California Democrats Take Another Shot at ‘Millionaires Tax’ – Courthouse News Service
Lawmakers are proposing a new tax on California’s wealthiest residents, though a similar measure failed last year.
SACRAMENTO, Calif. (CN) — California lawmakers are reviving an effort to raise taxes on its highest earners, introducing a new bill that will impose tiered tax increases on residents who make annual incomes of over $1 million.
“There is a desperate need to attack the issue of income inequality by making sure those who are rich pay their fair share,” Assemblymember Miguel Santiago said at a press conference Wednesday unveiling Assembly Bill 1253.
If approved, the income tax rate for Californians making over $1 million would increase from 13.3% to 14.3%. Those who earn more will see a greater percentage hike.
“If you’re making $2 million, we would increase it by 3%. That means from 13.3% to 16.3%. If you’re making over $5 million, it would be by 3.5%, which would increase it from 13.3% to 16.8%,” the Democrat from Los Angeles explained.
If this sounds familiar, that’s because Santiago and a cohort of progressive Democrats tried to get the same tax through the Legislature last year.
“We introduced this last year as a conversation starter,” Santiago said.
But the conversation died in the Senate last fall, never reaching a floor vote despite Democratic control of both legislative chambers. Governor Gavin Newsom also opposed it, along with another bill that would impose an annual 0.4% tax on Californians with a net worth of over $30 million.
“In a global, mobile economy, now is not the time for the kind of state tax increases on income we saw proposed at the end of this legislative session and I will not sign such proposals into law,’ Newsom said at the time.
It is by “sheer coincidence,” Santiago said Wednesday, that the new proposal shares the same number as last year’s bill. “It was not planned, but it was meant to be because this conservation is meant to be continued.”
Newsom had no comment on the current wealth tax bill, but his office referred Courthouse News to his remarks on last year’s legislation. Speaking to reporters in August 2020, Newsom cautioned lawmakers that raising taxes might cause some residents to flee the state, taking their wealth with them.
“I think, at a state level… you have to be careful about taking national constructs, which may be appropriate for a nation, and having state-by-state constructs, until and unless you consider the impacts of those decisions on your ability to retain and attract talent, individuals, companies and your competitiveness. Everything needs to be considered in that light,” he said. ” And I would encourage those that are making proposals in this space to consider those impacts in relationship to what may or may not be happening in other parts of this nation.”
The new effort is backed by the California Teachers Association, as well as progressive advocacy groups like Courage California, Patriotic Millionaires, and Aspiration — a “socially conscious financial company.”