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It’s also unethical. Taxing people based on how much money they have left over after paying all of their other taxes is just wrong, regardless of how much money

It’s also unethical. Taxing people based on how much money they have left over after paying all of their other taxes is just wrong, regardless of how much money the person has. As far as I know there’s no basis for this ever having been done in human history. Not to even mention California’s proposed plan to keep collecting taxes after the person flees the state. I can’t imagine this bill has a chance of doing anything but helping useless politicians pander to their disaffected political bases.

vlovich123 6y ago
> As far as I know there’s no basis for this ever having been done in human history Two seconds of googling. The Wikipedia article for progressive taxation[1] suggests that the Roman Republic had a form of wealth tax: > The tax rate under normal circumstances was 1% of property value, and could sometimes climb as high as 3% in situations such as war. These taxes were levied against land, homes and other real estate, slaves, animals, personal items and monetary wealth Then we have the wealth tax Wikipedia article itself[2] that lists 8 instances in recent history of wealth taxes. Then you say: > Not to even mention California’s proposed plan to keep collecting taxes after the person flees the state How is this any different from how taxes are owed today? I'm pretty sure all back taxes you owe a state remain even if you move states. Otherwise you could just rack up a huge tax bill & move states to escape. Even federal US tax liabilities are applied on world wide income & has treaties with many countries to enforce these laws for expats. > It’s also unethical. Taxing people based on how much money they have left over after paying all of their other taxes is just wrong Aside from stating a personal tautology you haven't really elevated the discussion much & then everything else flowed from this premise rather than evaluating the argument on its merits. I'm sure there's a compelling argument against this that could be made against a wealth tax independent of constitutional issues, but you haven't made it. [1] https://en.wikipedia.org/wiki/Progressive_tax https://en.wikipedia.org/wiki/Progressive_tax [2] https://en.wikipedia.org/wiki/Wealth_tax https://en.wikipedia.org/wiki/Wealth_tax
- haram_masala 6y ago
  The problem with a wealth tax is that it's essentially retroactive. Instead of taxing income and capital gains at the time they're accrued, you tax them later - long after the individuals who accrued them have had the chance to make rational decisions based on that tax rate. This seems inherently unfair to me, a form of bait and switch, especially combined with the intention to hunt down former California residents up to a decade after they've left the state (thereby further denying them any opportunity to make rational decisions).
  - vlovich123 6y ago
    How is it a bait and switch? Seems like that kind of framing would apply to the introduction of any new tax which seems immature to me. I do hope the 10 year thing takes into account how long you’ve been in the state and how much you earned within the state. Remember. You’re only getting taxed on the amount over >30mil in assets (first 30 million isn’t taxable). That’s quite a lot of money before a very small tax begins to be levied. I do hope there’s also allowances for income tied up in illiquid investments (eg private business investments). I would also worry about taxation on net worth that hasn’t been realized (eg private company that does a valuation that suddenly puts you over the 30 mil threshold). These seem like important nuances that could quickly torpedo any benefits.
    - sokoloff 6y ago
      What can look like a very small tax is not at all small when applied repeatedly (annually). As an example a popular “Just two cents” plan takes a third of the value of a taxed base in 20 years and by 35 years, the government has received over half.
      - thoughtstheseus 6y ago
        Does your example assume the asset will grow in value? Wealth taxes get big as they compound, but that also shows the compounding value of assets.
        6y ago
- sokoloff 6y ago
  I don’t think anyone is objecting to California levying property tax on property in California, similar to the Roman property tax. (Property taxes are a form of wealth tax indeed, but when someone proposes a “wealth tax” today, they probably specifically do not mean a tax based on property value, but rather on net wealth.) Taxes on net wealth and particularly net wealth held outside California by non-residents of California represent a material different case in my mind and one which I’d hope would not be found constitutional.
avmich 6y ago
The idea is that all the money are earned in a society, so social equality is a common concern. People tried different approaches to control equality, and the proposal which currently looks like one of better ones is this. It's not about "how much money they have left". It's about "it's hard to effectively tax at the earning time, so taxation is applied to leftovers". > As far as I know there’s no basis for this ever having been done in human history. So wealth tax as a term exist for a purely theoretical concept? The goal is noble, of course, as always. With good intentions... It would be nice if a better mechanism for keeping society on somewhat equal footing would be offered instead.
- fastball 6y ago
  What you're talking about sounds more like forced equity, which many people find immoral.
  - sokoloff 6y ago
    I find it undesirable from a purely practical standpoint. I want people working to improve the human condition. One way to encourage that is to reward people who meet the needs of other people, as evidenced by people paying them money for goods and services.
    - CuriouslyC 6y ago
      Unfortunately, often people give other people money for a lot of reasons other than meeting their needs. Creating a "need" that didn't exist only so you can sell a product that people think will make them happy but actually won't is the basis of modern capitalism.
      - dantheman 6y ago
        Really it's the basis of modern capitalism? Please, tell me what things people are bamboozled to buy?
        6y ago
paul_f 6y ago
I don't agree with the tax, I also don't agree with this poster that this tax is going after the "leftovers". The primary intent of the wealth tax seems to be going after unrealized capital gains. Stock appreciation that would not normally be taxed until sold. Taxing this is not wrong as much as it is completely unworkable and so counterproductive.
- belorn 6y ago
  The Swedish tax system allow both models and it up to the stock owner which type they choose (chosen when creating the "stock account" at the bank). You either pay income tax when a stock is sold, or you pay the same income tax on the value of the stocks based on a fixed predetermined estimate on how much stocks is expected to increase in value (based on the rate for the government debt and then added 1%). Each model has benefits and drawbacks for both the government and the tax paying citizen, and both works. Taxing wealth directly has the benefit that it gives the government a more even and predictable taxation each year, and the citizen benefit by gaining any additional profits that is above the rate for the government debt+1%. The downside is that the government may not get as much tax as it could as the yearly stock value increase tend to be a bit above that predetermined value, and citizens may loose out a bit more when there is a significant crash. The benefit of taxing only when people sell stocks is that the government get the whole income tax, and the citizen do not have to pay any tax if they don't have any profits. However it seems that most people are going with option 1 since people tend to expect that stocks will go up in value when they invest in stocks. Currently, that predetermined tax is (0.51+1)*0.3 or 0.453% per year of the total stock value.
  - paul_f 6y ago
    California is not proposing the "Swedish" system.
    - belorn 6y ago
      Correct, but what I am describing is a wealth tax system that goes after unrealized capital gains from stocks that does not depend on the stock being sold. It can tax the expected value increase rather than the actually value derived when a stock is sold, demonstrating a working method to tax the value of stock ownership rather than at the point of sales. It also demonstrate that people will volunteer to such system if it gives a statistically economic benefit to do so.
Red_Leaves_Flyy 6y ago
I staunchly disagree with the ethical qualms you've raised. When gauging the ethics of a choice one must weigh the harm against the several, independently and collectively. If that which is gained by the many is greater than the loss suffered by the individual or the few than it is not only ethical, it is essential to fuel a thriving society. Something that we collectively have neglected to do got decades.
- todd8 6y ago
  Doesn't this reasoning lead to all sorts of problems? There are countless people around the world that would be helped by a few extra dollars each week. As long as you personally are living above a subsistence level by this reasoning you should be taxed to improve their lives. Or say, that two people that have lost their kidneys due to driving drunk and each having an accident, and that your kidneys are a good donor match. Should we take both your kidneys and give one to each of the drunk drivers? Only one person would suffer (too bad for you), but the two others would gain. Or imagine, your daughter going to elementary school with her new birthday present, a stuffed animal. Three classmates are envious and jealous, should their teacher throw the little stuffed animal in the trash, making three classmates happy at the expense of you daughter? Wouldn't it make sense by this reasoning for you to be forced to take a couple of homeless people as roommates? It would make their lives much better (even more so if you were forced to prepare meals for them), this only inconveniences you while benefiting your new roommates.
  - jdlshore 6y ago
    You are engaging in the slippery slope fallacy: specifically, you’re taking an existing proposal and exaggerating its possible consequences by ignoring the possibility of a middle ground.
    - ls612 6y ago
      What you call the slippery slope fallacy is really someone asking for a limiting principle on your argument. Responding like that strongly implies that there isn’t one.
srtjstjsj 6y ago
I'll worry about the ethics of taxing $30millionaires after reparations have been paid for slavery, Jim Crow, and housing covenants.

vlovich123 6y ago

> As far as I know there’s no basis for this ever having been done in human history Two seconds of googling. The Wikipedia article for progressive taxation[1] suggests that the Roman Republic had a form of wealth tax: > The tax rate under normal circumstances was 1% of property value, and could sometimes climb as high as 3% in situations such as war. These taxes were levied against land, homes and other real estate, slaves, animals, personal items and monetary wealth Then we have the wealth tax Wikipedia article itself[2] that lists 8 instances in recent history of wealth taxes. Then you say: > Not to even mention California’s proposed plan to keep collecting taxes after the person flees the state How is this any different from how taxes are owed today? I'm pretty sure all back taxes you owe a state remain even if you move states. Otherwise you could just rack up a huge tax bill & move states to escape. Even federal US tax liabilities are applied on world wide income & has treaties with many countries to enforce these laws for expats. > It’s also unethical. Taxing people based on how much money they have left over after paying all of their other taxes is just wrong Aside from stating a personal tautology you haven't really elevated the discussion much & then everything else flowed from this premise rather than evaluating the argument on its merits. I'm sure there's a compelling argument against this that could be made against a wealth tax independent of constitutional issues, but you haven't made it. [1] https://en.wikipedia.org/wiki/Progressive_tax https://en.wikipedia.org/wiki/Progressive_tax [2] https://en.wikipedia.org/wiki/Wealth_tax https://en.wikipedia.org/wiki/Wealth_tax

haram_masala 6y ago
The problem with a wealth tax is that it's essentially retroactive. Instead of taxing income and capital gains at the time they're accrued, you tax them later - long after the individuals who accrued them have had the chance to make rational decisions based on that tax rate. This seems inherently unfair to me, a form of bait and switch, especially combined with the intention to hunt down former California residents up to a decade after they've left the state (thereby further denying them any opportunity to make rational decisions).
- vlovich123 6y ago
  How is it a bait and switch? Seems like that kind of framing would apply to the introduction of any new tax which seems immature to me. I do hope the 10 year thing takes into account how long you’ve been in the state and how much you earned within the state. Remember. You’re only getting taxed on the amount over >30mil in assets (first 30 million isn’t taxable). That’s quite a lot of money before a very small tax begins to be levied. I do hope there’s also allowances for income tied up in illiquid investments (eg private business investments). I would also worry about taxation on net worth that hasn’t been realized (eg private company that does a valuation that suddenly puts you over the 30 mil threshold). These seem like important nuances that could quickly torpedo any benefits.
  - sokoloff 6y ago
    What can look like a very small tax is not at all small when applied repeatedly (annually). As an example a popular “Just two cents” plan takes a third of the value of a taxed base in 20 years and by 35 years, the government has received over half.
    - thoughtstheseus 6y ago
      Does your example assume the asset will grow in value? Wealth taxes get big as they compound, but that also shows the compounding value of assets.
      - 6y ago
sokoloff 6y ago
I don’t think anyone is objecting to California levying property tax on property in California, similar to the Roman property tax. (Property taxes are a form of wealth tax indeed, but when someone proposes a “wealth tax” today, they probably specifically do not mean a tax based on property value, but rather on net wealth.) Taxes on net wealth and particularly net wealth held outside California by non-residents of California represent a material different case in my mind and one which I’d hope would not be found constitutional.

avmich 6y ago

The idea is that all the money are earned in a society, so social equality is a common concern. People tried different approaches to control equality, and the proposal which currently looks like one of better ones is this. It's not about "how much money they have left". It's about "it's hard to effectively tax at the earning time, so taxation is applied to leftovers". > As far as I know there’s no basis for this ever having been done in human history. So wealth tax as a term exist for a purely theoretical concept? The goal is noble, of course, as always. With good intentions... It would be nice if a better mechanism for keeping society on somewhat equal footing would be offered instead.

fastball 6y ago
What you're talking about sounds more like forced equity, which many people find immoral.
- sokoloff 6y ago
  I find it undesirable from a purely practical standpoint. I want people working to improve the human condition. One way to encourage that is to reward people who meet the needs of other people, as evidenced by people paying them money for goods and services.
  - CuriouslyC 6y ago
    Unfortunately, often people give other people money for a lot of reasons other than meeting their needs. Creating a "need" that didn't exist only so you can sell a product that people think will make them happy but actually won't is the basis of modern capitalism.
    - dantheman 6y ago
      Really it's the basis of modern capitalism? Please, tell me what things people are bamboozled to buy?
      - 6y ago

paul_f 6y ago

I don't agree with the tax, I also don't agree with this poster that this tax is going after the "leftovers". The primary intent of the wealth tax seems to be going after unrealized capital gains. Stock appreciation that would not normally be taxed until sold. Taxing this is not wrong as much as it is completely unworkable and so counterproductive.

belorn 6y ago
The Swedish tax system allow both models and it up to the stock owner which type they choose (chosen when creating the "stock account" at the bank). You either pay income tax when a stock is sold, or you pay the same income tax on the value of the stocks based on a fixed predetermined estimate on how much stocks is expected to increase in value (based on the rate for the government debt and then added 1%). Each model has benefits and drawbacks for both the government and the tax paying citizen, and both works. Taxing wealth directly has the benefit that it gives the government a more even and predictable taxation each year, and the citizen benefit by gaining any additional profits that is above the rate for the government debt+1%. The downside is that the government may not get as much tax as it could as the yearly stock value increase tend to be a bit above that predetermined value, and citizens may loose out a bit more when there is a significant crash. The benefit of taxing only when people sell stocks is that the government get the whole income tax, and the citizen do not have to pay any tax if they don't have any profits. However it seems that most people are going with option 1 since people tend to expect that stocks will go up in value when they invest in stocks. Currently, that predetermined tax is (0.51+1)*0.3 or 0.453% per year of the total stock value.
- paul_f 6y ago
  California is not proposing the "Swedish" system.
  - belorn 6y ago
    Correct, but what I am describing is a wealth tax system that goes after unrealized capital gains from stocks that does not depend on the stock being sold. It can tax the expected value increase rather than the actually value derived when a stock is sold, demonstrating a working method to tax the value of stock ownership rather than at the point of sales. It also demonstrate that people will volunteer to such system if it gives a statistically economic benefit to do so.

Red_Leaves_Flyy 6y ago

I staunchly disagree with the ethical qualms you've raised. When gauging the ethics of a choice one must weigh the harm against the several, independently and collectively. If that which is gained by the many is greater than the loss suffered by the individual or the few than it is not only ethical, it is essential to fuel a thriving society. Something that we collectively have neglected to do got decades.

todd8 6y ago
Doesn't this reasoning lead to all sorts of problems? There are countless people around the world that would be helped by a few extra dollars each week. As long as you personally are living above a subsistence level by this reasoning you should be taxed to improve their lives. Or say, that two people that have lost their kidneys due to driving drunk and each having an accident, and that your kidneys are a good donor match. Should we take both your kidneys and give one to each of the drunk drivers? Only one person would suffer (too bad for you), but the two others would gain. Or imagine, your daughter going to elementary school with her new birthday present, a stuffed animal. Three classmates are envious and jealous, should their teacher throw the little stuffed animal in the trash, making three classmates happy at the expense of you daughter? Wouldn't it make sense by this reasoning for you to be forced to take a couple of homeless people as roommates? It would make their lives much better (even more so if you were forced to prepare meals for them), this only inconveniences you while benefiting your new roommates.
- jdlshore 6y ago
  You are engaging in the slippery slope fallacy: specifically, you’re taking an existing proposal and exaggerating its possible consequences by ignoring the possibility of a middle ground.
  - ls612 6y ago
    What you call the slippery slope fallacy is really someone asking for a limiting principle on your argument. Responding like that strongly implies that there isn’t one.

srtjstjsj 6y ago

I'll worry about the ethics of taxing $30millionaires after reparations have been paid for slavery, Jim Crow, and housing covenants.