California Considers Estate Tax to Raise $1B

March 26, 2019, 6:52 PM

California voters could decide in 2020 whether they want a state-level estate tax that would raise as much as $1 billion a year.

Sen. Scott Wiener (D) introduced a bill March 26 to place the question on the ballot, which would be necessary to overturn a 1982 measure prohibiting California estate taxes.

  • The California tax would be modeled on the 40 percent federal estate tax with the same exemptions, such as transfers to surviving spouses. Lower exemption rates of $3.5 million for individuals or $7 million for married couples would apply.
  • Revenue would go to a new Children’s Wealth and Opportunity Building Fund to address income inequality and help low-income children build savings accounts.
  • S.B. 378 will likely have its first committee hearing in April. If the legislature passes it and voters approve the ballot measure, the tax would take effect Jan. 1, 2021.

To contact the reporter on this story: Laura Mahoney in Sacramento, Calif. at lmahoney@bloomberglaw.com

To contact the editors responsible for this story: Jeff Harrington at jharrington@bloombergtax.com; Megan Pannone at mpannone@bloombergtax.com

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