More than two-thirds of California voters support the idea of imposing a wealth tax on the richest people in the state, a new poll shows.
The poll, by the nationally respected firm David Binder and Associates, shows that 67 percent back a two-percent tax on wealth of more than $30 million
The poll was commissioned by Build Affordable Faster California, an SF-based group promoting affordable housing.
It’s timely information: Assemblymember Alex Lee (D-San Jose) is poised to introduce a wealth-tax bill this year. The measure would tax wealth of more than $50 million at a rate of 1 percent a year, and fortunes of more than $1 billion at 1.5 percent.
According to Jane Kim, senior advisor for Build Affordable Faster, the measure would bring in $22.3 billion in its first year – a huge amount of money that could fund education, housing, public health, and so many other needs.
It would impact only the top 0.07 percent of families in the state, or about 15,000 people. And it wouldn’t hurt them much: A household worth $51 million would pay about $10,000 a year.
It’s not a radical idea; Switzerland, for example, has had a wealth tax for many years, and most residents have no problem with it.
Local governments in California, as in most states, tax property – but for the most part, those taxes apply largely to real estate. Adding stocks, bonds, Bitcoin, and other financial assets would just expand the same concept.
And under the Lee bill, real estate, which is already taxed, would be exempt, so people who own a lot of land or buildings won’t have to pay any more than they already do on that property.
Of course, we are going to hear from the rich and their allies that this will just drive the billionaires out of California. But the evidence shows that doesn’t happen:
While travel may be a classic “luxury good”, migration is not. Moving one’s home, life and family to a different place is mostly about people who have a poor economic fit with where they live, earn below-market incomes, and are struggling to find a livelihood. Higher income earners show low migration levels because they are not searching for economic success – they’ve already found it.
You really think Mark Zuckerberg is going to move out of California because he has to pay less than two cents on the dollar of his wealth – particularly since he takes very little income from Facebook? His wealth, which is increasing at the rate of about $12 million a day, is in stock, so pays almost no income tax.
The wealth tax right now would cost him less than ten days’ earnings. Most people work far more than ten days to meet their income-tax requirements.
Also: the way the bill is structured, Kim told me, rich people who leave the state will still have to pay a percentage of the tax over the next four years. (And rich people who move to California will pay a graduated tax for their first four years here.)
The measure will require a Constitutional amendment, since the California Constitution sets a limit on tax rates. That means two-thirds of the Legislature would have to agree to put it on the ballot, at which point it would need a simple majority to pass.
“It’s going to be an uphill battle,” Kim told me. “But we know it’s popular. Everyone gets it.”
In fact, according to the poll, 69 percent of the voters are concerned about income and wealth inequality in the state, and 50 percent are “very concerned.”
The poll respondents are not by any means skewed left: some 51 percent described themselves as moderate or conservative, and only 42 percent as liberal or progressive.
And a majority are concerned about the future of the state: More than half the respondents said California was on “the wrong track,” and only 35 percent said the state was going in the right direction.
That’s bad news for Governor Gavin Newsom, who is facing a potential recall – but the poll shows that there’s an issue that could raise his popularity: Taxes on the very rich to support our COVID recovery.
I eagerly await his statements on the bill.