A new proposal in California looks to target the wealthiest residents pile on to what is already the highest taxation rate in the country by imposing a tax based on net worth — the first in the nation.
“The California Wealth Tax would add critically needed revenue for California by creating a more equitable tax structure,” said Democratic California Assemblyman Rob Bonta, one of the lawmakers who introduced the bill. “Families are hurting right now. COVID-19 has only made matters worse. In times of crisis, all Californians must step up and contribute their fair share. Asking these well-resourced Californians to give a little more to keep our people working and support our most vulnerable is the right thing to do.”
The proposal would impose a 0.4% tax on a person’s net worth that exceeds $30 million, which a press release on Bonta’s website says accounts for 30,400 residents. Addressing the concern that wealthy Californians would move out of state in order to avoid this, the bill calls for the continued application of the tax on people based on how many of the previous 10 years they lived in the state, which would decrease over time.
Similarly, new residents who earned their wealth prior to moving to California would have to pay based on how long they have been in the state, which would continue to increase over the next 10 years.
This November, Californians will vote on whether to strip decades-old protections from commercial and industrial properties. Since 1978, tax reassessments to the fair market value of California property have only been done when the property is sold or there is new construction. Otherwise, assessments are capped at increases of 2% a year. The new measure, if approved, would make exceptions from this for industrial and non-agricultural commercial property, requiring them to be reassessed to fair market value at least every three years.
New Jersey Gov. Phil Murphy is also looking to go after the wealthy with a plan that includes a millionaires tax that was rise to 10.75% on gross income between $1 million $5 million, according to NJ.com.
Since Murphy took office in 2018, he has failed to pass such a tax on two occasions.
Murphy unveiled his fiscal 2021 budget on Tuesday that aims to help plug a nearly $6 billion budget hole through a variety of revenue-raising measures.
“This budget proposal is not simply about getting New Jersey back to where it used to be, but moving forward to where we need to be by building a new economy that grows our middle class and works for every single family, while asking the wealthiest among us to pay their fair share in taxes,” Murphy said in a press release.
Murphy is also looking to raise handgun permit fees by $48 and firearm identification card fees by $95.
Chicago Mayor Lori Lightfoot is expected to release her budget forecast for 2021 next week. In June, she said that property tax increases were “on the table” to help address budgetary problems that include a 2020 shortfall that at the time was projected to be nearly $700 million.
In Seattle, a recent measure approved by the city council will add a tax on companies with at least $7 million in annual payroll. The “JumpStart Seattle” tax will tax businesses up to 2.4% on Seattle-based employees who earn more than $150,000. The bill specifically references emergency conditions imposed by the pandemic.
Meanwhile in New York, a group headed by Democratic former Gov. David Paterson is opposing tax hikes. The Campaign for New York’s Future claims that there are better ways to improve the state’s financial situation than merely taxing the rich.
The group is looking to start grant programs for female- and minority-owned businesses, the Wall Street Journal reported, and suggested that in New York City, revenue could be raised by blocking certain streets to traffic and leasing space to restaurants and stores, who could use the space to provide outdoor service.
New York is not the only place that is seeing pushback against higher taxes. In Nashville, Tenn., where there was a property tax hike of 34%, 20,000 people signed a petition that went to the Metro Clerk’s office on Wednesday that calls for putting the matter on a special election ballot, according to local WKRN.
In Seattle, there is now opposition to a recent measure approved by the city council that will add a tax on companies with at least $7 million in annual payroll. The “JumpStart Seattle” tax will tax businesses up to 2.4% on Seattle-based employees who earn more than $150,000. The bill specifically references emergency conditions imposed by the pandemic.
Organizations including the Downtown Seattle Association are now asking the council to reconsider the tax. This comes as Amazon began looking to move employees out of the city.
“We respectfully urge you to reconsider your decision to impose this tax during the most severe economic crisis to hit Seattle in nearly 100 years,” the DSA and other groups said in a letter dated August 14. “With the expiration of federal PPP loans — and continued restrictions on mobility and economic activity in King County — Seattle companies face a scary economic cliff and many unknowns.”
FOX Business’ Brittany De Lea contributed to this report.