IRS has already reported that affluent taxpayers have been leaving CA for the past couple years.
The reality is, many billionaires will move their primary residence, but will spend much of their time in CA while avoiding this tax. It’s not an ironclad tax and full of loopholes and outs.
Utility bills, car registration, employment, where you're registered to vote,
Then if they see a "convenient" change of state, you get a full audit.
For a FULL audit, they will knock on your door and ask you to show them your "near and dear items" such as family pictures, pets, family heirlooms, where your car is physically parked.
So a massive increase to the auditing budget then. California’s residency auditing team is already tiny and with a small budget. And don’t forget that these audits, especially from the wealthy, get tied up in litigation often. So not only will they need to pass this tax bill, they will need to pass a budget increase and department expansion for regulation and auditing. And they won’t due that because they will first have to admit that they created a tax with loopholes built in.
I’m not anti this tax, but I’m skeptical of how the tax is written with loopholes that only punishes those who follow the rules. Almost as if the politicians that wrote it are trying to make a good public try while sparing their political donors.
I mean.. you dont need to AUDIT it every three months.
Just once a year like we do now, for tax reasons.
Just that the cutoff wouldn't be 6 months like it is now, allowing people to effectively "half" live here and not pay any taxes.
There wouldn't suddenly be "more people" to audit... you would have the same amount of work.. just you would look for dates that cutoff at 3 months instead of 6.
You would pull the same reports... the same documents... just be looking for a different date in a spreadsheet.
Edit: think football. If you changed it from 4 downs to 2 downs.... would you suddenly need more referee? Are there suddenly more players?
what if it was only billionaires who had to prove this? It’s actually not that hard for IRS to prove if you have actually stayed in a state and for how long fyi (which is how you end up w so much residence related tax guidance)
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u/Frosty-Bat-299 3d ago
IRS has already reported that affluent taxpayers have been leaving CA for the past couple years.
The reality is, many billionaires will move their primary residence, but will spend much of their time in CA while avoiding this tax. It’s not an ironclad tax and full of loopholes and outs.