ALRP EVERYBODY. AND GOOD
AFTERNOON. THANK YOU FOR BEING
HERE ON TIME, MR LEE AND, UM
WELCOME TO THIS HEARING OF THE
ASSEMBLY COMMITTEE ON REVENUE
AND TAXATION BEFORE WE TAKE UP
OUR AGENDA TODAY, I WOULD LIKE
TO WELCOME ASSEMBLYMEMBER'S
GIBSON, WHO I'M SURE IS ON HIS
WAY. HE IS THE NEWEST MEMBER OF
THE COMMITTEE. ADDITIONALLY I
WOULD LIKE TO WELCOME
ASSEMBLYMEMBER'S JOE PATTERSON,
WHO WILL BE FILLING IN TODAY FOR
ASSEMBLYMEMBER'S TA. FOR TODAY'S
HEARING ONLY PURSUANT TO OUR
COMMITTEE RULES BUILDS WITH A
FISCAL IMPACT OF PLUS OR MINUS
$150,000 WILL BE REFERRED TO OUR
SUSPENSE FILE. AT THE END OF
THIS PRESENTATION TO COMPLY WITH
LEGISLATIVE DEADLINES, WE WILL
BE TAKING UP TO SET THE SUSPENSE
FILE AT THE END OF THIS HEARING.
WE HAVE ONE ITEM ON OUR AGENDA
TODAY, MAYBE 259 BY
ASSEMBLYMEMBER'S LEE. AND WE ARE
GOING TO START AS A
SUBCOMMITTEE. SO WELCOME
ASSEMBLYMEMBER'S EARLY.
GOOD AFTERNOON, MADAM CHAIR AND
MEMBERS. I WANT TO THANK YOU FOR
ALLOWING THIS HEARING OF A B
259. I'M PRESENTING A B 259
TODAY, WHICH PROPOSES TO
ESTABLISH ATTACKS ON THE WEALTH
OF INDIVIDUALS. MAYBE YOU CAN
GET MORE MONEY AND ASSETS. THE
99.9% OF ALL PEOPLE IN THE STATE
. THIS BILL WOULD AFFECT LESS
THAN 0.1% OF PEOPLE. PEOPLE THAT
LIVE ON THE OUTER EDGE OF THE
GROWING ECONOMIC INEQUALITIES
THAT WE'VE SEEN. AND ALMOST ALL
OF THE WEALTH OF THIS GROUP OF
PEOPLE IS ESSENTIALLY UNTAXED.
THEIR WEALTH IS NOT INCOME. IT
IS NOT GROWING DUE TO THEIR
WORK. THIS WEALTH DISPARITY
GROWS BECAUSE WORK IS TAXED.
INCOME IS TAXED. YOUR PAYCHECK
IS TAXED. EXTREME WEALTH IS NOT.
IT IS USED FOR COLLATERAL LOANS
TO FUND THE LIFESTYLE. THE TOP
0.1% THE BILLIONAIRES AND MEGA
MILLIONAIRES. BUT IT IS NOT
TAXED. AND AS I'VE TALKED AROUND
TO PEOPLE ABOUT THIS PROPOSAL, I
KNOW ONE OF THE HARDEST PARTS
ABOUT THIS IS WRAPPING OUR MINDS
AROUND THE ENORMITY OF THE
WEALTH INVOLVED A MILLIONAIRE.
IN OUR SOCIETY IS COMFORTABLE,
LARGELY SECURE FOR ALL THE
BASICS OF LIFE, NICE HOUSE OR
HOUSES EVEN MORE THAN ENOUGH
FOOD, EXPENSIVE CLOTHES,
VACATIONS, ENTERTAINMENT AND
ENOUGH FOR THEIR CHILDREN. BUT
TO COMPARE THE SCALE OF WELL
THEY'RE TALKING ABOUT. I'LL USE
COMPARISON IN TIME. A MILLION
SECONDS IS 12 DAYS. 50 MILLION,
WHICH IS WHERE OUR BILL STARTS
IS 600 DAYS OR 20 MONTHS AND A
BILLION SECONDS IS 31 YEARS. 100
BILLION SECONDS IS 3100 YEARS.
THAT IS THE WEALTH LEVEL OF THE
MOST FAMOUS PEOPLE, YOU KNOW.
ELON MUSK, JEFF BEZOS, CARLOS
SLIM. THERE'S SOME OF THE MOST
RICH PEOPLE IN THE WORLD. THAT'S
THE DIFFERENCE BETWEEN A
MILLIONAIRE AND WITH MOST OF THE
COMFORT SOCIETY HAS TO OFFER AND
INDIVIDUALS THAT ENJOY THE MOST
EXTREME WEALTH. THEY'RE NOT EVEN
IN THE SAME NEIGHBORHOOD, NOT
EVEN THE SAME ZIP CODE AND THIS
WEALTH ACCUMULATION IS
INCREASING AS A COMMITTEE
ANALYSIS NOTES. MIDDLE INCOME
HOUSEHOLDS IN 1970 ON 32% OF
AGGREGATE WEALTH IN UNITED
STATES THIS NUMBER HAS FALLEN TO
17% WITH UPPER INCOME HOUSEHOLDS
NOW HOLDING 79% OF ALL WELL SO
THIS GROWTH OF WEALTH FOR THE
TOP 0.1% IS INCREASING AT A RATE
RARELY, IF EVER SEEN IN HUMAN
HISTORY, AND ITS BILL PROPOSES,
UM TO IMPOSE A MODEST WEALTH TAX
OF 1% ON WEALTH OF $50 MILLION,
AND WHEN YOU GRADUATE TO THE $1
BILLION LEVEL, IT'S 1.5% AND I
HOPE THAT THERE ARE CONCERNS
HAVE BEEN RAISED THAT IF A
WEALTH TAX IS LEVIED ON THE TOP
0.1% THAT PEOPLE JUST SIMPLY
LEAVE CALIFORNIA. HOWEVER
HISTORICAL DATA DOES NOT SUPPORT
THIS PREMISE. THE DATA THAT THE
HIGHER THE DATA SAYS THAT HIGHER
WEALTH PEOPLE HAVE MORE LIKELY
TO STAY IN CALIFORNIA,
REGARDLESS OF TAX POLICY. MORE
RECENT TRENDS SHOW MIGRATION,
BUT THERE'S NO EVIDENCE IS TIED
DIRECTLY TO TAXATION. IN FACT, I
THINK A GLOBAL PANDEMIC THAT
DISRUPTED THE ENTIRE SOCIETY HAS
MORE TO DO WITH IT. I WOULD
SUBMIT THAT THESE SOCIAL
DISLOCATION IN THE PAST FOUR
YEARS HAVE A LOT MORE TO DO WITH
THE PANDEMIC THAN TAXES. IN
FACT, OVER THE LAST FEW YEARS,
THE AMOUNT OF BILLIONAIRES IN
CALIFORNIA HAS ACTUALLY GROWN.
WE HAVE SEEN MORE BUILDING WE
HAVE MORE HEALTH, MORE
BILLIONAIRES IN CALIFORNIA THAN
ANY OTHER STATE IN THE COUNTRY.
IN FACT, WE HAVE MORE
BILLIONAIRES HERE THAN ANY OTHER
PLACE IN THE WORLD EXCEPT FOR
CHINA. HERE IN THE LEGISLATURE.
WE REGULARLY DEBATE BILLS TO
HELP THE MOST FORMAL HOW TO HELP
PEOPLE WORKING THE HARDEST LEASE
PAID JOBS, THE JOBS THAT WE ALL
DEPEND ON FOR ESSENTIALS OF
LIFE. FARMWORKERS FAST FOOD
WORKERS, GROCERY STORE WORKERS,
TRUCK DRIVERS, TEACHERS, NURSES,
FIREFIGHTERS, UTILITY LINE
WORKERS. ALL THESE FOLKS WORK
EVERY DAY, MANY LIVING MONTHS
AMONG PAYCHECK TO PAYCHECK,
PAYING A HIGHER PROPORTION OF
INCOME IN TAXES AND THE TOP
BILLIONAIRES. YEAH. THEY RELY ON
THE COLLECTIVE SERVICES THAT OUR
GOVERNMENT PROVIDES FROM ROAD
MAINTENANCE TO LIGHT RAIL AND
BUSSES TO SAFETY, ELECTRICITY
AND PUSHING PRODUCTS AS THE
INTERNET AND OUR SCHOOLS, OF
COURSE, AND FOR THE MOST
VULNERABLE, WE PROVIDE DIRECT
ASSISTANCE WITH FOOD, HOUSING
AND MEDICAL CARE. AND OFTEN
YOU'LL EVER SAY THAT DURING
TIMES OF SCARCITY AND BUDGET
SCARCITY, THE PEOPLE AT THE
BOTTOM BOTTOM. WE'RE ALWAYS
GOING TO HIT THE WORST. AND THIS
IS THE 99.9% OF OUR SOCIETY AND
THE GULF BETWEEN THOSE THAT WORK
AND SOMETIMES STRUGGLE, AND
THOSE THAT OWN AND NEVER
STRUGGLE IS GROWING. IT IS TRUE
THAT THE WEALTHIEST PAY A
SIGNIFICANT PORTION OF TAX
REVENUE THAT CALIFORNIA RINGS
INTO FUNDER BUDGET. AFTER ALL,
THEY ARE THE PEOPLE WITH THE
SIGNIFICANT PORTION OF ALL THE
MONEY IN THE ENTIRE SOCIETY.
HOWEVER, THAT IS NOT THE FULL
STORY. THE STORY IS THAT THE
WEALTHIEST INDIVIDUALS HAVE A
TRUE TAX RATE MULTIPLE TIMES
LOWER THAN WORKING PEOPLE. THE
AVERAGE PERSON'S TRUE FEDERAL
TAX RATE IS ABOUT 14. WHILE THE
WEALTHIEST 25 PEOPLE IN THE
UNITED STATES HAVE A TRUE TAX
RATE OF 3.4% THIS IS NOT
PROPORTIONATE NOR FAIR, BUT IT
IS ENTIRELY LEGAL. THE
WEALTHIEST HERE BUILD THEIR
FORTUNES THE ROBUST AND DIVERSE
ECONOMY THEY OWN MORE AND
BENEFIT MORE FROM THE GOLDEN
STATE THAT ANYONE ELSE AND YET
MUCH OF THAT WEALTH IS UNTAXED.
WE WRING OUR HANDS AND ARGUE
ABOUT RAISING THE MINIMUM WAGE
ABOUT $15 AND PAYING OUR
HEALTHCARE WORKERS $25 AN HOUR
AND WE DEBATE HOW TO HELP THESE
PEOPLE MAKE SOCIETY WORK. AND
YET CAN WE MOVE FORWARD ON THE
DISCUSSION ON HAVING THE
WEALTHIEST TOP 0.1% BILLIONAIRES
AND MEGA MILLIONAIRES CONTRIBUTE
A PROPORTIONAL SHARE BECAUSE
THEY OWN AND ENJOY MORE OF THE
BENEFITS ARE STATE AND ANYONE
ELSE THIS IS A COMMON SENSE
CHANGE AND I ASK YOUR SUPPORT
WHEN THE COMMITTEE CONSIDERS THE
SPILL. THANK YOU. THANK YOU VERY
MUCH, MR. LEE UM, I AM GOING TO
HAVE THE SECRETARY CALLED THE
ROLL, PLEASE. IRWIN HERE. OKAY,
THANKS. DIPS IN HERE. GRAYSON.
JIM PATTERSON. RIVAS. JOE
PATTERSON HERE, ALRIGHT, A
QUORUM HAS BEEN ESTABLISHED. I
APOLOGIZE FOR THE DISRUPTION. NO
WORRIES. YOU MAY HAVE YOUR LET'S
SEE, I NOW THAT WE HAVE THE
FORUM. AS A REMINDER BOTH
SUPPORT AND OPPOSITION ARE
ALLOWED TWO MINUTES UH FOR THE
PRIMARY WITNESS AND EACH PRIMARY
WITNESSES. AND THE SECONDARY
WITNESSES ALLOWED TWO MINUTES
ALSO WHY DON'T WE START WITH
LACEY? GOOD AFTERNOON, MADAM
CHAIR AND HONORED MEMBERS OF THE
COMMITTEE. MY NAME IS LACEY
BARNES. I'M A 32 YEAR EDUCATOR
IN CALIFORNIA AND THE SECRETARY
TREASURER OF CFT, A UNION OF
EDUCATORS AND CLASSIFIED
PROFESSIONALS. I RESPECTFULLY
URGE YOUR VOTE OF YES ON
CALIFORNIA TAX ON EXTREME WEALTH
TO 59 CFT REPRESENTS OVER
120,000 PUBLIC AND PRIVATE
EDUCATORS ACROSS THE STATE FROM
EARLY CHILDHOOD EDUCATION
THROUGH TK 12 COMMUNITY COLLEGES
AND THE UC SYSTEM. OUR MEMBERS
ENGAGE CALIFORNIA'S HOUSEHOLD IN
A UNIQUE SENSE. WE KNOW OUR
STUDENTS SMILES, THEIR LAUGHTER,
THEIR GRIEF, THEIR WORRIES THEIR
FEAR, AND THEY PAYING WE
DEDICATE OUR CAREERS NOT ONLY TO
EDUCATE OUR STUDENTS BUT TO HELP
THEM AND THEIR FAMILIES THRIVE.
SINCE 2020 ALONE, ULTRA WEALTHY
CALIFORNIANS HAVE ADDED OVER
$1.5 TRILLION TO THEIR ALREADY
STAGGERING LEVELS OF WEALTH.
MEANWHILE CFT MEMBERS HAVE
WATCHED CALIFORNIANS STUDENTS
BEING DENIED OPPORTUNITIES TO
THRIVE EVERY DAY AS ONE OF OUR
LARGEST AS ONE OF THE LARGEST
ECONOMIES IN THE WORLD.
CALIFORNIA STRUGGLES NOW TO
ENSURE APPROPRIATE EDUCATOR TO
STUDENT RATIOS THAT WOULD GIVE
EVERY STUDENT THE ATTENTION.
THEY ACTUALLY DESERVE. CHILDREN
AND YOUNG ADULTS. OUR STUDENTS
GO HUNGRY ON A NIGHTLY BASIS.
PARENTS KABUL MULTIPLE JOBS TO
AFFORD BASIC NEEDS FAMILY GOING.
BANKRUPT FROM MEDICAL DEBT
VETERANS CAN ACCESS NEEDED
SERVICES AND UNHAPPY HOUSED.
CAN'T ACCESS ADEQUATE,
AFFORDABLE HOUSING. THESE ARE
JUST A FEW EXAMPLES IN A LONG
LIST. YOU'VE SEEN THE INCOME
SCALE. YOU'VE HEARD THAT CFT HAS
TARGETED WITH THESE LEGISLATION.
WE'RE NOT TALKING ABOUT WEALTHY
DOCTORS, LAWYERS, ENGINEERS OR
EVEN SMALL BUSINESS OWNERS WHO
EARN HIGH WAGES. WE'RE TALKING
ABOUT FOLKS WHO HAVE AMASSED
EXTREME WEALTH ALMOST TO LEVELS
NEVER SEEN BEFORE IN HUMAN
HISTORY. THINK OF A B 259 AS THE
TEENY PERCENTAGE CATALYST THAT
WOULD SPARK GAME CHANGING
OPPORTUNITIES FOR ALL
CALIFORNIANS. CFT URGES YOU TO
VOTE YES, ON A B 259. THANK YOU
VERY MUCH. MY NAME IS DARIAN
CHANCY PROFESSOR AT UC DAVIS,
WHO WORKED ON DRAFTING THIS
BILL, AND I AM PRIMARILY HERE TO
ANSWER YOUR QUESTIONS ABOUT HOW
IT WILL WORK. LET ME START WITH
GIVING A LITTLE BIT OF CONTEXT
BEFORE TAKING YOUR QUESTIONS SO
THE GOVERNOR IS APPARENTLY NOT A
FAN OF THIS PROPOSAL, BUT I DO
WANT TO REGISTER THAT I AM A FAN
OF HIS BUDGET PROPOSAL AND THAT
HE'S TAKING A BROADER MULTI YEAR
PERSPECTIVE ON THE BUDGET AND
ADOPTING SOME REVENUE RAISERS
LIKE INFORMING TO THE FEDERAL
FEDERAL CORPORATE TAX ON
SPECIFIC PROVISIONS. NOW WE
TALKED ABOUT THIS. EARLIER LAST
WINTER IN CONNECTION WITH THE
CORPORATE ALTERNATIVE MINIMUM
TAX SOMETHING WHICH I WOULD
STILL URGE THIS COMMITTEE TO DO
ITS A LOW HANGING FRUIT. NOW WHY
IS THAT A LOW HANGING FRUIT
BECAUSE IT'S A TAX EXPENDITURE
BECAUSE THE CORPORATE TAX IS
POROUS, AND IT ALLOWS, UM WELL
HEELED TAXPAYERS TO NOT PAY THE
SAME AMOUNT OF TAXES AS OTHER
PEOPLE. I WOULD URGE THE
COMMITTEE TO THINK ABOUT THIS
PROPOSAL THROUGH THE SAME LENS.
MOST CALIFORNIANS LUCKY ENOUGH
TO HAVE WEALTH ARE SUBJECT TO A
SMALL WEALTH TAX ON MOST OF
THEIR WEALTH. IT'S CALLED THE
PROPERTY TAX, RIGHT. WHY SHOULD
THOSE WHO HAVE THE MOST WELL BUT
TYPICALLY NOT IN THE FORM OF
REAL PROPERTY, NOT PAY A SIMILAR
SMALL AMOUNT ON THEIR INTANGIBLE
WEALTH OR CONSIDERED THROUGH THE
LENS OF A DIFFERENT TAX. THE
PERSONAL INCOME TAX CALIFORNIA
APPROPRIATELY BY MY LIGHTS, ASKS
THOSE WITH HIGHER INCOME TO PAY
MORE. BUT IT FAILS TO ASK THOSE
WITH THE MOST INCOME TO DO MORE
BECAUSE THEY DON'T EARN REGULAR
WAGE INCOME. AND THIS BILL IS
ONCE KIND OF SOLUTION TO THIS
PROBLEM. THERE CAN BE OTHERS. A
MARK TO MARKET TAX COULD BE
ADMINISTERED WITHIN THE INCOME
TAX AND WHAT TAX CURRENTLY ON
TAX GAINS. SOME WORRY SUCH
ATTACKS WOULD BE VOLATILE. THIS
COULD BE ADDRESSED THROUGH
TAXING HALF OF CAPITAL GAINS
EVERY YEAR. SUCH ATTACKS HAVE
IMPLEMENTED NOW IT COULD BE
UNDERSTOOD AS A PRE PAYMENT OF
FUTURE CAPITAL GAINS HAD AN
APARTMENT AND AN IMPORTANT
MOMENT IN ORDER TO MOVE THE
BUDGET CYCLE. THE MAIN CONCERNS
OF THIS PROPOSAL TO IMPOSE A
SMALL TAX ON EXTREME WELL AS I
UNDERSTAND THEM RELATE TO
ADMINISTER ABILITY AND MOBILITY.
IN SHORT AS TO ADMINISTER
ABILITY, MOST OF THE ASSETS
SUBJECT TO THIS TASK. SHARES IN
PUBLIC COMPANIES ARE READILY
VALUED. THE REMAINING ASSETS ARE
SUBJECT TO STRAIGHTFORWARD
FORMULAS. THE APPARENT
COMPLEXITY IS PRIMARILY CAUSED
BY ANTI ABUSE RULES AND TAXPAYER
FRIENDLY DEFERRAL OPTIONS. ASK
FOR MOBILITY. THE BEST EVIDENCE
DOES NOT INDICATE THAT THERE
WOULD BE A LARGE MOBILITY
RESPONSE. FURTHERMORE SUCH
RESPONSE AS THERE WOULD LIKELY
BE WOULD BE MOSTLY RESULT OF
PEOPLE MOVING PAPER, NOT PEOPLE,
WHICH IS WHY THIS PROPOSAL
INCLUDES ROBUST ANTI ABUSE
RULES, POETRY QUESTIONS. ALL
RIGHT. THANK YOU. THANK YOU VERY
MUCH, AND I'M SURE THERE WILL BE
QUESTIONS FOR YOU AFTER WE HEAR
FROM OTHER WITNESSES IN SUPPORT,
AND I'LL REMIND ALL WITNESSES
YOU HAVE TWO MINUTES. OH, OTHER
ME TO EXCUSE ME. ME TOO. GOOD
AFTERNOON CHAIR AND MEMBERS
JANICE SOMALI WITH THE AMERICAN
FEDERATION OF STATE COUNTY
MUNICIPAL EMPLOYEES AND STRONG
SUPPORT. THANK YOU. HAPPY NEW
YEAR MADAM CHAIR AND MEMBERS
SETH BROWN, BUT HERE ON BEHALF
OF THE CALIFORNIA TEACHERS
ASSOCIATION, WE ARE IN SUPPORT.
GOOD AFTERNOON. JESSICA HEY,
WITH THE CALIFORNIA SCHOOL
EMPLOYEES ASSOCIATION IN
SUPPORT. HONORABLE CHAIR AND
MEMBERS AMY HIÆN SHAIKH WITH
WILDCAT CONSULTING REPRESENTING
SHARE COLLABORATIVE HOUSING AND
STRONG SUPPORT. THANK YOU. GOOD
EVENING, JOHAN CARDONA'S WITH
THE CALIFORNIA PANIC NICK HEALTH
NETWORK, AND WE'RE INSTRUCT
SUPPORT. THANK YOU. FIGHTING
BEER WITH CALIFORNIA
ENVIRONMENTAL VOTERS IN SUPPORT.
MONICA MADRID, UM SACRAMENTO,
CALIFORNIA CONSTITUENTS CITIZEN
TAXPAYER IN SUPPORT. BRANDON APP
REPRESENTING CALIFORNIA TAX
REFORM ASSOCIATION AND SUPPORT.
EVEN FERNANDEZ, CALIFORNIA LABOR
FEDERATION AND SUPPORT. DIANNA
DOUGLAS WITH HEALTH ACCESS
CALIFORNIA IN SUPPORT. NIELSEN
APPLE, WITH THE CALIFORNIA
WORKING FAMILIES PARTY IN
SUPPORT. THANK YOU VERY MUCH.
AND DO WE HAVE ANY WITNESSES IN
OPPOSITION? MAGNIFICENT PRIMARY.
APPROACHING. AGAIN EACH OF YOU
WILL HAVE TWO MINUTES. GOOD
AFTERNOON CHAIR MEMBERS PETER
BLOCKER AT THE CALIFORNIA
TAXPAYERS ASSOCIATION,
REPRESENTING A BROAD COALITION
OF TAXPAYERS AND ASSOCIATIONS
OPPOSED TO 8259. HIGHLIGHTED
MULTIPLE TIMES THIS MORNING AND
THE GOVERNOR'S BUDGET SUMMARY AS
THE STATE'S SIGNIFICANTLY IS
SIGNIFICANTLY DEPENDENT ON
REVENUE COLLECTED FROM A VERY
SMALL SUBSET OF TAXPAYERS.
REVENUE COLLECTED FROM PERSONAL
INCOME TAX REPRESENTS ROUGHLY
TWO THIRDS OF ALL GENERAL FUND
REVENUES. AND JUST 1% OF
CALIFORNIA'S TOTAL TAX RETURNS
WERE RESPONSIBLE FOR HALF OF ALL
PERSONAL INCOME TAX PAID BY
RESIDENTS IN 2021, SO IT'S VERY
APPARENT THAT UNDER THIS BILL,
IT WOULD ONLY IT WOULD TAKE A
VERY, VERY FEW NUMBER OF
TAXPAYERS TO START TO HAVE A
MATERIAL EFFECT ON THE BUDGET.
CALIFORNIA SUBJECT TO A WEALTH
TAX COULD EASILY MOVE TO ANY OF
THE OTHER 4949 OTHER STATES THAT
DO NOT IMPOSE ONE. TAKING WITH
THEM THEIR INCOME INVESTMENTS,
CHORTLE DONATIONS AND CONSUMER
SPENDING ENTREPRENEURS WOULD BE
DISSUADED FROM INVESTING AND
GROWING THEIR BUSINESSES IN THE
STATE. WE BELIEVE IF ENACTED, A
WEALTH TAX WOULD RESULT IN LESS
REVENUE FOR THE STATE AND HAVE A
DETRIMENTAL IMPACT ON THE
STATE'S ECONOMY. DESPITE THESE
WARNINGS, YOU BELIEVE WELL, TAX
IN THEORY IS A GOOD IDEA. IN
PRACTICE, IT IS NEARLY
IMPOSSIBLE TO ADMINISTER AS THIS
BILL DEMONSTRATES. UNDER THIS
LEGISLATION, TAXPAYERS AND THE F
T B WOULD FACE SUBSTANTIALLY
INCREASED ADMINISTRATIVE BURDENS
. BOTH PARTIES WOULD HAVE TO
CALCULATE A TAXPAYER'S WEALTH
ANNUALLY, WHICH WOULD BE A
COSTLY AND IMPRECISE TASK.
TAXPAYERS AND TAX AGENCY WOULD
WOULD BE MANDATED TO PROVIDE
VALUATIONS OF THINGS THAT MAY BE
IMPOSSIBLE TO ACCURATELY
APPRAISED ON EVERY PERSONAL
EFFECTS, INCLUDING A PRIVATELY
HELD COMPANY AND WORKS OF ART.
THIS WILL LEAD TO MORE DISPUTES
BETWEEN TAXPAYERS AND TAX
AGENCIES, WHICH WOULD ADD TO THE
MINISTRY OF COSTS AND BURDENS
FOR BOTH. THIS BILL ALSO CREATES
A TRAILING NEXUS THAT WOULD BE
SUBJECT TO WE WOULD THAT WOULD
SUBJECT FORMER CALIFORNIA
RESIDENTS WHO LEAVE THE STATE TO
THE NEW TO A NEW TAX, EVEN IF
THEY ARE NO LONGER PRESENT OR
CONNECTED TO THE STATE
WHATSOEVER. THIS ACTS
EFFECTIVELY AS AN EXIT TAX,
WHICH MAKES THIS BILL RIGHT FOR
CONSTITUTIONAL CHALLENGES ON
MULTIPLE GROUNDS. TAXPAYERS
COULD ARGUE THAT THE STATE IS
ATTEMPTING TO DETER RESIDENTS
FROM LEAVING AND VIOLATION OF
THE CONSTITUTIONAL RIGHT TO
TRAVEL A TAXPAYERS COULD ARGUE
THAT THE STATE IS EXCUSE ME,
THEY THEY STAKE. THEY COULD
ARGUE THAT NON RESIDENTS WHO NO
LONGER HAVE NEXUS WITH THE STATE
, THIS TAX WOULD PLACE A LARGE
IMPERMISSIBLE BURDEN ON
INTERSTATE COMMERCE AND WITHOUT
ANY CONNECTION BETWEEN TAXPAYERS
IN CALIFORNIA TAXPAYERS COULD
CHALLENGE THE LAW FOR VITALY
VIOLATING THE DUE PROCESS CLAUSE
OF THE U. S CONSTITUTION. AS I'M
SURE MOST OF YOU SAW THIS
MORNING THE GOVERNOR ADDRESSES
PROPOSAL MULTIPLE TIMES DURING
HIS BUDGET PRESS CONFERENCE. AND
STATED THAT IN NO WAY WOULD A
WEALTH TAX BECOME LAW IN
CALIFORNIA. WE AGREE WITH THE
GOVERNOR. THIS BILL IS NOT
SOMETHING THE STATE SHOULD
CONSIDER. AND WE URGE YOU TO
VOTE NO, ON MAYBE 259. THANK
YOU. THANK YOU. HONORABLE CHAIR
MEMBERS. GOOD AFTERNOON. SO MY
NAME IS ROB LAPSLEY. I'M
PRESIDENT OF THE CALIFORNIA
BUSINESS ROUNDTABLE, AND I'M
HEARING STRONG OPPOSITION ON
BEHALF OF A BROAD BUSINESS
COALITION TO S B TO A B 259.
THIS PROPOSAL WOULD SEND A CLEAR
SIGNAL TO CALIFORNIA'S
BUSINESSES HIGH INCOME EARNERS.
THAT IS A TIME TO MOVE OUT OF
THE STATE AND WILL FURTHER
DESTABILIZE OUR BUDGET SYSTEM
THROUGH INCREASED REVENUE
VOLATILITY. EARLIER TODAY. AGAIN
THE GOVERNOR PRESENTED HIS
BUDGET PROPOSAL. YOU KNOW, WITH
THE $37.86 BILLION SHORTFALL.
NOW WE ALL KNOW THAT
CALIFORNIA'S FINANCIAL STABILITY
IS BASED ON A SMALL PERCENT OF
HIGH INCOME EARNERS IN 2020
ABOUT 13,000 INDIVIDUALS
CONTRIBUTED A STAGGERING 37
BILLION OR 25.8. OF THE TOTAL
STATE PERSONAL INCOME TAX. IN
ADDITION, YOU KNOW CALIFORNIA
AND THIS LEGISLATURE JUST PASSED
NEW TAXES THAT HAVE ALREADY GONE
INTO EFFECT THIS YEAR. AH FROM
LEGISLATION LAST YEAR.
CALIFORNIA REMOVED THE WAGE
LIMIT UNEMPLOYED PAYROLL TAXES.
SO FOR THE STATE DISABILITY
INSURANCE FUND. SO NOW WE HAVE A
TOP INCOME TAX RATE FOR HIGH
INCOME EARNERS ALREADY THAT HAS
INCREASED BY 1.1% EFFECTIVE 10
DAYS AGO. THIS IS A TOTAL
THERE'S A TAX ON ALL
CALIFORNIANS MAKING MORE THAN
$153,000 A YEAR. SO IN ADDITION,
SO SECURITY WAGE BASED INCREASED
5.2% FOR 2024. SO NOW THAT MEANS
AN ADDITIONAL $500 PLUS, AND
THIS APPLIES ACROSS THE BOARD,
SO WE'RE SENDING SIGNALS.
MEMBERS HONORABLE CHAIR AGAIN
THAT CALIFORNIA IS LOOKING TO
TAX AT ALL LEVELS. THAT IS
CREATING VOLATILITY THAT IS
CREATING. INTEREST. IN MOVING
AND THAT IS WHAT WE'RE SEEING,
AS THE GOVERNOR SAID THIS
MORNING, WERE HEAVILY DEPENDENT
ON CAPITAL GAINS. SO AND THE
DOWNTURN IS COMING IN THIS
YEAR'S BUDGET PRODUCTIONS FROM
THE PERFORMANCE AND THE STOCK
AND REAL ESTATE MARKETS AND THE
VIRTUAL COLLAPSE OF THE TEXT
TECH I. P O S LAST YEAR. IT'S
ALL RELATED. THERE WAS A STUDY
BY THE STANFORD INSTITUTE LAST
YEAR FOR ECONOMIC POLICY
RESEARCH THAT RECOGNIZE THE
EXODUS OF BUSINESSES AND
RESIDENTS TO OTHER STATES BIRD
BY OUR HIGH COST OF LIVING IS
NOW CREATING A REAL AND CLEAR
AND PRESENT DANGER TO OUR JOB,
JOB MARKET AND FISCAL HEALTH.
THE RECENT U. S CENSUS A
REVEALS THAT STATES LIKE
ARIZONA, WASHINGTON, NEVADA HAVE
BECOME BEACONS FOR CALIFORNIA
RESIDENTS AND MORE WILL MOVE IF
THIS BILL PASSES. THAT'S
UNQUESTIONABLE. OUR POPULATION
HAS DECLINED FOR THE THIRD
STRAIGHT YEAR WITH THE LOSS OF
75,000 RESIDENTS FROM 22 TO 23
AGAIN THAT CENSUS BUREAU DATA SO
MEMBERS. HONORABLE CHAIR. WHEN
WE LOOK AT THIS, YOU ARE IN THE
POSITION TODAY THAT YOU'RE GOING
TO SEND A SIGNAL TO THROUGHOUT
THIS COUNTRY. BECAUSE THAT'S
WHAT'S GOING TO REVERBERATE IN
THE MEDIA. AND IF YOU PASS THIS
BILL YOU'RE GOING TO BE SENDING
A VERY CLEAR SIGNAL. THAT
CALIFORNIA IS INTERESTED NOW AND
INTENT. WANTING TO TAX THE NET
WEALTH. ACROSS THE BOARD AT
EVERY LEVEL. AND THE HIGH INCOME
EARNERS AS MUCH AS HE DESCRIBED
ARE WATCHING FOR THAT SIGNAL. WE
HAVE TALKED TO THEM. AND SO WITH
THAT WE APPRECIATE THE
GOVERNOR'S COMMENTS TODAY ON HIS
OPPOSITION TO THIS BILL, AND TO
A WEALTH TAX IN GENERAL. HE
UNDERSTANDS ALL THIS. AND WE
STAND READY TO SUPPORT HIM IN
HIS OPPOSITION. WE ASKED FOR
YOUR OPPOSITION AS WELL. THANK
YOU. THANK YOU VERY MUCH. DO WE
HAVE ANY OTHER WITNESSES AND
OPPOSITION? GOOD AFTERNOON,
MADAM CHAIR SKYLAR WANAKA ON
BEHALF OF THE CALIFORNIA
BUSINESS PROPERTIES ASSOCIATION
IN OPPOSITION. SCOTT KAUFMAN,
HOWARD JARVIS TAXPAYERS
ASSOCIATION AND OPPOSITION.
MADAM CHAIR MEMBERS. ALEX
TOURISM. WE HAVE THE BAY AREA
COUNCIL IN OPPOSITION. DENNIS
ALBION ON BEHALF OF THE FAMILY
BUSINESS ASSOCIATION. WE OPPOSE.
THANK YOU. JASON FOX OF THE
CALIFORNIA SOCIETY OF CERTIFIED
PUBLIC ACCOUNTANTS AND
OPPOSITION. THANK YOU. PRESTON
YOUNG FROM THE CALIFORNIA
CHAMBER OF COMMERCE HERE TODAY
IN OPPOSITION. HI MEG SNYDER ON
BEHALF OF THE CALIFORNIA
BUILDING INDUSTRY ASSOCIATION, A
POST ALRIGHT. VERY GOOD. UH DO
WE HAVE ANY QUESTIONS OR
COMMENTS FROM THE COMMITTEE? MR
PATTERSON. THANK YOU VERY MUCH
AND SORRY FOR YOU GUYS DRAWING
THE SHORT STRAW AND HAVING ME
SUB HERE TODAY, SO THANK YOU FOR
THE OPPORTUNITY. UM THANK YOU.
ASSEMBLYMEMBER'S LI, I'D LIKE TO
ASK YOUR WITNESS HAD MENTIONED
SOMETHING ABOUT THE PROPERTY TAX
BEING A FORM OF WEALTH TAX, AND
I'VE ACTUALLY SAID THAT MYSELF
IN THE PAST UM, SO SOMEBODY OWNS
LIKE A $10 MILLION HOUSE. WHICH
LOOK WHEN I GROW UP. I HOPE I
OWN A $10 MILLION HOUSE RIGHT
NOW. I LIVE IN THE SUBURBS TRACK
HOME. UM IS THERE LIKE SOME KIND
OF IS? THIS PROPOSAL CONTAINS
SOME KIND OF CREDIT. OR WOULD
YOU RECOMMEND SOME KIND OF
CREDIT FOR THE PERSON WHO OWNS A
$10 MILLION HOUSE? REAL PROPERTY
IS EXCLUDED FROM THE BASE OF
THIS TAX. ALRIGHT GREAT. SO UM
SO ON THAT ON THAT NOTE, IS
THERE A, UH IN THE ACADEMIC
WORLD? IS THERE A CAP ON SORT OF
THE AMOUNT OF TAX TAXES THAT
CALIFORNIA RESIDENTS CAN CAN YOU
KNOW? THAT THEY SHOULD BEAR. UM.
AFTER THE INTERESTING QUESTION.
I MEAN, I ACADEMICALLY. I
SUPPOSE YOU MEAN SOMETHING LIKE
THE LAFFER CURVE, RIGHT? IS
THERE A POINT IN WHICH YOU
RAISED LAST MONEY, THEN, UM,
TAXI RATES ARE SO HIGH THAT YOU
RAISED LESS MONEY THROUGH HAVING
TAXES THAT HIGH. I WOULD SAY THE
OVERWHELMING EVIDENCE IS THAT NO
STATE IS ANYWHERE NEAR THAT THAT
POINT ON THE LABORATORY CURVE,
UM, IN TERMS OF THE TAX THAT
THIS TAX IT WOULD BE A 1 TO 2%
TAX ON PROPERTY. SO ABOUT WHAT
EVERYONE ELSE WE'RE ALL PAYING
ON OUR HOUSES. SO IT YOU KNOW.
THERE'S ROOM FOR POLICY DISPUTE
FOR SURE, BUT THE NOTION THAT
THIS WOULD PUSH US OVER THE LAP
RECORD, I DON'T THINK THAT'S
SERIOUSLY UM SO WE'RE JUST
SCRATCHING THE SURFACE. I MEAN,
THIS IS A SUBSTANTIAL TAX. IT
DOESN'T MEAN THAT BUT IT SHOULD
BE TAKEN SERIOUSLY. BUT IT
DOESN'T MEAN THAT, UM THERE IS
SOME SOME LIMIT OUT THERE THAT
WERE THEORETICALLY APPROACHING.
SO ONE MORE QUESTION. IF PEOPLE
ARE IF REAL PROPERTY IS EXEMPT
WHAT WOULD STOP PEOPLE FROM
INVESTING IN REAL PROPERTY AND
EXACERBATING OUR HOUSING CRISIS?
WELL, I MEAN, THERE ARE FEW
INTRODUCING INTERESTING 0.1 IS
SINCE REAL PROPERTY HAS ALREADY
SUBJECT TO A 1 TO 2% WELL TAX IN
CALIFORNIA AND OTHER STATES
SUBSTANTIALLY MORE THAN THAT
WOULDN'T MAKE A LOT OF SENSE TO
TRY TO AVOID ONE OR 2% WELL
TAXED BY INVESTING IN ONE ASSET
THAT IS ALREADY ACROSS THE
COUNTRY, SUBJECT TO 1 TO 2% WELL
, TACT IN A STATE LIKE NEW YORK
OR NEW JERSEY 3. BASED ON REAL
MARKET VALUE. NOT THIS SORT OF
PROP 13 VALUES SO I WOULDN'T SEE
THAT AS THE YOU KNOW A
PARTICULAR PROBLEM. I WOULD LIKE
TO SAY THAT, YOU KNOW, I THINK
IT'S UM YOU KNOW, A MISNOMER
THAT PROPERTY TAX IN
CALIFORNIA'S CAP BETWEEN YOU
KNOW AT 1% A LOT OF PEOPLE SUCH
AS MYSELF. UM WE PAY A LOT
HIGHER AS A RESULT OF BELARUS
AND THINGS LIKE THAT, WHICH BY
THE WAY WAS CREATED TO IS AN
ALTERNATIVE TO PROPOSITION 13 TO
HELP GENERATE REVENUE FROM NEW
CONSTRUCTION, BUT, UM, BUT I'M
STILL UH, YOU KNOW, WE'VE BEEN
READING A LOT ABOUT, UM, WHAT
I'VE SEEN, AND I'M THE VICE
CHAIR OF THE HOUSING COMMITTEE
AND YOU KNOW CONCERNS ABOUT, UM
YOU KNOW, HEDGE FUNDS AND YOU
KNOW WEALTHY PEOPLE PURCHASING
SINGLE FAMILY RESIDENCES,
ALLEGEDLY DRIVING UP THE PRICES
OF RENT AND THINGS LIKE THAT,
WHICH YOU KNOW THE EVIDENCE
DOESN'T ACTUALLY SUGGEST THAT
THAT'S WHAT'S RAISING THE PRICE
OF HOUSING. WE HAVE A SUPPLY
PROBLEM, BUT, UM, BUT. UNDER
THIS BILL, UM, I'M IF I WAS
SOMEDAY WHEN I LIKE I SAID, WHEN
I GROW UP, I WANT TO BE A
BILLIONAIRE. I THINK THERE'S A
SONG ABOUT THAT. BUT UM, I THINK
THAT I WOULD INVEST ALL MY MONEY
IN REAL PROPERTY. I'M SO, AS I
SAID, I DON'T HAVE AN ADDITIONAL
ANSWER TO THAT. I DON'T SEE WHY
INVESTING IN THE ONE ASSET CLASS
SUBJECT TO A WEALTH TAX WOULD
WOULD HELP YOU, UM I AGREE WITH
YOU COMPLETELY ABOUT THE SUPPLY
PROBLEM, AND I APPLAUD WITH THE
LEGISLATURE IS DONE, AND I HAVE
A WHOLE BUNCH OF IDEAS THAT WE
CAN TALK ABOUT IN TERMS OF HOW
TO INCREASE HOUSING SUPPLY. UM,
THAT ARE NOT RELATED TO THIS,
ALL RIGHT? WELL THANK YOU FOR
BEING HERE AND ASSEMBLYMEMBER'S
EARLY. I'M SURE YOU EXPECTED ME
TO BE, UH YOU KNOW, ON THE FENCE
ON THIS PARTICULAR BILL, UM, I
WANT TO SO DURING THE LAST
CALIFORNIA BUDGET CRISIS, UH,
YOU KNOW, BETWEEN ABOUT 2008 AND
2011. I WAS ACTUALLY A STAFF
PERSON HERE AND FOR A PERIOD OF
THAT TIME I WORKED FOR THE
REPUBLICAN LEADER BACK WHEN
THERE WAS A BIG FIVE. NOT A. NOT
A BIG THREE, AND I REMEMBER
ACTUALLY, ONE OF MY JOBS WAS
TASKED WITH GOING OUT AND SORT
OF RESEARCHING. THE VOLATILITY
OF OUR TAXES HERE IN CALIFORNIA,
AND JUST THE PERCENTAGE OF THE
AMOUNT THAT THE WEALTHY LOOK I
DON'T HAVE. I'M NOT CRYING ABOUT
THE BILLIONAIRES. I MEAN,
THEY'RE THEY'RE GONNA DO JUST
FINE. I'M NOT CRYING ABOUT, YOU
KNOW THE HOLLYWOOD ELITE HAVING
TO PAY INTO THIS. I THINK THE
THEY'LL BE OKAY. BUT I AM VERY
CONCERNED ABOUT THE
RAMIFICATIONS OF PEOPLE, BY THE
WAY WHO AREN'T NECESSARILY
WEALTHY. THEY HAVEN'T ACTUALLY
ESPECIALLY IN THE TECHNOLOGY
WORLD. THEY HAVEN'T, UH, DID
HAVE AN ACTUALLY GOTTEN THIS
WEALTH YET. AND UH, SO I HAVE A
LOT OF CONCERNS ABOUT THAT. BUT
ALSO THE VOLATILITY. I MEAN,
WE'RE SEEING IT TODAY. THE
GOVERNOR ACTUALLY SHOWED A SLIDE
TODAY ABOUT THE INCOME TAX
VOLATILITY IN THIS STATE, AND I
DON'T BELIEVE THAT THERE ARE
ENOUGH TAXES THAT THIS STATE CAN
COLLECT TO MAKE THE SUPPORTERS
OF THIS BILL. UM YOU KNOW,
COMFORTABLE, AND YOU KNOW, YOU
KIND OF ALLUDED. WHATEVER THE
LAUGH, I'M LOOK. HEY. I'M A I'M
A ELECTED OFFICIAL. I DON'T KNOW
ABOUT THIS CURVE AND ALL THAT
KIND OF STUFF, BUT I DON'T THINK
THERE'S ENOUGH TAXES TO MAKE
HAPPY THE INDIVIDUALS WITH ALL
THE GOVERNMENT DESIRES THAT WE
HAVE. AND SO I THINK WE REALLY
HAVE TO LOOK AT STABILIZING.
THIS IS GOING TO THIS ISN'T
GONNA CREATE STABILITY IN OUR
TAX CODE. AND SO I HAVE A LOT OF
CONCERNS ABOUT THIS. THIS IS AN
ITEM WHERE I STAND WITH THE
GOVERNOR. I THINK YOU KNOW
THEY'RE VERY FEW ITEMS LIKE
THAT. BUT I COMMEND THE GOVERNOR
TODAY AND WE ARE GOING THROUGH
THIS PROCESS. BUT WE THE REALITY
IS I THINK WE KNOW THIS ISN'T
GOING TO MAKE IT ALL THE WAY
THROUGH THE PROCESS. I
APPRECIATE THE CONVERSATION, BUT
THIS ISN'T GOING TO BECOME LAW.
UM YOU KNOW, PARTLY BECAUSE WE
HAVE A GOVERNOR WHO'S ALREADY
EXPRESSED OPPOSITION TO THIS, SO
THANK YOU VERY MUCH. DO WE HAVE
OTHER QUESTIONS FROM THE
COMMITTEE? MR LEE, WOULD YOU
LIKE TO CLOSE? YES I WOULD JUST
LIKE TO BRING UP TO THE POINT
THAT YES, VOLATILITY HAPPENS
BECAUSE WE RELY ON THE INCOME
TAX OF VERY FEW. BUT THE FACT OF
THE REACTOR IS THE WEALTH THE
VALUE OF HIGH NET WORTH.
INDIVIDUALS IS STABLE IN 2023.
LAST YEAR, THE 186,000,000,386
OF THEM IN THE STATE. THEIR
WEALTH GREW BY 270 BILLION.
THAT'S ALMOST THE ENTIRE STATE
BUDGET IN ONE YEAR. SURE,
THERE'LL BE YEARS WHERE JEFF
BEZOS OR ELON MUSK OR WHOEVER
RICH PERSON YOU CAN THINK OF
THEIR WEALTH DOES NOT GROW AS
FAST BUT IT IS GROWING. IT IS
STABLE. 1% ON A STABLE GROWTH IS
MUCH BETTER THAN THE VOLATILITY
OF INCOME TAX. IF YOU EVEN THINK
ABOUT IT, THAT'S WHY I THINK
IT'S INTERESTING ARGUMENT WHEN
OPPONENTS SAY OUR TAX BASE IS
TOO CONSTRAINED AS TO IF YOU
ALREADY WELL, I'M HEARING THE
OPPOSITE IMPLICATION THAT WE
SHOULD BROADEN IT. WE SHOULD SAY
THAT MIDDLE CLASS PEOPLE WORKING
CLASS PEOPLE SHOULD PAY MORE.
WHY DON'T WE JUST GET RID OF
PROP 13? EVERYONE PAY WELL, TAX,
RIGHT? IS THAT WHAT I'M HEARING
FROM THE OPPOSITION? BECAUSE IF
YOU WANT TO SPREAD OUT THE TAX
BASE, THEN YOU SPREAD OUT TO
MORE PEOPLE WHO HAVE LESS MONEY.
BUT I'M LOOKING AT THE PEOPLE
WHO HAVE SO MUCH MONEY AND AVOID
PAYING TAXES, AND I RESPECT THE
OPPOSITION'S ARGUMENT. BUT WHEN
YOU TALK ABOUT SOMEONE WHO'S
MAKING 100 AND 50 $153,000 A
YEAR WHEN YOU TALK TO A 50
MILLION YEAR OR A BILLIONAIRE,
THEY MIGHT AS WELL BE MAKING TWO
CENTS A YEAR. THERE'S AN
INCOMPREHENSIBLE DIFFERENCE IN
CATEGORY AND WHEN THE OPPOSITION
CONFLATES PEOPLE WHO ARE DOCTORS
, ENGINEERS OR PEOPLE, MY
CONSTITUENTS WHO ALSO HAVE A LOT
OF EQUITY AND WHO ALSO WORK IN
TECH. THEY ARE NOWHERE COMPARED
TO THE BILLIONAIRES OF TODAY AND
OUR PROGRESSIVE TAXATION SYSTEM.
IS NOT THE CAUSE OF THE WORRIES
THE VOLATILITY AND THE THINGS
THAT WE'RE SCARED ABOUT. IT'S A
IT'S A REFLECTION OF INCOME,
INEQUALITY OF WEALTH, INEQUALITY
, AND AS THE RICH GETS SUPER
SUPER SUPER RICH AND THE POOR
GET WORSE AND WORSE AND OFF.
THAT'S WHY WE RELY ON SO FEW
PEOPLE WERE BECOMING TODAY LESS
AND LESS DEMOCRACY OF EQUALS OF
THE MIDDLE CLASS SOCIETY AND
ARISTOCRACY THAT OUR FOUNDERS
SAID WE DIDN'T WANT TO NOBILITY
AND WE'RE BECOMING THAT SO IN
THE OPPOSITION COMES AND SAYS,
DON'T TAX THE BILLIONAIRES. IT'S
GOING TO COME AFTER PEOPLE MAKE
50 K A YEAR. IT'S RIDICULOUS,
AND THAT'S WHY I HOPE THAT YOU
CONTINUE THIS CONVERSATION AND
IT IS A VERY TARGETED WAY TOO.
MAKE SURE THAT WE HAVE $20
BILLION MORE INVESTMENT TO
PROTECT THE PROGRESS THAT US TO
THE MAJORITY HAVE MADE CONSCIOUS
EFFORTS TO PROTECT THE MOST
MARVELOUS SOCIETY URGED YOUR I
VOTE WHEN THE TIME IS RIGHT. ALL
RIGHT. THANK YOU. I DO REALLY
APPRECIATE YOUR PASSION. AND I
AGREE WITH MR PATTERSON THAT WE
DON'T HAVE MUCH SYMPATHY FOR THE
BILLIONAIRES. I AM ACUTELY AWARE
AND HIGHLY CONCERNED WITH THE
ISSUES SURROUNDING AND COMMIT
EQUALITY, AND I'M ALSO AWARE OF
CALIFORNIA'S BUDGET CHALLENGES
AND THE IMPACT AND THE DEFICIT
HAVE ON SERVICES AND COMMUNITIES
THROUGHOUT THE STATE. AT THE
SAME TIME, I THINK IT IS REALLY
IMPORTANT TO ACKNOWLEDGE THAT
OUR BUDGET HAS GROWN TO HISTORIC
LEVELS AND JUST THE LAST FEW
YEARS FROM ROUGHLY 213 BILLION
IN 2019. 2 300 BILLION IN 2020.
I THINK THAT WE MUST ACT WITH A
DEGREE OF FISCAL PRUDENCE AND
SEEK TO REDUCE VOLATILITY IN OUR
REVENUE STREAMS, EVEN IF THE
LONG LIST OF ADMINISTRATIVE
ISSUES IDENTIFIED BY FTP WERE
ADDRESSED, THIS BILL TARGETS
INDIVIDUALS WITH THE RESOURCES,
TECHNICAL SOPHISTICATION AND
FLEXIBILITY TO RELOCATE AND
MINIMIZE OR AVOID ANY TAX
LIABILITY. ENVISIONED BY THIS
PROPOSAL, GIVEN THE RECENT
TRENDS OF HIGH INCOME AND HIGHLY
EDUCATED CALIFORNIANS, LEAVING
THE STATE AT INCREASED RATES
COMPARED TO OTHER GROUPS. I
BELIEVE THESE TRENDS WILL ONLY
ACCELERATE. CALIFORNIA AS YOU
SAID, ALREADY HAS A PROGRESSIVE
INCOME TAX. AND IF ENOUGH,
WEALTHY INDIVIDUALS DECIDE TO
LEAVE THIS STATE AND RESPONSE TO
THE ENACTMENT OF THIS BILL, IT
WILL SERIOUS SERIOUSLY
JEOPARDIZED OUR PERSONAL INCOME
TAX RECEIPTS THAT ARE ALREADY
INCREASINGLY RELIANT ON OUR
HIGHEST INCOME. EARNERS IN 2020
TO 25% OF THE PERSONAL INCOME
TAX REVENUES WAS DERIVED WITH
TAXPAYERS WITH INCOMES OF 10
MILLION OR MORE IN 20 21/10
PERCENT OF THE EARNERS ACCOUNTED
FOR 72% OF THE STATE'S PERSONAL
INCOME TAXES. THE PERSONAL
INCOME TAX, AS YOU KNOW, HAS, UH
, ACCOUNTED FOR ROUGHLY TWO
THIRDS OF OUR GENERAL FUND IN
RECENT YEARS. TO THE PROPONENTS
WHO CONTINUE TO SAY THAT THIS
BILL IS A PANACEA TO OUR CURRENT
BUDGET CHALLENGES. I WOULD SAY
THAT THAT IS MISLEADING. IF WE
ENACT THIS PROPOSAL RIGHT NOW,
THE VOTERS WOULD NEED TO VOTE IN
A CONSTITUTIONAL AMENDMENTS AND
F T B HAS STATED THAT IT WOULD
TAKE AT LEAST 3 TO 4 YEARS TO
STAND UP A PROGRAM OF THIS SIZE
AND COMPLEXITY. AND THIS DOES
NOT EVEN ACCOUNT FOR THE LEGAL
CHALLENGES THAT WOULD BE
INEVITABLE. EVEN THEN PROPOSED
REVENUES WOULD FALL SHORT OF
MEETING ANTICIPATED SHORT OF
MEETING THE ANTICIPATED, UM
REVENUE IS EXPECTED IN FUTURE
YEARS, ESPECIALLY IF MORE
INDIVIDUALS LEAVE THE STATE
DURING THIS PERIOD. F T B
ESTIMATES ONLY 6.5 BILLION WOULD
BE RAISED IN THE FIRST YEAR OF
FRACTION OF THE 20 PLUS BILLION.
THAT'S WHAT WE HAVE SEEN CLAIMED
. PROPONENTS OF THIS MEASURE
OFTEN LOOK TO EUROPE FOR POLICY
INSPIRATION FOR WEALTH TAX.
HOWEVER, THE EVIDENCE GIVES MANY
REASONS FOR CONCERN IN 1990 12
COUNTRIES IN EUROPE HAD A WEALTH
TAX. TODAY THERE ARE ONLY THREE
FRANCE'S WEALTH TAX CONTRIBUTED
TO THE EXODUS. SEVEN ESTIMATED
42,000 MILLIONAIRES BETWEEN
24,012, AMONG OTHER PROBLEMS
LEADING TO ITS REPEAL IN 2018.
THESE COUNTRIES ALL EXPERIENCED
THE SAME CHALLENGES. THE TAX WAS
DIFFICULT TO ADMINISTER IT
DISTORTED SAVINGS AND INVESTMENT
DECISIONS. IT PUSHED THE RICH TO
TAKE THEIR MONEY OUT OF THE
TAXING COUNTRIES, AND PERHAPS
WORST OF ALL, IT DIDN'T RAISE
THE REVENUE THAT IT WAS, UM,
PROMISED. I UNDERSTAND THEIR
PROPOSAL TRIES TO INCORPORATE
LESSONS LEARNED FROM THESE
COUNTRIES. THE EVIDENCE IN
EUROPE SUGGESTS THERE WILL BE
SIGNIFICANT CHALLENGES TO
PURSUING THIS POLICY AT THE
STATE RATHER THAN THE FEDERAL
LEVEL. FOR ALL THESE REASONS, I
HAVE SIGNIFICANT CONCERNS WITH
THE POLICIES AND ITS POTENTIAL
IMPACT ON OUR STATE'S
COMPETITIVENESS AND FUTURE STATE
BUDGETS. AND WITH THAT THIS BILL
IS REFERRED TO OUR SUSPENSE FILE
. AND AT THIS POINT, WE WILL
TAKE UP THE SUSPENSE FILE AND A
B 259 WILL BE HELD IN SUSPENSE,
AND WITH THAT THE MEETING IS
ADJOURNED.