Calif. Wealth Tax Proposal Likely Faces Constitutional ChallengesAugust 28, 2020 – Media Mention
Laura Zwicker, partner and chair of Greenberg Glusker's Private Client Services Group, was interviewed by Law360 Tax Authority for her insights on the proposed California wealth tax in the article, "Calif. Wealth Tax Proposal Likely Faces Constitutional Challenges," published on August 28, 2020.
But administering such a tax could be difficult, at best. Before 2008, the U.S. had a 10-year rule for taxation of expatriates. That tax could be levied on the income and estate of expatriates for a decade after they departed the country. That eventually became too difficult, and the same fate likely would befall a California tax, Laura Zwicker of Greenberg Glusker Fields Claman & Machtinger LLP told Law360.
"As the rates of expatriation increased, it became an increasingly unwieldy and unworkable project," said Zwicker, a tax lawyer who often counsels high-net-worth individuals. "So in 2008, the U.S. decided, 'we're just going to impose a mark to market exit tax and we're going to collect before you leave so we know where you are.'"
Zwicker said the California tax would not be "that enormous" for people with more than $30 million in wealth, but she said it would likely trigger a negative emotional reaction.
"People react viscerally," Zwicker said. "I think it's going to drive people out of California if it passes and I think it's going to be enormously costly to collect."
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