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When it comes to taxation, only the currency issuer (the Federal government) can really tax income and wealth denominated in its currency. Currency users, like

When it comes to taxation, only the currency issuer (the Federal government) can really tax income and wealth denominated in its currency. Currency users, like states or counties within a currency union really can only tax the land and property within them. Everything else has a habit of moving to lower taxed areas. Other states will end up passing laws saying the Californian Wealth tax cannot be collected or enforced in their area. I'm surprised they aren't teeing that one up in Texas as we speak - given all that lovely IT business they could attract. Purity of tax theory is what ended up as Poll Tax riots in the UK. Eventually local taxation reverted to property as it tends to once pragmatism and reality reasserts itself. California could get what it needs using a volumetric hut tax - unless it fancies going independent and setting up its own currency.

belorn 6y ago
Where does a bank account or stock portfolio reside? Is it at the physical location of the banks server hall (assuming only a single server is representing the location of the account), or is it the location of the local representative bank where the customer is said to be located according to the bank? Is it maybe the central headquarter of the bank or maybe the location of the server for the bank online interface where the customer interacts with his account? Alternative, can it be the registered address of the customer, or maybe the actually location for where the customer physically resides. It seems reasonable that a argument can be made that property exist in one of those places rather than none. Maybe the Federal government should simple dictate where that is and then let local government handle the actually taxation.
- neilwilson 6y ago
  It resides where the person resides. Otherwise the Gold on the face of the Reserve Bank of Australia balance sheet would belong to England. I very much doubt anybody would suggest that England can tax the Gold of Australia any more. We'd never hear the last of it from the Aussies for starters.
- bwb 6y ago
  It is done where the person has a tax residence. The USA is one of only 3 countries to tax you no matter where you live. Which is really painful for Americans not living in the USA. They need to fix this... The rest of the world taxes you as part of a territorial system, ie, where you live and have tax residence.

belorn 6y ago

Where does a bank account or stock portfolio reside? Is it at the physical location of the banks server hall (assuming only a single server is representing the location of the account), or is it the location of the local representative bank where the customer is said to be located according to the bank? Is it maybe the central headquarter of the bank or maybe the location of the server for the bank online interface where the customer interacts with his account? Alternative, can it be the registered address of the customer, or maybe the actually location for where the customer physically resides. It seems reasonable that a argument can be made that property exist in one of those places rather than none. Maybe the Federal government should simple dictate where that is and then let local government handle the actually taxation.

neilwilson 6y ago
It resides where the person resides. Otherwise the Gold on the face of the Reserve Bank of Australia balance sheet would belong to England. I very much doubt anybody would suggest that England can tax the Gold of Australia any more. We'd never hear the last of it from the Aussies for starters.
bwb 6y ago
It is done where the person has a tax residence. The USA is one of only 3 countries to tax you no matter where you live. Which is really painful for Americans not living in the USA. They need to fix this... The rest of the world taxes you as part of a territorial system, ie, where you live and have tax residence.