On Thursday, I shared with you the details of state Sen. Scott Wiener’s Senate Bill 378, which seeks to create a California estate tax. Mr. Wiener believes that parents who manage to save enough money to buy a home, or took the risk to start a small business and want to leave it to their children, is indicative of white privilege. That is, he believes that the state of California has the right, obligation and moral duty to tax 40 percent of the value of assets in excess of $3.5 million. Three and one-half million dollars is surely a lot of money, but rest assured, the Legislature will have the opportunity to lower this threshold on a whim.
Mr. Wiener has the temerity to consider this massive wealth redistribution scheme as a “wealth starter kit” ? read that reparations ? for black and Latino families who haven’t had the same leg up as white people. He, of course, makes no reference to the fact that most of the black families who are still in poverty in this state have been on welfare for successive generations, have failed to complete high school, eschewed marriage, and are no strangers to the debilitating effects of drugs and criminal activity. Nor does he mention that many of the Latino families who are struggling to get by are first-generation immigrants, many of whom are here illegally, with little to no education, no proficiency in English, and no job skills.
One of the quotes in favor of this bill states, “Our Golden State has the fifth largest economy in the world, touts itself as a bastion of progressive values, and yet has the highest poverty rate in the nation,” said Anne E. Price, president of the Insight Center for Community Economic Development, who went on to say, “This paradox is possible because much of our economic policy is built on the long-standing false belief that anyone can make it financially through grit, resilience and hard work.”
Hello? Hard work as a key to success is a false belief? So too, then, must be the call to finish high school, get a job before you get married, and don’t get pregnant until after you get married. To the contrary, these adages are a proven guarantee to escape poverty in one generation.
Moreover, the bill plainly states that “private action and market forces alone cannot be expected to address wide-scale racial wealth inequality, and public sector intervention is needed. It is the intent of the Legislature to address the racial wealth gap by enacting legislation that would create California Social (read that socialist) Inheritance Accounts to counterbalance the uneven effects of intergenerational wealth transfer and reverse our state’s record level of inequality.”
The truth is altogether something different. What we earn, buy and sell gets taxed already. Now the state wants to tax us again if we have anything left over when we die. The truth is you can’t make some people richer by making other people poorer, and you can’t multiply wealth by way of division.
This legislation presents nothing less than an unmitigated moral, social, political and economic disaster. At a minimum, rich people will be sure to declare their permanent domicile in another state in order to evade this tax. And, due to the fact that the ultra-rich pay a disproportionate share of the taxes in this state, California as a whole will be worse off financially as a result.
Hence, California will present the double jeopardy of being too expensive to live here and even more expensive to die here. Finally, are newly minted black and Latino millionaires going to be exempt from the tax in the name of so-called racial wealth inequality?