California Legislators Propose a State Estate Tax

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Some of our legislators want to impose an estate tax equal to the recent cut in the federal estate tax. Proceeds will be used to address income inequality, including savings accounts for poor people!

https://www.latimes.com/politics/la...x-legislation-2020-ballot-20190326-story.html

I predict my investments in Arizona real estate will become a lot more valuable, as people with money exit California. It doesn't take much more than a paid for home in the Bay Area or coastal LA and a decent 401 (k) balance to reach the maximum exemption.
 
Well it's just one legislator and he has apparently proposed it before without much traction.

From the article:

The proposal, if passed by the Legislature and signed by Newsom later this year, would have to be ratified by voters in the November 2020 statewide election. A pair of 1982 ballot measures banned a state-level estate tax, which means any change would have to receive final approval on election day.
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I don't know if Californians would vote to impose a state estate tax on estates worth more than $3.5 million or not.

I'm a Californian and I broadly support helping the poor but I may also be one of the heirs to an estate worth more than $3.5 million.

I doubt I'd move out though.
 
So take from those that earned it and give it to those that didn't.

Life in California.
 
Another Reader said:
Some of our legislators want to impose an estate tax equal to the recent cut in the federal estate tax. Proceeds will be used to address income inequality, including savings accounts for poor people!

https://www.latimes.com/politics/la...x-legislation-2020-ballot-20190326-story.html

I predict my investments in Arizona real estate will become a lot more valuable, as people with money exit California. It doesn't take much more than a paid for home in the Bay Area or coastal LA and a decent 401 (k) balance to reach the maximum exemption.
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It's the weather, coastline, mountains, and subsequent outdoor lifestyle options, plus robust job market, that keep people here in California. Until a state can offer better, California and it's home-owning residents have nothing to fear. Housing shortages actually continue to be an issue here, as news article after article are currently highlighting.

In addition, it appears to be lower income folk that are moving out, with higher income folk moving in or staying. Again, this is being documented in a variety of news articles.

Be careful with any AZ spec buying as a result!
 
Yup, it's the people with dough that stay.
 
We have seen a lot of California retirees sell their homes and move to Nevada. Due to the technology companies arriving we are also attracting younger people. We are getting between 5-7k/people a year moving to northern Nevada. This is starting to result in some of the problems California has which is shortage of affordable housing and more homeless.
 
Mr. Tightwad said:
So take from those that earned it and give it to those that didn't.

Life in California.
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Actually it's NOT life in California because we do not have an estate tax here. Last I looked there were about a dozen states that do have an estate tax and some states kick in at very low amounts. Oregon started at a mil last I looked a couple years ago for example.
 
CaliKid said:
Actually it's NOT life in California because we do not have an estate tax here. Last I looked there were about a dozen states that do have an estate tax and some states kick in at very low amounts. Oregon started at a mil last I looked a couple years ago for example.
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The estate tax is proposed.

My heirs should not have to give up a very large amount of money for the privilege of me residing here. I will continue to own properties here with a total value under the limit, but I will move my principal residence elsewhere if this passes. And so will a lot of other people that have money and brains. It will be a lot more difficult to bring quality high level people into the state if they know their heirs will lose 40 percent of every dollar between $3.5M and $11+MM.
 
I don't have as much problem with estate taxes simply because the heirs did nothing to earn that money. It is just another form of lotto, where some are lucky enough to have rich uncle/parent/grand parent.

Lotto is taxed, why not estates?
 
CaliKid said:
Actually it's NOT life in California because we do not have an estate tax here. Last I looked there were about a dozen states that do have an estate tax and some states kick in at very low amounts. Oregon started at a mil last I looked a couple years ago for example.
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I can tell you didn't read the article linked.

The prevailing attitude in California is to take from those that earn things, and give it to those that haven't earned it. If you would have clicked on the link, you could have read about todays latest example of this.
 
gstillson said:
I don't have as much problem with estate taxes simply because the heirs did nothing to earn that money. It is just another form of lotto, where some are lucky enough to have rich uncle/parent/grand parent.

Lotto is taxed, why not estates?
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At it's most simplistic, estates are what is left over from funds that were already taxed in some form. For example, why should an heir have to pay estate tax on the value of an inherited savings account (as part of a larger estate) when the original owner wouldn't have had to pay such a tax while alive?
 
We are seeing implications of the migration eastward to Colorado in our housing market. Actually it has been happening for a while. The townhouse community that I have rentals is experiencing high demand. A friend of mine just listed a unit for the highest price ever in the community and in 24 hrs 32 showings 5 offers. It kind of makes me want to part with all of mine pay the depreciation recapture and take the money off the table. Up until now my disposition plan was probate.
 
JDARNELL said:
We are seeing implications of the migration eastward to Colorado in our housing market. Actually it has been happening for a while. The townhouse community that I have rentals is experiencing high demand. A friend of mine just listed a unit for the highest price ever in the community and in 24 hrs 32 showings 5 offers. It kind of makes me want to part with all of mine pay the depreciation recapture and take the money off the table. Up until now my disposition plan was probate.
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Ughh CA people Californicating Colorado:mad:
 
Just a reminder that if we do want to talk about proposed legislation we need to stick to the thread topic and avoid snarky comments.
 
It’s understandable that people retiring from CA with houses worth a lot of money want to cash in their homes and move. Many have been coming here because they can buy much nicer homes and have plenty of money left over. Add in low property tax and no income tax makes it easy to understand. We don’t have all the services that they are used to but I haven’t heard anyone complain. We wouldn’t be able to afford to move here now with the price of housing so glad we came years ago.
 
Not a fan of estate taxes. Selling some inherited shares to fund the tax is relatively easy, but selling part of a grocery or farm is problematic.
 
gwraigty said:
At it's most simplistic, estates are what is left over from funds that were already taxed in some form. For example, why should an heir have to pay estate tax on the value of an inherited savings account (as part of a larger estate) when the original owner wouldn't have had to pay such a tax while alive?
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Taxes are commonly levied when valuables, such as money, change hands, even if those particular valuables were taxed previously. It's the change in ownership that triggers much taxation.
 
An estate tax is a tax on the transfer of property upon death. Wouldn't a trust holding the larger valued assets negate any concern about an estate tax? For example; my home is my largest single asset and I live in California. My home is owned by a trust set up by my estate planning atty. I have my wife and kids on the trust. When I die, the trust removes my name. The house remains in the trust. No estate tax.
 
skipro33 said:
An estate tax is a tax on the transfer of property upon death. Wouldn't a trust holding the larger valued assets negate any concern about an estate tax? For example; my home is my largest single asset and I live in California. My home is owned by a trust set up by my estate planning atty. I have my wife and kids on the trust. When I die, the trust removes my name. The house remains in the trust. No estate tax.
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It may be structured so that it is not assessed until the second spouse dies, similar to the Federal estate tax. Once both owners die, the estate tax is assessed.
 
Lifelong 3 rd generation Californian here . Not really surprising. Just another thing from the State capitol to piss me off. :mad:

The last time we had a shred of fiscal sanity was during the Gray Davis administration. I was no fan of his, but everything thereafter in both houses, and Governors office , regardless of party , is just nuts. :mad:
 
I think this is a good move to use this money to finance affordable housing for the poor . I keep seeing California has so many homeless . This could really help a lot of homeless even to tax at a little higher rate seems fair till they get affordable housing for the people moving to California .
 
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