A new bill proposed in the state of California could target billionaires living in the state and those who have since moved. The bill could be directed at the Tesla CEO Elon Musk, who made a very public move of himself and Tesla headquarters to the state of Texas.
What happened: In 2021, Tesla made headlines when it officially moved its headquarters from the state of California to the state of Texas.
Tesla CEO Elon Musk has also moved to Texas after previously living in California.
Two years after the measures, California lawmakers could target Musk directly with a new bill.
alex lee, a Democrat in the California State Legislature, recently introduced a bill that would add a new tax for California’s wealthiest residents, according to Teslarati. The bill would also tax former residents who have moved to other US states.
The bill would add a 1.5% tax on anyone with $1 billion in wealth. Tax payments would begin in January 2024 if the legislation passes. The amount of wealth would be reduced to $50 million and tax everyone worth that amount at 1% starting in 2026.
If the bill passes, it could generate an estimated $22 billion in revenue for the state.
“The working class has borne the tax burden for far too long. In CA, we’re introducing #ACA3 + $AB259 to tax the ultra-rich and invest in all Californians. The ultra-rich are paying little or nothing by accumulating their wealth through assets. It’s time to end that,” Lee tweeted.
Funds from the new bill are expected to help finance programs like schools, housing and social initiatives.
Related Link: 51 Facts and Figures About Tesla CEO Elon Musk
Because it is important: The bill that targets the wealthy in the state of California and those who have left the state to keep paying could be targeting Musk squarely.
Tax Partner of Marcum LLP Steve Boultbee he couldn’t help but think about the bill that seeks to discourage California residents from leaving the state.
“You’ll have to have left four years earlier, or you might get caught for something. My first thought is that this could be an ‘Elon Musk provision’ since he moved to Texas,” Boultbee told the San Francisco Chronicle.
Some opponents of the bill argue that it could have a reverse effect and cause many billionaires to opt out, even though they are subject to paying taxes on their wealth after moving to a new location.
Lee’s district includes Fremont, home to one of Tesla’s factories.
Musk and his tax payments have come under scrutiny in the past. Musk previously clashed with the US senator. Elizabeth Warren on his accusations he paid $0 in taxes.
“I think billionaires should be taxed, and it shouldn’t just be optional,” Warren said.
Musk told Warren that he pays taxes and in 2021 he paid $11 billion in taxes, the largest ever tax payment by a US resident.
“I’m going to visit the IRS next time I’m in DC just to say hello, since I paid the most taxes in history for one person last year. Maybe I can have a cookie or something,” Musk said at the time.
Musk also told Warren that he did not pay taxes in 2018 due to an overpayment in 2017.
In 2022, Musk shared more details about Tesla’s move to Texas, citing policies and tampering in the state of California that make it difficult to get anything approved in a timely manner.
“I love working in California, but you can’t get things done,” Musk told the Tesla Silicon Valley Club.
Musk said it took 18 months to build Gigafactory Texas, which is the same amount of time it would have taken to get the licenses before starting construction in the state of California.
“California is rigged to guarantee the Democratic result.”
The California State Assembly is made up of 62 Democrats and 18 Republicans. The state senate is made up of 32 Democrats and 8 Republicans.
Musk has called himself a moderate and said he voted Republican in a recent election.
Musk is ranked as the second richest person in the world with a wealth of $167 billion.
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Photo: Miha Creative via Shutterstock
