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California plan for wealth tax on anyone who spends 60 days a year in the state
- Bostonian 6y agoungated: https://archive.is/v9pLw https://archive.is/v9pLw
- tingletech 6y agothe bill http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB2088 http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml...
- fortran77 6y ago> Today, California’s wealthiest 1% pay approximately 46% of total state income taxes. Adding the wealth tax to individual taxes and including those taxpayers who have abandoned California, the combination of the two proposals would have 1% of the state’s population paying about 53% of individual taxes. This is insane. That 1% will simply pick up and leave and the state will end up in a long expensive legal battle to collect from them all. And then who will be left to pay for everything? > For most taxpayers, the cost of compliance would far exceed the amount of the tax. A resident with a net worth of $31 million would be subject to a wealth tax of $4,000. The cost of an annual appraisal of each of that taxpayer’s assets could easily exceed $100,000. The state would have to hire auditors to chase people all over the world.
- Bancakes 6y agoRich people problems.
- fortran77 6y agoIt'll be our problem too. Whose going to pay for all our "free stuff?"
- deleted 6y ago[deleted]
- drewcoo 6y agoWe will, with our privacy and our freedoms? Hey - can I at least get my change back? No?
- wolco2 6y agoUntil it's everyone with a net worth of a million or 100k gets the tax. It will.. probably include everyone in the end.
- z3ncyberpunk 6y agocry me a river, that's way more than the average person has
- Bancakes 6y agoI think that's only possible in extreme inflation.
- cool_dude85 6y agoCan't be everyone! Something like 1 in 5 households has negative net worth.
- tonyhb 6y agoThe slippery slope fallacy.
- xiphias2 6y agoProblems of rich people and all other people who are employed by rich people. Elon is not the only person moving to Texas: all the new jobs created by him move as well. Also I'm a digital nomad, right now living in Brazil, and thinking of going on a trip to the US, but I have to make sure to be updated of these laws that don't exist in any other country in the world.
- Bancakes 6y agoGood thing most programmers don't fall for the silicon valley.
- AlexanderDhoore 6y agoSo 1% pays 46% of the taxes. Do they own more or less than 46% of the total capital? Because if they own more than 46% they should be paying more taxes. It doesn't matter that they are only 1% of people. What matters is how much they own (or at least how much they earn).
- eloff 6y agoIn America in general it's about 40% [1]. When put that way, California taxes seem about right as they are. [1] http://papers.nber.org/tmp/7707-w24085.pdf http://papers.nber.org/tmp/7707-w24085.pdf
- notacoward 6y agoThis point needs to be hammered home every time the rich (or their "hope to be rich" enablers) talk about what percentage of total revenue they pay. It's almost as if they think a poll tax would be fairest. They pay a higher dollar amount because they have more of what is being taxed, which in turn is largely because of a system that actively drives "rich get richer" disparities. You have to look at the rates not the dollar amounts. Is 46% of revenue on 40% of wealth that unreasonable?
- beezle 6y agoThe issue is the 'progressive' nature of the tax code. Everyone could be taxed at the same rate and the 'rich' would still pay the most in tax dollars. The only reason ever given for why the 'rich' should pay a higher tax rate is 'because they can afford to.' Which then leads to tax code legislative loopholes to try to offset the excess taxation and then more resentment when those loopholes are used to shelter income.
- notacoward 6y ago> The only reason ever given Not true. I just gave another reason - to offset the built-in drivers of disparity. Transfers between wealth and income (i.e. labor) always favor the wealth holder. It's the very nature of capital, part of what makes it so great but also with not-so-great consequences that must be compensated for. The problem is not the progressivity of taxation, but the fact that it's primarily on the wrong thing - income and consumption instead of wealth.
- throwaway2245 6y ago>California’s wealthiest 1% pay approximately 46% of total state income taxes > That 1% (which, unfortunately, I am in) This illustrates to me that the 1st percentile receives vastly more net income than the 2nd highest percentile (and that the stats should subdivide the 1st percentile further). Is this really unfortunate for you? I don't think so.
- da_big_ghey 6y agoCalifornia has progressive tax rates, so this is not entirely accurate.
- throwaway2245 6y agoCalifornia also has marginal tax rates, so what I said is accurate. Could you offer a counter-example?
- Hnrobert42 6y agoIt is insane. It is also insane that the system is so rigged in favor of wealth accumulation. An insane solution to an insane problem. I pay a lot in taxes, and I am good with that. I also give a fair bit away. The truth is I should make less, as should you.
- paulpauper 6y agobut living expenses are also very high, as is student loan debt and other recurring expenses
- Hnrobert42 6y agoWhat? I wasn’t advocating for people to make less than basic living expenses or to pay for education.
- BurningFrog 6y ago> The truth is I should make less, as should you. That some people make a lot of money is a good thing. The bad thing is those who make too too little money.
- ahelwer 6y agoThose things are linked. In our system, some people making a whole lot of money is predicated on others making too little money. I don't mean this in the zero sum sense. I mean that by far the most common way to make a lot of money in this country is by exploiting people.
- Hnrobert42 6y agoI agree with your bad thing. I disagree with your good thing.
- BurningFrog 6y agoIs this from a zero sum assumption? We can all get wealthier at the same time.
- yuppie_scum 6y agoNice edit
- deleted 6y ago[deleted]
- confidantlake 6y agoThe person with $30 million will pick up and leave over $4000? His moving costs alone are going to be greater than that.
- andrewmcwatters 6y agoI feel like I'm reading something off of Fark.com.
- AbrahamParangi 6y agoOf course it excludes real-estate. In California the only legitimate wealth is the land you inherit.
- zaroth 6y agoWhere do you see that? It’s on “worldwide net worth”. That includes real estate.
- SpicyLemonZest 6y agoThe bill says: > 50306. Worldwide net worth shall not include any real property directly held by the taxpayer. (It does include real estate held through an LLC, though, so any smart commercial landlord is still going to be subject to it.)
- ericd 6y agoChrist. Their broken property tax system is a big part of their problems, and they’re still avoiding it.
- raverbashing 6y agoNIMBYism or in English: F the younger generation, we got ours But who knows who'll pay for the extortionate rents if the whole thing falls apart
- jamiesonbecker 6y agoNothing like old money.
- tasubotadas 6y ago>Taxing someone who spends only 60 days in the state in any single year—and extending that tax over an ensuing decade—would be something new under the sun. Wow. That's nuts.
- sunshinerag 6y agoNo. Progressive.
- umeshunni 6y ago"progressive" like most Californian things.
- Shivetya 6y agoYeah, this won't make it past the courts let alone the economic damage its going to cause California and loss of some of the brightest college students. Who knows what your wealth profile will be after you move out? Let alone anyone who inherits wealth, will California want a piece of that even if the property is wholly outside the state? This is basically an act of desperation which will be wrapped under some fanciful class warfare and sadly also rife with cut outs to avoid offending specific groups. If they would clamp down on industries rife with funny money accounting, namely the music and movie industry, they might not have to go after individuals. However people always think this will stay at certain income and wealth numbers don't fully understand who exactly is paying the bills. While it easy to point to this percentage of people paying half the money the rest is equally important. Example, in NYC it is estimated that eighty percent of taxes is from less than twenty percent of people earning a hundred thousand per year. While skewed to the much higher end the fact is this eighty percent on income taxes is twenty two percent of the total tax revenue in the city. Finally, all of this that is happening in California is on top of a thirteen percent marginal rate which is highest in the country being over half again as much as New York.
- carapace 6y agoYah, this sounds batshit insane to me. And I'm a SF-grown Left-leaning freak.
- 6y ago
- ryanmarsh 6y agoGreat way to help further diversify the Texas economy. I want to thank the Californians who voted in these politicians.
- deleted 6y ago[deleted]
- Mountain_Skies 6y agoWhat makes you think those same Californians won't follow these companies to Texas?
- hakdbha 6y agoThose poor rich people
- spacehome 6y agoYou may regret that. The problem with Californians emigrating elsewhere is that they don’t stop voting like Californians.
- cmdshiftf4 6y agoUnder the assumption that the policies they pursue are damaging, as implied above, would that make Californians essentially a virus?
- post_break 6y agoThe problem most Texans see is they flea California, realize it’s different, and vote for the same stuff they had there. A lot of Texans do not want California transplants. Just like how Montana doesn’t want Texans.
- SpicyLemonZest 6y agoI’m sure there are some people who think like that, but is it really “most”? I don’t remember any prominent groups saying that Elon Musk’s move is bad for Texas, for example. Any policies that Texans love are going to be safe, because even if migration became so large that California transplants made up 5% of the population, they wouldn’t be able to flip votes on anything 60%+ of Texans agree on.
- civilized 6y ago> IF YOU SO MUCH AS SET FOOT IN OUR STATE WHILE HAVING LIQUID ASSETS WE WILL NEVER STOP HUNTING YOU k, very normal stuff, carry on
- skinnymuch 6y agoInteresting that they aren’t saying that anything close to your sarcastic quote.
- civilized 6y agoAh, my bad, yes being taxed for ten years because you were in a state for two months is nothing like what I said
- caseysoftware 6y agoI'm not sure what the problem is. When Democrat supporters demand more more more via the politicians who promise more more more, where did they think the money would come from? Believe it or not, the bottom ~50% don't have enough money to tax. The next 30-40% have some but not enough to raise enough money to help. The taxes have to be focused on the top 10% and more likely the top 1-3% to raise enough to meet these demands. I think the biggest problem will be trying to enact this on people who aren't California (or even US) residents who are now out of state. You can tax visitors for actions they take while they're in your state (sales tax, hotel taxes, even income) but when they're not there and haven't been there for years? The State of California may get a rude awakening on this one.
- herbst 6y agoIsnt the us taxing basically everyone even if they moved somewhere else years ago?
- jhfdbkofdcho 6y agoAs a rough approximation, if you’re a US citizen, then You must file a US income tax return. The US taxes your worldwide income regardless of where it’s earned. BUT under most circumstances you would get a credit against what you owe the US for what you pay the country in which you earned the money and also wanted to tax you (no double taxation in theory) It’s kind of a pain for someone living in say Kenya which doesn’t have a tax treaty with the US, but it’s not totally absurd to think you owe something to a country whose citizenship you continue to benefit from.
- eatbitseveryday 6y agoHow do I benefit from a country while not being in it?
- ceejayoz 6y agoThe right to return and still be eligible for things like Social Security and Medicare.
- zbrozek 6y agoDoes anyone know the mechanism by which they can possibly make the out of state tax stick? If it doesn't, I'd probably move to the Midwest. If it does, there are other citizenships.
- paul_f 6y agoI assume the same way they enforce it now. Get a judgement against someone and seize their assets (bank account)
- todd8 6y agoThe federal government does something worse, you pay federal income tax on all income no matter where it is made and what country you are living in (with the exception of some deductions for income taxes paid to other countries one is living in). Other countries only make you pay taxes for income generated there. Even if you give up US citizenship, which requires something like paying taxes on all unrealized gains and ten years of projected earnings before they let you out of the US, the feds still go after your estate for estate taxes when you die no matter how long you have been gone from the US. And good luck getting back in for a visit after relinquishing your citizenship. This all started with laws passed after the Dart family, wealthy for styrofoam cups, gave up their citizenship and left the US (how dare they!), see [1]. [1] https://www.latimes.com/archives/la-xpm-2008-jun-15-fi-perfin15-story.html https://www.latimes.com/archives/la-xpm-2008-jun-15-fi-perfi...
- mamon 6y agoBenefits of being the only global superpower. Believe me, other countries would gladly do the same, they just lack the aircraft carrier fleet to support such policy.
- DoofusOfDeath 6y agoI don't think military power is the key here. I think having so much of international banking tied to the U.S. may be the relevant lever.
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- throwaway2245 6y agoThis proposal is 0.4% tax on wealth above $30m. The Dutch equivalent is 1.6% tax on wealth above €1m. The number of Ultra High Net Worth Individuals in the Netherlands is still increasing.
- Mountain_Skies 6y agoThe difference here is that California is a state not a country. It's much easier for a wealthy person or company to relocate to another state than it is to another country. The EU may have made it easier to relocate to another EU country than it was in the pre EU days but it's still nowhere as frictionless as moving from California to Washington, Texas, or Georgia.
- throwaway2245 6y agoSure, but it seems that HNWIs are moving into the Netherlands, also despite this difficulty of relocation.
- skinnymuch 6y agoOP says people are moving into Netherlands. That’s effort. Not just not moving out.
- threatofrain 6y agoI'm not sure those execs getting citizenships are actually moving in as opposed to buying an expensive property and making some kind of investment.
- skinnymuch 6y agoAh. Do they not have to pay Dutch taxes then? Aside from property related ones?
- Metus 6y agoAnd the Swiss ask for 0.13% and 1.01% depending on the Canton, pension funds are exempt.
- fallingfrog 6y agoIn any economic system where the more money/property you have, the faster you can earn more, wealth inequality will naturally increase over time until a tiny group of people own everything and everyone else is immiserated. Unless there are very progressive taxes or other mechanisms to correct the imbalance. It’s just always amusing to me how apoplectic the ultra rich get at the suggestion that their taxes get raised. The future of the nation literally depends on it. They really do want to collect the wealth generated by the working people of the country and not pay for the public services that maintain that population.
- 1_2__4 6y agoWhy in heavens name is a WSJ opinion piece getting any traction on HN? Why would anyone with half a brain believe anything in such a piece? It’s some of the worst partisan garbage media out there right now and it’s being discussed here as if it’s factual reporting. What is wrong with you?
- inglor_cz 6y agoInsanely good weather is not an universal counterweight to every hare-brained idea that the political class may come up with. This sounds as a repellent to foreign capital as well, not just richer Americans.
- deleted 6y ago[deleted]
- hakdbha 6y agoWon’t someone please think of the wealthy? In fact, why don’t we just further subsidize their lifestyle some more? Let’s forget that the rich in other countries pay more and whine less for paying their fair share
- moralsupply 6y agoThis is probably the first HN thread in 2020 where the majority of the posts complain about taxes as opposed to be supportive of them.
- hartator 6y agoIt hits home for them. Not an abstract “rich” category anymore.
- ryandrake 6y agoWait, you mean that many HN readers have net worth of $30 million or over, and therefore they are personally worried about it? I'd guess 99.5% of commenters here will never be subject to this tax in their entire lives. And even if they barely make it above the threshold, say they have $31,000,000 net worth: That results in a tax liability of a whopping $4,000. Whoop-dee-doo. The anti-tax rants here are just the usual run-of-the-mill white-knighting for wealthy people.
- belltaco 6y agoTitle should be 'anyone with over $30m of non-real estate weath', not just 'anyone'. It's highly misleading to basically say everyone.
- DoofusOfDeath 6y agoI see you point, but the phrase "wealth tax" does help.
- xiphias2 6y agoIt should be just the opposite: real estate is the limited resource that all people in California need to share, not the revenue of a multi-national company concentrated in 1 state.
- bserge 6y agoHow would this be enforced? Is it even possible to track people who spend 60 days in the state?
- beagle3 6y agoThere are already lots of tracking to prove/disprove 183 days, as it would already dictate which state is entitled to tax more/first. E.g. people who commute between NJ and NY or somehow do their work in both often have to justify to one (or both) state why they shouldn’t be taxed there.
- inglor_cz 6y agoGive Zuck personal exemption for cooperation.
- josho 6y agoMake it voluntary reporting with high punitive fines for those that are caught not reporting. Pretty sure there are enough people making low wages that would be happy to report these folks if they suspected their bosses were dodging a tax.
- adjkant 6y agoWell I guess I'll take the apparently bold stance here that this isn't the end of Silicon Valley or California and yes this is fair and further, good. When people are getting 5-6% returns on investments (minimum), 0.4% is still not even stopping the rich get richer effect. Not to mention that it's almost certain no one here will ever be touched by this tax. If you're going to move where you live or significantly alter where you spend you time because of 0.4% of things above 30M, that's a real sign of just how far American greed has gone. The rich will drive themselves right into another french revolution unless they start realizing that taxes need to return to where they were from the 1930's-1970's. Trickle down economics is a known failure and at this point it's a question of when the pendulum will start swinging the other way.
- Trisell 6y agoI think your premise that they will experience French Revolution like consequences is overlooking the fact that unlike the 1700s. Up and taking your money to another country that still likes you is the click of a mouse and a private jet flight out. So no they won’t capitulate to higher taxes of earlier times. They will just leave. Like they already are at the threat of it.
- adjkant 6y agoMaybe a percentage will, but I think when people are trying to guess and assume what these people will do as "rational economic agents", they miss the human factors. No one is going to pick where they go to college based on the taxes on the ultra-rich unless they are obsessed with money. Once rich, are you going to uproot yourself entirely from any family, friends, and connections in the US? You have to consider that rational economic behavior still has to consider what the point of it all is, and money for the sake of money doesn't tend to be the answer even among the hyper-rich. What these people will come to terms with is a pretty age-old lesson - there are things more important than just how rich you are, and most of those are human. So long as they can maintain their lifestyle, I think many will want to stay. Needing to find 20K in a couch cushion to pay for your 5M in assets each year that you make 300K on won't be the thing that makes you move. Of course, the rich today also have many legal shields and layers that will protect them from real french revolution violence. But I think anyone can feel the shift right now. Go on Tiktok and see just how many young people are getting real into eating the rich :)
- suddenstutter 6y agoCalifornia is retarded
- DoofusOfDeath 6y agoCan someone explain what the limitations are on a state's ability to levy taxes? E.g., are there any Constitutional barriers to one state charging income tax on someone merely passing through? Or, e.g., could CA tax the income of someone who is no longer a resident? What mechanisms if any proscribe that kind of money grab?
- beezle 6y agoIf anything applies it probably would be the commerce clause
- da_big_ghey 6y agoTBH if I stood to lose as much as many California billionaires, I'd leave, ignore the warrant for my arrest, and just not go back to California.
- ur-whale 6y ago> Can someone explain what the limitations are on a state's ability to levy taxes? Ask yourself who owns the most guns, and you'll get your answer.
- NiceWayToDoIT 6y agoIs it me or things are getting crazier every single day, why not planetary tax, air tax, water tax, volume occupation tax, tax on tax?
- yhoneycomb 6y agoA wealth tax isn't crazy. What's crazy is NOT having a wealth tax and instead more heavily taxing people who are actually working for a living.
- beezle 6y agoSeems far crazier to base spending not on a predefined amount of revenue appropriate for the various levels of government but instead on what those governments would like to have or do and then finding ways to pay for it (taxes or debt).
- NiceWayToDoIT 6y agoIt is not crazy to tax rich I agree, but what constitutes as rich? How do you grantee that tomorrow they will not tax every IT worker who is staying bit longer in California?
- confidantlake 6y ago>but what constitutes as rich Well according to this proposed law it is over $30 million in wealth. >How do you grantee that tomorrow they will not tax every IT worker who is staying bit longer in California? There is no way to guarantee that a hypothetical won't happen.
- deleted 6y ago[deleted]
- GhostVII 6y agoPersonally I disagree with the whole idea of wealth taxes, you should be taxed when you do things, not taxed just because you own something worth money. I should be able to go live in the woods alone and not have the government take some percent of my net worth just because I exist. I mean I don't have a tonne of sympathy for people with tens of millions of net worth, but it just seems wrong in principle. If I start a company and it gets valued at 30 million dollars, why should the government be allowed to force me to sell my company to pay their wealth tax? Seems wrong to me, if you own something you should be allowed to keep it indefinitely. Property taxes are a bit of a grey area, but they make more sense because of all the infrastructure required for a house to be accessible. Or another example, I own a piece of art or a car passed down through my family that is worth 30 million dollars (maybe it's a mclaren f1 or something). Now the government is going to force me to sell my car? I disagree with that, obviously that's an extreme case, but laws should still handle cases like that.
- GavinMcG 6y agoI don't think they should be routine, but given the highly unbalanced taxing environment of the past few decades which allowed for such massive wealth to accumulate (and rapidly grow during the pandemic) I see them as a reasonable corrective. It also doesn't have to be ham-fisted. The concerns you bring up are legitimate and legislation is able to account for them.
- tsimionescu 6y ago> If I start a company and it gets valued at 30 million dollars, why should the government be allowed to force me to sell my company to pay their wealth tax? How is the government forcing you to sell your company? They're forcing you to pay 0.4% of the money you own over those 30M dollars in tax, but that's it. Do you truly believe that there are people who make less than 0.4% per year profit on their >30M assets?
- DuskStar 6y agoThis is startup land, where billion dollar companies lose money... So yes.
- ausjke 6y agoI took on contract jobs once a while, so far I rejected all the chances from CA, partially due to the 13.5%(?) income tax, that made its price non-competitive, plus, I hate to file a CA state tax, I'm used to no state income tax for decades. I never live in CA, does not use its transportation/police/schools, why do I need pay for this state income tax shit just for remote work?
- jostmey 6y agoWhat I regret about the debate of “wealth” is how it is created. Is it obtained by a zero sum game or by benefiting everyone. I think taxes should reflect this
- nondeveloper 6y agoI don’t agree with this tax but one of the great things about this country is that each state can experiment. California is experimenting with higher state income taxes. Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming are experimenting with having none. I think distributed work will win this decade so people will be much more mobile than before. There will be a tighter feedback loop for policy makers to learn what works and what doesn’t.
- 762236 6y agoThis is unenforceable. California has no Texas Rangers that can hunt you down in other states. California has no standing in another state's courts for collecting this tax. And that's a good thing too. Consider child-support payments --- they require states to cooperate. But you may never be able to enter California again.
- Meekro 6y agoUnfortunately it's not that simple. California (and every other state's) law already says that their taxman need not go through the courts to seize assets but can do so directly. If their tax collector contacts you and you ignore them because you don't live there, they'll just seize the money from your bank account (no matter where you are) and you'll be stuck litigating in California tax courts to try and get it back. This already happens routinely-- look up the various cases of people who left California, and then the state came after them under the theory that they never really left. Here's a case[1] where they spent 25 years harassing a guy who moved out. Even if you leave the country, you can be extradited since failure to pay tax is a felony. Unless you went to Russia, which doesn't extradite. [1] https://reason.com/video/2017/10/23/gilbert-hyatts-25-year-battle-against-ca/ https://reason.com/video/2017/10/23/gilbert-hyatts-25-year-b...
- 762236 6y agoThat's bad.
- deleted 6y ago[deleted]
- not2b 6y agoThis was a proposal from back in August, and the election of Joe Biden probably means it won't happen. Why does that matter? Because Trump was treating California like an enemy country and trying to destroy it, starving it of resources even though California taxpayers (individuals and companies) pay far more to the federal government than any other state does. It would be better to do a wealth tax at the federal level. It really isn't conceptually different from a property tax on real estate, it just applies to all wealth.
- seanmcdirmid 6y agoThis is just a proposal in the legislature: it isn’t clear if it has any real support for becoming an actual law yet, or if it will pass muster with the courts if it does.
- frogblast 6y agoThis is fearmongering. The bill was introduced a year ago, went nowhere, and is now dead. This WSJ article was published a month after the bill was officially killed… The broader legislature has no interest in such a tax. This is the bill in question: http://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=201920200AB2088 http://leginfo.legislature.ca.gov/faces/billStatusClient.xht... Edit: also note that this article is on the WSJ opinion page, and didn’t come from the news desk.
- secabeen 6y ago> Edit: also note that this article is on the WSJ opinion page, and didn’t come from the news desk. Thank you. We really need news websites to some how more clearly delineate opinion pieces from news desk pieces. In the old days, you knew which was which based on what page of the paper it was on. A standard that has all online opinion pieces published with a colored background or something would really help.
- annexrichmond 6y agoThere is a logo at the top that says WSJ OPINION and it says "OPINION COMMENTARY" above the headline. Maybe it's easy to miss for someone's first time on the site, but I've personally never had any issue. Also when WSJ posts to social media they prefix the headline with "Opinion"
- hedora 6y agoIt’s in squished, gray hard to read type, and not in the bounding box formed by the article title and the story. I’m sure an eye tracker study would show that few people read that part of the page.
- annexrichmond 6y agoThere is a sticky header with the WSJ OPINION logo as your scroll down the article [1] What more do you want? [1] https://imgur.com/a/7uN5UUX https://imgur.com/a/7uN5UUX
- deleted 6y ago[deleted]
- ur-whale 6y agoThe hungriest leech state in the US declares it's still not sated. This doesn't bode well for California.
- testfoobar 6y agoThe source of wealth inequality is the Federal Reserve. The Federal Reserve uses its ability to create monetary reserves to rescue holders capital at every juncture. The Fed has created a massive asymmetric system. This year the Federal Reserve bought bonds of Apple. Why? Taxing wealth is trying to fix the system at the end point instead of fixing it at the source of the problem. https://www.cnbc.com/2020/06/29/the-fed-is-buying-some-of-the-biggest-companies-bonds-raising-questions-over-why.html https://www.cnbc.com/2020/06/29/the-fed-is-buying-some-of-th...
- rivertijg 6y agoOne more financial reason to move to Austin I guess. As if there weren’t enough already: https://www.thriftythoughts.io/silicon-hills/ https://www.thriftythoughts.io/silicon-hills/
- ur-whale 6y agoI find the idea lovely for the following reason: I am a great believer in the idea of competition, especially between nation states, and in the US, between states. If California were to ever make such a dumb move (I'm 99% sure they wont'), they are going to create tons of opportunities for nearby states as all the rich folks will move elsewhere with their capital. Please, California, keep on taxing the goose with the golden eggs. Politicians should be playing more Sim City.
- nondeveloper 6y agoI strongly agree. Competition is good for everyone. There are 50 states, many of them nice places to work, live, and have a family. We moved to Utah from California this year and have loved it.
- deleted 6y ago[deleted]
- abeppu 6y agoI think it's worth contextualizing this bill by comparing against other wealth tax proposals that have bounced around in recent years. Stiglitz has mentioned a 2% wealth tax for over $50M and 3% over $1B. https://www.cnbc.com/2020/09/17/economists-stiglitz-and-piketty-us-needs-a-wealth-tax.html https://www.cnbc.com/2020/09/17/economists-stiglitz-and-pike... Elizabeth Warren's proposal was 2% for over $50M and 6% for over $1B https://elizabethwarren.com/plans/ultra-millionaire-tax https://elizabethwarren.com/plans/ultra-millionaire-tax Bernie Sanders had a proposal that started at 1% for values over $32M, 2% for $50M-$250M, 3% for $250M-$500M, 4 percent from $500M-$1B, 5% from $1B-$2.5B, 6% for $2.5B-$5B, 7% for $5B-$10B and 8% for >$10B. https://berniesanders.com/issues/tax-extreme-wealth/ https://berniesanders.com/issues/tax-extreme-wealth/ Piketty suggested phasing in much earlier and more aggressively, at 5% beginning at 2M Euros. https://www.cnbc.com/2019/09/12/billionaires-should-be-taxed-out-of-existence-says-thomas-piketty.html https://www.cnbc.com/2019/09/12/billionaires-should-be-taxed... People should save their panicked pearl-clutching for when a real wealth tax proposal comes. 0.4% almost sounds like not a serious number. Yes, California's bill is at a state level. But then, California is larger than many countries. Is it really so inappropriate for California to consider taking even small steps towards ... well at this rate not decreasing inequality, but marginally slowing its rate of increase? To me, the crazy part of this isn't the idea of a wealth tax, nor the fact that it includes a prorated tax for part-time residents. (If anything, it's weird that ordinarily we expect that the first 89 days per year of your involvement in any state are "free" for income purposes, but not for consumption taxes.) To me the crazy part is that we're willing to begin this conversation without first getting rid of prop 13. If the motivation is to decrease actual economic equality, how on earth do we justify this policy that allows people to pretend that their most valuable assets are worth far less than their actual value?
- apsec112 6y agoIf passed, this would be a huge incentive for the rich to avoid living in or even traveling to California, and not even so much for the amount of the tax as for the enormous decade-long legal, accounting, and compliance burden that would suddenly hook on to them like a barnacle. Every tax lawyer in the world would tell their clients that California is now radioactive: "touch it, and I'll be racking up $400 billable hours from now until your kids are in college".
- doggydogs94 6y agoThe biggest attraction to California is the fantastic climate. At some point (higher tax levels) though, even the climate cannot hold you.
- nondeveloper 6y agoThe climate is great. The parks and wilderness areas are great. But you know what? This a beautiful country and it would be shame to limit yourself to one place.
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- justinzollars 6y agoThe tax rate will never be high enough for the California Government. It is so mismanaged the only plausible solution is a default on its endless obligations. California should eliminate its income tax through ballot initiative. Moving it, from the highest in the nation to zero. Thats right. Zero. Can you imagine how awesome California would become with no income tax? Everyone would instantly get a 10% raise. The quality of everything would go up and the cost of everything would go down. Standards of living would instantly go up. Other states provide a much higher standard of living with zero tax. California can do it too.
- ashconnor 6y agoOther states raise revenue by other means. Look at Texas property taxes. Also Oregon Income Taxes are about 3.5% different than California. Is it really that different?
- chance_state 6y ago"Cut taxes and everything will magically get better." Can't believe people still buy this bullshit.
- dang 6y agoCould you please stop posting unsubstantive and/or flamebait comments? You've unfortunately been doing it a lot lately and we're trying for something different here. We've had to ask you several times already, and when accounts keep ignoring these requests eventually we have to ban them. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- asdff 6y agoCA needs income tax because the property tax situation has hobbled the government for the past five decades. AS mismanaged it may be, Newsom did inherit a budget surplus and if it weren't for the pandemic things would be relatively stable.
- Gibbon1 6y ago
- karl11 6y agoI can only assume this is California’s version of seppuku.
- abeppu 6y agoI think this whole thing could be simultaneously more palatable, more progressive and actually more effective if it was coupled with a commitment to actually meaningfully redistribute the proceeds, rather than just treat them like any other part of the general fund. The UK has discussed the idea of a "Universal Inheritance", provided to young adults, from a dedicated sovereign wealth fund. Their proposal was that the whole thing should be funded by inheritance taxes, but I don't see why a wealth tax wouldn't be just as appropriate. California already has CalPERS and CalSTRS. https://www.independent.co.uk/voices/universal-minimum-inheritance-citizens-wealth-fund-norway-oil-revenue-inequality-a8284691.html https://www.independent.co.uk/voices/universal-minimum-inher... If the motivation of a wealth tax is to decrease actual inequality, that goal might be more tangible putting cash into the hands of a 20 year old kid than being poured into some mismanaged capital project.
- rrss 6y agoAn important tidbit not noted in the opinion piece: AB 2088 died in committee when the CA legislature adjourned in August.
- jelliclesfarm 6y agoIt might not affect a lot of people and it won’t make a dent for the high net worth folks, but on principle, I oppose it. A better option for California would be to make it a tax free haven. And institute a flat consumption tax.
- sambull 6y agoWe really need a way to better tax institutional owners over a certain size that inflate our real-restate market. No more Invitation Homes moving into a areas buying all the 'entry level' homes jacking rent by 30%+ in months and... rinse repeat. Owning tens of thousands of properties shouldn't be a thing that is incentivized in a country full of homeless where most people can only dream to ever own a house.
- jboydyhacker 6y agoAside from the problem that Wealth Taxes have been tried multiple times in many countries and failed, or the fact that enforcement would be more expensive than the revenue collected- I think most people object to the idea of taxiing people who pass through for 60 days then keep taxing them for a decade of their life to support a state doubling spending with no real improvement in infrastructure, health, education or our citizens well being. The highest taxes in the country to support what? San Francisco for exampple, has doubled it’s budget in 10 years with the population growing only 12%. The California legislature keeps passing highly creative yet extreme anti wealth measures while massively increasing spending. Can anyone say life in San Francisco has improved in the last decade? By any objective measure it's far worse. Not just for tech but for small business in particular- the regulation, taxes and cost of doing business in the state are oppressive. Yet we want to enact more policies to drive out the tax base? Brilliant. The top 1% of taxpayers supports half the budget of the state. Instead of speeding this exodus up, why not enact real reform. The state needs a revolution- a massive reset in spending from ground zero- not a bunch of new taxes that force even more companies out.
- nell 6y agoDoes California citizens enjoy a far better lifestyle than other states that is cannot be attributed to natural gifts?Two things I can think of 1. No non-competes 2. State FMLA What else?(real question, not rhetorical) Does this warrant the taxes collected + the raise?
- throwawaysea 6y agoWealth taxes are immoral and should be illegal. Someone can play by the rules, pay all the taxes as they go, and then suddenly have what they’ve already earned confiscated under threat of government force? I feel like that’s normalizing a world without private ownership of anything. After all, a wealth tax would mean that the government can change its mind and seize what you own retroactively at any time. What separates such a “free” society from China? Property taxes are similarly immoral because they undermine private ownership. Not to mention, with the government’s famous lack of efficiency and accountability, all the stolen wealth wouldn’t accomplish much. California already has an enormous public bureaucracy and has nothing to show for it. There isn’t a single public amenity or service that is any better in California than states that have lower taxes, smaller governments, and higher efficiency. Washington is a great historical comparison point for this (although the politics of WA have changed significantly in the last decade and it is turning into CA). I’m also concerned that this is going to reduce the attractiveness of CA as well as the US more broadly for economic activity and innovation. Why would the next wave of builders trust in an environment and government that could take away what they’ve worked hard to build and earn?
- option 6y agoThis is just moronic. Any tax should serve two purposes: (1) provide funds for the government to serve public and (2) incentivize the “good things” and disincentivize the “bad ones”. What does this proposal achieve for the second point??
- anm89 6y agoThis is utter insanity but California is going to reap what it sows. California is going to be massively insolvent and in default within in a decade.
- xyst 6y agoGiving yet another reason for the rich to move to a lower COL area/state, buy up all of the housing inventory, and raise the COL in their new area.
- dave_4_bagels 6y agoWhy would anyone with a "real" job want to live in CA or god forbid move to CA? I'm honestly stunned? Does CA understand how basic economics work? You can hate rich people all you want, but at the end of the day they're the ones starting companies and employing people. When are they going to start thinking about limiting spending instead of just finding more ways to wring dough out of people who make an honest living. For those who disagree with me, please make an argument that in the U.S. making $120k is not an "honest" living...
- honkycat 6y agoThis needs to happen. We need to start taxing the rich and implement our social security nets again. Like they do in almost every other civilized nation. Where is the line? And how have we not crossed it already? How many americans have to go bankrupt or die from medical debt? How many people need to be evicted and live on the streets? How large do the homeless camps need to become? How uneducated and ignorant do people need to become? How desperate and unstable do the lives of the not-upper class have to get? How full do our prisons need to be? How wretched do our forests and streams need to become before we change?
- noetic_techy 6y ago60 days, wow the level of stupidity. Once again another case of good intentions, bad outcomes. I'm a lead for a company that sends engineering teams into CA for probably 3-4 months total spread out over a year. Now we would have to totally reconsider how that will go. God forbid one of the team got sick for an extended hospital stay. Their travel costs are reimbursed, but what if they accidentally fall victim to the wealth tax (more like wealth trap), would the company be liable to cover it for a decade? How absurd does that sound. Anecdotal story: I was born and raised in CA up to 2005 when I left for college, so was my father and mother. My entire immediate family has since left for either CO, FL or TX, and more extended family are following. We were all high net worth and have small business's or well paid STEM jobs. My uncle is about to move his entire business out of the state because the level of regulation and taxation is getting ridiculous. The other week he visited my parents in TX and marveled at how well maintained the roads were and how cheap the gas was, with no shanty towns along the freeways. The mismanagement of CA is out of control. Everyone I know that has left is so glad to have left at this point and hasn't looked back. The exodus of high net worth individuals to other states who don't think they are evil money hoarders will simply keep occurring until CA wakes with no money and a federal government refusing to bail them out. You can't vote NO on proposition bankruptcy.
- notsureaboutpg 6y agoIt sucks because I have always believed in many of the ideals the Democrats have (I'm a socially conservative, i.e. religious, Democrat). I've always thought the government should be a refuge for the sick and the poor and the downtrodden in society. But the best way to describe CA is mismanaged. Accidentally giving out $2 billion to fraudulent unemployment claimants? Spending more money on social issues like drug abuse and homelessness only to have record after record smashed in levels of both. It's sad, but I really wonder if the compassionate thing is to resist the policies that sound compassionate because clearly, visibly they don't work.
- nullc 6y agoWealth taxes are extremely invasive. Commerce is inherently visible (because it necessarily involves other people). What you own is private. The cost of even figuring out your net worth is substantial and would still be borne by people nowhere near the threshold... in fact, in the case of this bill everyone is required to report their assets to the state. The aggregate cost just from the reporting would probably dwarf the revenue. Regardless of your politics or your views on taxation this is plan and simple a bad law. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB2088 https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm... (Bill text)
- namesbc 6y agoWould be so much simpler at the federal level, but if states have to do this first due to the Senate being undemocratic, then perhaps that is the best way.
- neonate 6y agohttps://archive.is/v9pLw https://archive.is/v9pLw
- rubicon33 6y agoThis bill died in August of last year. Never made it out of committee.. is it being brought back? Unlikely to pass constitutional review.
- say_it_as_it_is 6y agoJust in time for the mass exodus from California.
- greyhair 6y agoThere are a lot of interesting laws about what transpires if you stay somewhere 'too long'. And most of these laws are suspended for college students, simply because if they were enforced for students, then the out of state students would suddenly be candidates for in-state tuition. My wife and I plan to travel extensively in retirement. We have traveled a lot so far in life, but only one week here, two weeks there, limited by vacation time. When we travel in retirement, we plan to stay two to four weeks in each place we visit, away from home for months at a time. Except that if you are in your home state for less than six months plus one day, residency becomes and issue (in almost every state) and can have tax implications. Most people never have to face that situation, but I have one close acquaintance that has dealt with this issue for the last five years as a resident of Florida. He says that if the state suspects that you are skirting the edge of your residency requirements, they can request your non-specific state-based cell phone data for the calendar year, and it will be provided to the state. It won't be fine grained location data, but it will say how many days you were in that state.