Did California attempt to pass an exit tax
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Executive summary
California lawmakers have repeatedly proposed bills that include an “exit tax” or post-departure wealth assessments—most prominently bills labelled AB 2088 and AB 259 —but no statewide exit tax has been enacted into law as of the latest reporting [1][2][3]. Those proposals sought to capture unrealized gains or tax net worth above high thresholds and were stalled, died in committee, or remained legally contentious [4][5].
1. What proponents actually put on the table: concrete bills and thresholds
Multiple legislative proposals framed as a “wealth tax” included mechanisms often described as an exit tax—AB 2088 introduced in 2020 proposed a 0.4% levy on net worth above $30 million with a post-departure reach of up to ten years [1][5][6], and later measures such as AB 259 in 2023 resurfaced similar ideas aimed at taxing unrealized capital gains or net worth over set thresholds [4][2].
2. Legislative fate: attempts made, results clear
Those attempts were real but unsuccessful: AB 259 was introduced in 2023 and, according to reporting, died in committee in January 2024 [4], and earlier proposals such as AB 2088 and companion bills stalled in the legislature rather than becoming law [5][6]. Several legal and political commentators therefore characterize the effort as a recurring proposal rather than an enacted tax [3][7].
3. How the proposed “exit tax” would have worked in practice
The common design would not tax the mere act of leaving but would treat high‑net‑worth former residents as still taxable on wealth appreciation tied to California for years after moving—examples include a one‑time 0.4% charge on net worth over $30 million tied to exit or annual wealth taxes with varying thresholds and rates in other proposals [8][5][9]. Some versions sought to capture unrealized capital gains or apportion California-source appreciation, complicating residency and sourcing tests [2][7].
4. Constitutional, legal and practical objections were immediate and prominent
Legal analysts flagged constitutional problems—equal protection, right to travel, due process and commerce clause issues—and many observers predicted courts would likely invalidate aggressive exit‑tax schemes if enacted [5][9]. Practitioners and tax advisors also warned about operational difficulties: valuing illiquid assets, determining California nexus for wealth, and enforcement against former residents spread worldwide [2][7].
5. Politics, messaging and the interests behind the debate
Supporters framed the proposals as necessary to recoup public investment and prevent wealthy residents from gaming the system, while opponents cast them as punitive, investment‑driving policy that would accelerate capital flight and burden constitutional rights; advocacy and legal firms, and partisan actors on both sides, amplified these narratives in public materials [8][10][11]. Some of the coverage and law‑firm explainer pieces emphasize planning and survival strategies—an implicit commercial interest in advising affected clients [1][12].
6. Bottom line — did California attempt to pass an exit tax?
Yes: California legislators repeatedly proposed bills that included exit‑tax style provisions (notably AB 2088 and AB 259) and those proposals received public, legal and legislative scrutiny [1][2][4]. No: as of the cited reporting those proposals were not enacted into law—many stalled, died in committee, or remained unadopted amid legal concerns [4][5][3]. The issue therefore remains a live political topic and a plausible future legislative flashpoint, but it is inaccurate to say California has an active, enforceable state exit tax on the books based on the available sources [3][7].