Wealth tax is dangerous to the economic present and future of states which implement it. States know their revenue streams have taken a hit. In New Hampshire, the shortfall will be half to three-quarters of a billion dollars. The upcoming legislative session will be a test.
In California, their Assembly will consider legislation to address their shortfall. Some of the legislation has the potential to irreparably damage the state’s economic future. One such bill is an Islamic style wealth tax.
The California bill would be the first wealth tax in the nation. It imposes a 0.4% tax on net worth for individuals and joint filers worth over $30 million. AB 2088 would soak the rich by raising the top income tax rate from 13.3% to 16.8%.
Supporters claim it “would hit about 30,400 California residents and raise an estimated $7.5 billion for the general fund.” They have not done their homework. A wealth tax comes mired with legal complications. It has failed everywhere it has been tried.
Wealth tax versus the Keith Richards rule
California should be acutely aware of the consequences of tax policies targeting the wealthy. Remember when the Rolling Stones fled the United Kingdom for France in 1971? It wasn’t that they weren’t British or patriotic. Rather, they declined to give up their wealth to the government.
Keith Richards told the New Yorker, “The whole business thing is predicated a lot on the tax laws… We left, and they lost out. No taxes at all.”
What policymakers fail to appreciate with wealth tax is: The wealthy have the resources to simply pick up and move. The Rolling Stones didn’t need to work in the UK. When the government soaked the rich, it increased the cost for them to live there.
Hopping across the Channel to save millions of dollars was a no brainer. This phenomenon is already occurring across California. The state has been raising taxes in recent years. Those with money are fleeing. They are leaving the poor and the poop-filled cities and their shi**y ideas behind.
