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The US income tax was only supposed to be applied during war time for the wealthy. Now it applies to everyone. If this does pass expect it to effect most peopl

The US income tax was only supposed to be applied during war time for the wealthy. Now it applies to everyone. If this does pass expect it to effect most people with some assets in the state in a decade.

rossjudson 6y ago
So for huge numbers of people in California who really don't have significant net worth, 0.4% of very little is still...very little. Income tax seems like an overall success to me. It's not a uniform rate; it's a progressive system. So if the net worth tax ends up being applied more universally and progressively, it seem like that vast majority of people not holding on to huge fortunes really have very little to worry about. Here's the thing about California -- people living there have gotten net-worth-wealthy from real estate, and they have been able to capture huge increases without paying appropriate property taxes (because it's such a bear to attempt to increase property taxes). This has shifted paying for state services to use-based taxes, which are as far from progressive as you get (well, not as far as social security contributions, but not far off either). What should probably happen: Figure out a revenue neutral approach that blends a net worth tax with a reduction in sales taxes. That puts money back in the pockets of people who most need it. Interesting experiment: What would the social security tax rate be if you didn't cap the maximum income it applies to? It's currently around 15% (individual and employer contributions combined). I have a vague memory of calculating that it would be around 4%, if you eliminated the cap (maybe that is individual-only, can't remember). In any case, social security is a poll tax, and the money flows straight into the general fund.
- primrose 6y ago
  > Income tax seems like an overall success to me. How would you quantify this? > people living there have gotten net-worth-wealthy from real estate 1. NIMBY's, excessive regulation, limits on building all drive costs up. 2. Scared money from over seas looking for safe haven in gateway cities. You're starting to see people flee CA in droves. Housing prices here will crash worse than the rest of the country. If the politicians don't reform laws and cut spending the state will turn into Detroit. > This has shifted paying for state services to use-based taxes Kicking fixed income grandma out of her house is immoral. People constantly moving due to property tax spikes is destabilizing. CA's is not lacking in taxes. CA is spending way too much. Other states are doing fine collecting a fraction of what we do adjusted for any kind of metric you can think of. > What would the social security tax rate be if you didn't cap the maximum income it applies to? You incur more liabilities. The contract is I pay more in, I get more out later. It's a safety net. We cap it so people have a minimum and don't die in destitution. > What should probably happen: Figure out a revenue neutral approach that blends a net worth tax with a reduction in sales taxes. That puts money back in the pockets of people who most need it. A wealth tax is opening a pandora box. Enjoy paying more accountants. You don't know how much something is worth until you sell it. Who get's to decide how much my paintings or my stock is worth? A politician? Why is it ok to tax someone on income they've already paid taxes every year for the rest of their lives. People will flee and no one will move here. Detroit. > social security is a poll tax No. A poll tax is something much much different.

rossjudson 6y ago

So for huge numbers of people in California who really don't have significant net worth, 0.4% of very little is still...very little. Income tax seems like an overall success to me. It's not a uniform rate; it's a progressive system. So if the net worth tax ends up being applied more universally and progressively, it seem like that vast majority of people not holding on to huge fortunes really have very little to worry about. Here's the thing about California -- people living there have gotten net-worth-wealthy from real estate, and they have been able to capture huge increases without paying appropriate property taxes (because it's such a bear to attempt to increase property taxes). This has shifted paying for state services to use-based taxes, which are as far from progressive as you get (well, not as far as social security contributions, but not far off either). What should probably happen: Figure out a revenue neutral approach that blends a net worth tax with a reduction in sales taxes. That puts money back in the pockets of people who most need it. Interesting experiment: What would the social security tax rate be if you didn't cap the maximum income it applies to? It's currently around 15% (individual and employer contributions combined). I have a vague memory of calculating that it would be around 4%, if you eliminated the cap (maybe that is individual-only, can't remember). In any case, social security is a poll tax, and the money flows straight into the general fund.

primrose 6y ago
> Income tax seems like an overall success to me. How would you quantify this? > people living there have gotten net-worth-wealthy from real estate 1. NIMBY's, excessive regulation, limits on building all drive costs up. 2. Scared money from over seas looking for safe haven in gateway cities. You're starting to see people flee CA in droves. Housing prices here will crash worse than the rest of the country. If the politicians don't reform laws and cut spending the state will turn into Detroit. > This has shifted paying for state services to use-based taxes Kicking fixed income grandma out of her house is immoral. People constantly moving due to property tax spikes is destabilizing. CA's is not lacking in taxes. CA is spending way too much. Other states are doing fine collecting a fraction of what we do adjusted for any kind of metric you can think of. > What would the social security tax rate be if you didn't cap the maximum income it applies to? You incur more liabilities. The contract is I pay more in, I get more out later. It's a safety net. We cap it so people have a minimum and don't die in destitution. > What should probably happen: Figure out a revenue neutral approach that blends a net worth tax with a reduction in sales taxes. That puts money back in the pockets of people who most need it. A wealth tax is opening a pandora box. Enjoy paying more accountants. You don't know how much something is worth until you sell it. Who get's to decide how much my paintings or my stock is worth? A politician? Why is it ok to tax someone on income they've already paid taxes every year for the rest of their lives. People will flee and no one will move here. Detroit. > social security is a poll tax No. A poll tax is something much much different.