Is California Bitter Over Elon Musk's Move To Texas? State Might Be Hitting The Tesla CEO With New Tax Bill By Benzinga

1 month ago UK

© Reuters. Is California Bitter Over Elon Musk's Move To Texas? State Might Be Hitting The Tesla CEO With New Tax Bill




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Benzinga - A new bill proposed in the state of California could target the billionaires who live in the state and those who have since relocated. The bill could be aimed at 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 also moved to Texas after previously living in California.

Two years after the moves, California legislators could be directly targeting Musk with a new bill.

Alex Lee, a Democrat of the California State Legislature, recently introduced a bill that would add a new tax for the wealthiest residents of California, according to Teslarati. The bill would also tax former residents that have relocated to other states in America.

The bill would add a 1.5% tax on anyone who has a wealth of $1 billion. The tax payments would begin as early as January 2024 if the legislation is passed. The wealth amount would drop to $50 million and tax all those worth that amount at 1% beginning in 2026.

If the bill passes, it could bring in an estimated $22 billion in revenue for the state.

“The working class has shouldered the tax burden for too long. In CA, we’ve introduced #ACA3 + $AB259 to tax the ultra rich & invest in all Californians. The ultra rich are paying little to nothing by hoarding their wealth through assets. Time to end that,” Lee tweeted.

Funds from the new bill are expected to help fund programs such as schools, housing and social initiatives.

Related Link: 51 Facts And Figures About Tesla CEO Elon Musk

Why It’s Important: The bill targeting the wealthy of the state of California and those who have left the state to still pay could be directly targeting Musk.

Marcum LLP Tax Partner Steve Boultbee couldn’t help but think of the bill seeking to discourage residents of California from leaving the state.

“You’re gonna have to have left four years before, or they’re going to conceivably get you 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 it could have a reverse effect and see many billionaires choose to leave, even though they are subject to paying taxes on their wealth after moving to a new location.

Lee’s district includes Fremont, the home of one of Tesla’s factories.

Musk and his tax payments have been the subject of scrutiny in the past. Musk previously clashed with U.S. Sen. Elizabeth Warren over his accusations he paid $0 in taxes.

“I believe that billionaires ought to be paying taxes, and it shouldn’t simply be optional,” Warren said.

Musk told Warren that he pays taxes and in 2021 paid $11 billion in taxes, the single largest tax payment by a U.S. resident in history.

“Will visit IRS next time I’m in DC just to say hi, since I paid the most taxes ever in history for an individual last year. Maybe I can have a cookie or something,” Musk said at the time.

Musk also told Warren he didn’t pay taxes in 2018 due to an overpayment in 2017.

In 2022, Musk shared more details on Tesla moving to Texas, citing politics and gerrymandering in the state of California making it hard to get anything approved in a timely manner.

“I love working in California, but you can’t get stuff done," Musk told 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 just to get licenses before starting construction in the state of California.

“California is gerrymandered to ensure Democratic outcome.”

The California state assembly is made up of 62 Democrats and 18 Republicans. The state senate is composed 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.

Read Next: Elon Musk Says This About His Political Leanings

Photo: DenysHolovatiuk on Shutterstock and JD Lasica on Wikimedia Commons

© 2023 Benzinga does not provide investment advice. All rights reserved.

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