Wealth Tax: Why Special Control Shares Don’t Qualify as “Publicly Traded” The Act exempts “publicly traded assets” from the Voting Floor Rule. But a publicly traded asset is defined as one traded on an exchange, a secondary market with frequently updated prices, or an electronic matching platform. Special control shares can’t be listed on any […]

The Voting Floor Rule Is A Hidden Trap and Tech Founders Are in the Crosshairs For non-publicly-traded interests in business entities that carry voting or control rights, the Act creates a statutory presumption: your ownership percentage for wealth tax purposes is legally deemed to be no less than your percentage of overall voting control. In a […]

The Three Asset Tracks of the Wealth Tax The Act doesn’t use one valuation method for everything. It separates wealth into three categories: (1) publicly traded assets, (2) sole proprietorships, and (3) all other interests in business entities — including equity, debt, and contractual rights. Each track has different valuation rules. The distinctions matter enormously […]

The Wealth Tax: Taxation of Trusts If a billionaire is the grantor of a trust under California law, the trust assets are attributed directly to that billionaire for wealth tax purposes. The trust is looked through entirely — its assets are treated as if owned directly by the grantor. No planning benefit from a grantor […]

Installment Payments: Help or Illusion? Taxpayers who owe the wealth tax can elect to pay in five equal annual installments rather than all at once. That sounds helpful — until you see the 7.5% annual deferral charge on the unpaid balance. This charge is non-deductible. At 7.5%, the true cost of spreading a $50 million […]

The 5% Rate and the Phase-In At exactly $1 billion in net worth, no wealth tax is due. However, the tax kicks in gradually for anything above that: For every $2 million above $1 billion, the rate phases in by 0.1 percentage point — 50 increments of $2 million — until the full 5% rate applies at […]

The “Billionaire Wealth Tax” Is Really an Aggressive Expansion of California’s Property Tax The proponents of this tax go to great lengths to avoid calling it a property tax. Instead, they refer to it as an “excise tax . . . on the activity of sustaining excessive accumulation of wealth.” This is disingenuous because the […]

The “One-Time” Wealth Tax Is Not Intended to Be “One-Time.” Thank you CalTax Foundation for hosting me and co-panelist Andrew Wilford today to discuss California residency issues, with an emphasis on California Initiative No. 25-0024, dubbed the “2026 Billionaire Tax Act.” https://lnkd.in/gF6yeQus Although proponents call this a “one-time” tax, that is misleading. The text of the initiative […]

What is the California Billionaire Tax Act? California voters are being asked to approve Initiative No. 25-0024, dubbed the “2026 Billionaire Tax Act.” If passed, it would impose a one-time 5% wealth tax on any individual or applicable trust with a net worth of $1 billion or more as of December 31, 2026. This is […]