Left-wing California appears eager to commit political and economic suicide.
Fox Business reports that California officials are considering raising taxes on the state’s richest inhabitants – again. If any properous citizens haven’t left yet, they will now.
Just introduced this past week by the California legislature, the bill would target those state residents who make more than $1 million per year.
The new legislation puts forth a three-tier system. Those making more than $1 million per year would have to pay an additional 1 percent in taxes, those making more than $2 million a year, an additional 3 percent, and those making more than $5 million a year, an additional 3.5 percent.
These increases would also apply to capital gains. If passed, it would be applied retroactively, starting with January 2020.
The impetus behind the legislation appears to be a number of budget problems, some of which were caused by the coronavirus.
Accordingly, the revenue that would be generated by these new taxes is expected to simply go to various government services, including education.
Many local governments are considering similar legislation to that of California, in the wake of the coronavirus. Up for consideration are increases in property taxes, in payroll taxes, and, as we have seen, in taxes on the wealthy.
Regardless of one’s political affiliation, no one likes the idea of raising taxes. To most, it already feels as though the government is taking an unfair amount of his or her income. Accordingly, what lawmakers have to consider here, particularly with a tax on the wealthy, are the consequences.
California, for example, already is taxing the wealthy at some of the highest rates in the country. According to one report, the bill introduced by the California legislature would raise the combined state and federal income tax rate of those making more than $5 million to 54 percent. 54 percent!
It would thus not be surprising if many of these rich people, upon this bill being passed, decide to take their money elsewhere – likely to a different state or even country that allows them to keep more of what they have earned. As they leave, so to will go the state’s revenue.
We’ll have to see how this bill progresses.