California Democratic lawmakers hailing from San Francisco unveiled two bids to assail income inequality in the state, including one that would cut the estates of the state’s wealthiest residents and put their money toward “alleviating socio-economic inequality” and one that would cap how much landlords can raise rent.
San Francisco-based Assemblymember David Chiu introduced a new bill earlier this month aimed at limiting annual rent hikes across the state.
Chiu—who refers to the bill as an anti-rent gouging measure rather than explicit rent control—says he does not yet know precisely what the cap will be. A spokesperson tells Curbed LA that it would “would be higher than what cities with rent control already on the books have adopted.”
The current version of the bill—AB 1482—says that it would “make non-substantive changes to the provision specifying the rights of a tenant for years or a tenant at will.”
Nevertheless, Chiu says a forthcoming revision will spell out protections that are meant to keep major rent hikes from surprising renters.
In a maneuver aimed at the opposite end of the economic spectrum, State Sen. Scott Wiener introduced a bill Tuesday that would allow the state to tax the fortunes of some of California’s wealthiest residents after they die.
Under SB 378, estates larger than $3.5 million for single residents—or $7 million for married couples—would end up garnished 40 percent postmortem.
Such taxes often come out of the inheritance left to survivors, which are sometimes referred to as “inheritance taxes.” Although, since that tax applies even in cases without a specified benefactor, the technical term is estate tax.
Notably, the proposed 40 percent rate matches the one the federal government used to level on estates of this size. The bill in its current form specifies how the state would invest the funds:
This bill would propose the creation of the Children’s Wealth and Opportunity Building Fund as a special fund in the State Treasury, the requirement that all taxes, interest, penalties, and other amounts collected and paid to the Franchise Tax Board, less payments of refunds, be deposited in the fund, and the continuous appropriation of all moneys deposited in the fund to programs and services that directly address and alleviate socio-economic inequality and build assets among people that have historically lacked them.
The bill also calls for “a special election to be consolidated with the next statewide general election” on whether or not to implement the tax.
As Wiener explained via Twitter, “In 1982, voters banned estate taxes [in California], so only voters can adopt” a new one.
The legislature records SB 378 as first introduced in February. However, that was an unrelated bill—governing “business and Professions Code relating to [...] barbering and cosmetology”—which has now been gutted and repurposed for technical reasons.