Since the beginning of the pandemic last March, while our families and our communities have suffered gut-wrenching pain and loss, billionaires in our state alone have increased their wealth by over half a trillion dollars.
And their numbers and their extreme wealth just keep on growing. In March 2020, just as COVID began, there were 154 billionaires in California – with a total wealth of $688.3 billion. In January 2021, there were 169 billionaires in California – with a total wealth of more than $1.2 trillion.
On March 15, Assemblymember Alex Lee introduced a new legislative package, The California Tax on Extreme Wealth. Sponsored by CFT, the package would implement a 1% tax on wealth in excess of $50 million per household in our state, with an additional 0.5% on wealth in excess of a billion dollars, to raise approximately $22 billion a year to fund our recovery. It asks those who have made so much to contribute a small percentage of their extreme wealth so that our families and our communities can recover from the pandemic and can rebuild their lives.
Sign the pledge in support of the California Tax on Extreme Wealth
Are you ready to stand with other Californians in support of the tax on extreme wealth?
Frequently Asked Questions
Why is this a constitutional amendment?
The California Constitution currently limits the tax rate to 0.4%. Therefore, it’s not possible to go beyond 0.4% without amending the Constitution. If the proposal is approved by the Legislature, voters will decide in 2022.
Does the tax on extreme wealth affect Proposition 13 tax limitations?
No, the wealth tax excludes real estate property.
Won’t the wealthy be able to hide their wealth and evade the tax?
The bill includes a number of strong provisions to make evasion quite difficult. The wealth tax base is comprehensive with no exclusions. Taxable wealth includes worldwide assets. Therefore, California residents cannot avoid the wealth tax by moving their assets outside of California.
Will ultra-wealthy residents leave the state?
Millionaires actually have lower migration rates than the general population. The wealth tax bill is also structured in such a way that California wealthy residents who leave still have to pay the tax on extreme wealth on a fraction of their wealth for up to four years: they pay tax on 75% of their wealth the year after they leave, on 50% two years after they’ve left, 25% three years after they’ve left, and 0% only four years or more after they’ve left.
Will entrepreneurs be discouraged?
The wealth tax allows entrepreneurs whose wealth is tied up in a private business (e.g., a very successful start-up whose stock does not trade publicly yet) to defer payment so that the wealth tax does not interfere with business decisions.
Robert Reich explains why we need an extreme wealth tax
Watch Robert Reich explain why we must tax wealthy estates in order to reduce inequality.