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States are experimenting for a new tax that probably won't hit you -- but if it does, watch out!
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Laboratories of Democracy

Now states are becoming wealth tax-curious, too. California Assembly Bill 2088 proposed a constitutionally dubious scheme to filch 0.4% of global wealth over $30 million. But it would kick in after you spend just 60 days per year in the state and follow you for 10 years after you leave. The Wall Street Journal mocked it as a plan to “chase away the rich, then keep stalking them,” and likened it to the Eagles’ hit “Hotel California” (“You can check out any time you like, but you can never leave”).

Not to be outdone, New York legislators have proposed a “mark-to-market” tax clipping billionaires at the state’s highest 8.82% rate on their paper gains: no sale needed. And Washington state legislators have proposed nicking 1% of assets above $1 billion with a tax that would hit essentially just four people (Jeff Bezos, his ex-wife Mackenzie, Bill Gates, and Steve Ballmer).

Here’s the problem with mad scientists cooking up new taxes in their state revenue labs. We have 50 of them — and residents who don’t like playing guinea pig can just pack up and leave. Right now, California loses almost 2,000 people every day. New York loses tens of thousands to Florida every year. (They call it “retiring.”) And really, who wouldn’t want to trade slushy New York winters for sunny tax-free beaches, especially when you start getting old enough that your hips can predict the weather?

We’ll finish with the usual reminder that we’re keeping an eye out here so you don’t have to. But if you’re the cautious type, you might just want to get that Napa winery tour out of the way sooner rather than later!

the cautious type, you might just want to get that Napa winery tour out of the way sooner rather than later!

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Now states are becoming wealth tax-curious, too. California Assembly Bill 2088 proposed a constitutionally dubious scheme to filch 0.4% of global wealth over $30 million. But it would kick in after you spend just 60 days per year in the state and follow you for 10 years after you leave. The Wall Street Journal mocked it as a plan to “chase away the rich, then keep stalking them,” and likened it to the Eagles’ hit “Hotel California” (“You can check out any time you like, but you can never leave”).

Not to be outdone, New York legislators have proposed a “mark-to-market” tax clipping billionaires at the state’s highest 8.82% rate on their paper gains: no sale needed. And Washington state legislators have proposed nicking 1% of assets above $1 billion with a tax that would hit essentially just four people (Jeff Bezos, his ex-wife Mackenzie, Bill Gates, and Steve Ballmer).

Here’s the problem with mad scientists cooking up new taxes in their state revenue labs. We have 50 of them — and residents who don’t like playing guinea pig can just pack up and leave. Right now, California loses almost 2,000 people every day. New York loses tens of thousands to Florida every year. (They call it “retiring.”) And really, who wouldn’t want to trade slushy New York winters for sunny tax-free beaches, especially when you start getting old enough that your hips can predict the weather?

We’ll finish with the usual reminder that we’re keeping an eye out here so you don’t have to. But if you’re the cautious type, you might just want to get that Napa winery tour out of the way sooner rather than later!

Tax Beat is a weekly column with a unique angle: making taxes entertaining. Every week Ed explores the humorous aspects of taxes and current events. 

Edward Lyon

Edward Lyon

Edward A. Lyon is CEO of the Tax Master Network, where he's coached tax professionals to add planning and financial services to their business since 2005. Go here to join the network. Go here to upgrade your membership or discuss opportunities in financial services.
Edward Lyon

Edward Lyon

Edward A. Lyon is CEO of the Tax Master Network, where he's coached tax professionals to add planning and financial services to their business since 2005. Go here to join the network. Go here to upgrade your membership or discuss opportunities in financial services.

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