the Whites… Hummmm why are Asians as a general group so successful?

    Getting it yet? Stupid enough to vote for Democrats? GEEZ

  3. John Steele says

    Pay their fair share. Well these are the idiots pushing for chaos and revolution in my opinion and stick to them. Of course they will move Dahhh.
    Looking forward to the massive exodus of the uber rich leftist.

  4. And all the people left on California will be the middle to low income and homeless. Do you actually think the rich are going to stay in California? Then you’re some kind of stupid. This pandemic we’re on is teaching everyone you do not have to be in the same city, county, state, to conduct business. Only those who cannot afford to leave or until they have a job to leave will be left

  5. William Hicks says

    What the “RICH SOCIALISTS” don’t understand is that even if they escape from california to a republican run State, they will pay this tax back to January 2020.

    YES, THERE ARE CONSEQUENCES TO ELECTIONS.

  6. Rico Lagattuta says

    This has nothing to do with getting the rich to pay their fair share. The rich already have dodges in place to avoid taxes. This is a ploy to make the middle class and the less fortunate Californians think the Democratic Party is looking out for them to secure their loyalty. Once the loyalty is secured the Dems will get the masses to support anyghing thay do to all and everyone.

    • The rich have trusts and diversion of money so they pay no tax. Watch out for the
      middle class as they will be the one paying 54% of their money to taxes.
      Remember in the first stimulus package Pelosi was able to get $25million to pay
      their salaries and expenses. Who paid that, the unemployed, poor and middle class.
      People do not read or understand what is happening to their lives, but you can bet your last
      dollar they will grumble when they don’t have enough money to buy medication because
      they are paying taxes.

  7. William Hicks says

    This is the typical way leftist do business. THEY PIT ONE GROUP AGAINST ANOTHER. It’s always the rich against the poor and the poor suck it up. Just one question for the poor…..HAVE THE POOR IMPROVED THEIR CONDITION AT THE EXPENSE OF THE RICH, EVER?

  8. The good news is that the millionaires have their corporate jets fueled and ready to go to greener pastures.
    Socialism only works if you can convince the producers to give everything to the nonproducers.
    Hasn’t worked so far…..

  9. The communist democrat party wants to accelerate their pace towards oblivion. They are like their media,long on phony.

  10. Rottweiler says

    Stupid is as Stupid Does, more incentive to leave the Land of Oz, where these thugs run everything but do it worse than anyone else could. Dysfunction is their name and ANTIFA is the Democrats. I can only hope they macrophage themselves. Do we see a pattern here? For the slow zebras who only work, if you can call it that, three days a week do they think they are not eligible? They make 6 figures now, and with all of their accumulated wealth they should be the first and only people taxed. They are too busy being corrupt and allowing loopholes for themselves. What a ruinous bunch of waste of skin people. You have city council who want to defund the police, chasing them to early retirement, putting their lives in danger with less employees, pandering to BLM and then they want them to write citations for non-mask wearers. Another brilliant idea let out murderers, commuting their sentence, and pedophiles only to have them repeat their crimes a few weeks into freedom. Who are these people? I say put all of the released prisoners in Newsom’s Mansion.

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