8 ms·
A lot of comments are saying people will leave. I don't think this is true. I think a max 3.5% decrease in income is not going to make many people move. The di
by eloff 6y ago
A lot of comments are saying people will leave. I don't think this is true.
I think a max 3.5% decrease in income is not going to make many people move. The difference in cost of living in any major California city over most other cities in the US is much larger than that, and didn't make people move.
What is true is it will be the last straw for some small amount of people already waffling over this. It's also true that it won't make much of an impact, both in terms of people leaving and in terms of additional revenue.
- cellis 6y agoIt's more about a portend of what's to come, not that this tax per se is the final straw. Next year there will be another tax, and another tax. I'm convinced people in California won't be happy with the level of taxation until we're like Sweden or France.
- shakezula 6y agoGod that would be awful huh, having healthcare and decent public transportation systems
- twblalock 6y agoThat isn't what would happen. Lack of funding is not the reason we don't have those things now.
- shakezula 6y agoI dunno. Seems like every time a public transportation system proposal pops up in my city, money is the number one thing they cite when they say “it’s just not feasible.” :shrug:
- twblalock 6y agoThat's because it costs a lot to build, because voters have made it difficult by passing strict zoning laws, because they don't want people to be allowed to build. If the city did find the money, you would then see people opposing transit on the grounds of environmental impact, or noise, or crime, or the "character of the neighborhood". Then the lawsuits would start.
- shakezula 6y agoRight, we should never strive for beneficial public things because they're hard and people complain. Yes, this makes sense.
- shuckles 6y agoAmerican infrastructure costs are an order of magnitude higher than the European comparable: https://pedestrianobservations.com/2020/07/29/the-us-leads-the-way-in-high-costs/ https://pedestrianobservations.com/2020/07/29/the-us-leads-t...
- cellis 6y agoDepends on if you believe raising taxes will get you those things, or if the money will be squandered on inefficiency, large salaries for public servants, and corruption on your construction / maintenance contracts. So far, high taxes have worked out well for California. I've lived here the past 10 years and I'm looking around and not sure the money is well spent these days.
- ponker 6y agoAdjusted for inflation the state budget has ~tripled in the last 20 years. How much healthcare and decent public transportation has it gotten us?
- OminousWeapons 6y agoYeah I'm sure you would be very happy to get services that exclusively other people are paying for. Who wouldn't? How about a broad tax increase on the middle class and above which would actually generate the revenue necessary to pay for these types of projects sustainably? Funny how when that gets suggested, support for public spending tends to evaporate.
- Apocryphon 6y agoI am okay with a broad tax increase on the middle class and above which would actually generate the revenue necessary to pay for these types of projects sustainably. I suspect the poster you're replying to would be as well.
- OminousWeapons 6y agoGreat, then we are all aligned. I am 100% in favor of building high quality public services as long as everyone is paying.
- Apocryphon 6y agoSuper, when are we repealing Prop 13?
- shakezula 6y agoYeah, I would absolutely be okay with this if it meant i could legitimately get rid of my vehicle, ride transit reliably, reduce my emissions. It would probably mean a net decrease in my expenses.
- Apocryphon 6y agoThe reduction in air pollution and traffic stress/accidents could possibly lead to subtle gains in public health and reduced strain on healthcare systems, as well!
- arebop 6y agoFrance's top marginal rate is 45%.
- jbn 6y agoWell France is the master of all countries at taxation (they invented VAT, amongst many other kinds of taxes...). In particular when employing people, the employer has to pay employment taxes on top of the employee income (same as in the US, but at a much higher rate), and that is not subject to income tax, yet represents "cotisation sociales" (social contributions, i.e. retirement, unemployment, health taxes) that came on top of that. Use this simulator : https://entreprise.pole-emploi.fr/cout-salarie/ https://entreprise.pole-emploi.fr/cout-salarie/ and you'll see that for a 100 kEuro/year employee, what the employee sees is 55 kEuro/year (and that's before income tax). My point is that most taxation in France is not income tax, so even if a marginal rate of 45% exists, that's not where the French are most taxed (although the French would argue that "cotisation sociales" are not taxes, IMHO they very much are). Income tax is not even the number 1 tax for the French state (that would be VAT, see https://www.performance-publique.budget.gouv.fr/budget-comptes-etat/budget-etat/approfondir/recettes-etat/recettes-fiscales#.XycCiYhKhhE https://www.performance-publique.budget.gouv.fr/budget-compt...). Not saying this is a bad thing (I wouldn't mind a top marginal rate of 90 % as has existed in the US for most of the 20th century... most people aren't subject to it), and in fact I think the French get a lot (although not enough, the state budget could be better managed) for all their taxes.
- SubiculumCode 6y agoGosh, a 3 percent increase on income over four million dollars whatever will you do to survive.
- hnmullany 6y agoMarginal tax rates in California for top earners (including the medicare surcharge) are already about equivalent to France. 37% fed + 13.3% CA + 1.45% Medicare = 52%. Compared to France's 45% income + 7.5% social security taxes.
- shuckles 6y agoI’ve always observed that California has European tax rates on income. Is there a good understanding of why the outcomes are worse? I could imagine: - Ineffective spending - Lower taxes on wealth (i.e. non-income) - Higher taxes on consumption - Higher taxes in Europe on employers (i.e. non-personal income) - Higher taxes on capital income Do people have good resources to understand the relative source of discrepancy?
- deleted 6y ago[deleted]
- eplanit 6y agoI moved to California 25 years ago, and for the past 10 have become increasingly motivated to leave; due to not only tax policy, but overall politics. I'm not in the 0.5% they're targeting, but experience teaches me what comes next. The idea that it would be retroactive is very offensive. I'm 95% ready to move as-is; this kind of policy move would push it too 100 immediately.
- thaumaturgy 6y agoCalifornia's still experiencing a housing shortage. I'm very enthusiastically in favor of anyone moving out of the state if they're unhappy with it.
- eplanit 6y ago"California's still experiencing a housing shortage" It is, indeed -- a result of the very policy-making I'm referring to. I'll enthusiastically leave that, the ever-increasing homeless population, the high taxes, and all the rest behind when I leave.
- lern_too_spel 6y agoIf you've been a homeowner for that long, California's recently arriving high income population is subsidizing you.
- coldpie 6y ago> I think a max 3.5% decrease in income It's not a 3.5% decrease in income. It's a 3.5% decrease in income over $5,000,000. The 3.5% rate does not apply to the first five million dollars, only the money after the first five million.
- ajzinsbwbs 6y agoTo be more correct, it’s a 7% decrease in income over $5,000,000 (if the total tax rate on that income was 50% before and went to 53.5%, the amount remaining dropped by 7%). I think this point is under-appreciated. As the top federal tax rate has dropped over the decades, each additional percentage point drop has given less proportional value to top-rate-payers, while costing proportionally more of remaining federal revenue. In that sense, the lower the tax rate already is, the more expensive a tax cut is to the government. The higher the tax rate already is, the more expensive a tax increase is to taxpayers. This is why tax cuts under Bush and Trump blew up the federal budget - tax rates were already pretty low, so quite deep cuts to revenue were required to deliver any notable benefit to high-rate taxpayers. It’s hard to make rich people much richer by cutting taxes when they are already keeping most of their income. In the case of the Trump tax cut, rates were already so low it required raising taxes on some to cut for others. On the other hand, you can go back and find times when after-tax income of top rate payers doubled because the top rate dropped from eg. 91% to 77%, which delivered a lot of relative value to those taxpayers while fitting more easily into the federal budget (although as always, it’s probably more complicated as tax bills make changes to deductions when they change rates).
- bhupy 6y ago> This is why tax cuts under Bush and Trump blew up the federal budget - tax rates were already pretty low, so quite deep cuts to revenue were required to deliver any notable benefit to high-rate taxpayers I just want to point out that after the Trump tax cuts went into effect, revenue increased[1]. [1] https://www.thebalance.com/current-u-s-federal-government-tax-revenue-3305762 https://www.thebalance.com/current-u-s-federal-government-ta...
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- twblalock 6y agoA year ago, it would not have been easy for high earners to leave the state. Now, with working remotely becoming more normal, a lot of people who wanted to leave may now have the opportunity to do so.
- pmoriarty 6y ago"A lot of comments are saying people will leave. I don't think this is true." On evidence for this see the Guardian article titled: :If you tax the rich, they won't leave: US data contradicts millionaires' threats: https://www.theguardian.com/inequality/2017/nov/20/if-you-tax-the-rich-they-wont-leave-us-data-contradicts-millionaires-threats https://www.theguardian.com/inequality/2017/nov/20/if-you-ta...