Professor Bainbridge...on law, politics, religion, culture & food

Making California Even Less Business Friendly

Paul Caron:

A California activist is trying to gather the 694,354 signatures needed to place a tax initiative on the ballot that would:

• Impose a new 35% income surtax (in addition to federal taxes and the existing 10.3% top state rate)—17.5% (on all of the taxpayer’s income) when income exceeds $150,000 (single)/$250,000 (joint), and an additional 17.5% (again, on all of the taxpayer’s income) when income exceeds $350,000 (single)/$500,000 (joint).
• Impose a one-time 55% wealth tax on assets exceeding $20 million held by a California resident or held in California by nonresident.
• Impose an exit tax of between 36.5% to 54.3% on both income and unrealized appreciation in asset values over $5 million when a resident dies or leaves California.

What a great idea. Since many small business owners pay business taxes via the income tax rather than corporate tax, this tax would mainly hit the most class of Californians who create most of the new jobs in the state. It also would serve as a huge deterrent to out of state entrepreneurs considering moving to California.

According to the Secretary of State’s office, the proponent is some loon named Paul McCauley. Never heard of him. Hope never to hear of him again.