Progressive lawmakers in California are pushing for an ambitious wealth tax on the ultra-rich, but moderate Democrats have chafed at the idea.
Assembly Bill 310, dubbed The California Tax on Extreme Wealth, would impose an annual 1% tax on net worth over $50 million, and a 1.5% tax on net worth over $1 billion. It would also require a constitutional amendment to increase the state’s current wealth tax cap.
Assemblywoman Cottie Petrie-Norris (D–Laguna Beach) is one of several moderate Democrats who say the proposal is unworkable.
“There is a narrative that the rich don’t pay their fair share of taxes, but in California, largely they do,” she said.
She notes that nearly half of California’s income tax revenue comes from the top 1% of earners.
“That is billions of dollars for schools, for health care — for programs that help all Californians,” she added.
Moderate Democrats say imposing a wealth tax could drive out ultra-rich residents, and as a result drive down tax revenues. They point to high-profile figures who decamped from the Golden State in recent months, including Elon Musk. However, it appears he won’t be moving Tesla out of state.