In The News
California Proposes New Wealth Tax
Despite unexpectedly high personal income tax receipts exceeding forecasts by $9 billion for the first seven months of California’s 2022 fiscal year, Assembly Bill 2289 proposes raising even more revenue for the State, through a brand-new annual wealth tax. This brand-new levy would apply as follows:
1.5 percent on certain assets exceeding $1 billion ($500 million for married filing separate individuals)
starting January 1, 2023, and
1.0 percent on certain assets exceeding $50 million ($25 million for married filing separate individuals)
starting January 1, 2025.
The concept of a wealth tax in California is not a new one. This is the third such proposal in California, the last of which died without a vote by any body of the Legislature. But the very idea of a property tax on wealth has led to an unprecedented exodus of high-net-worth individuals from California. Whether the wealth tax will pass, how it would be applied, and whether it even passes legal muster is unclear. What is clear is that California continues to press for tax increases on all fronts—income, sales, property, excise, and business taxes—undeterred by the continued departure of individuals and businesses.
If you have any questions about California’s current wealth tax proposal, breaking residency with California for tax purposes, or moving your business out of California, please contact a member of our team.