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Thing is we’ve done the experiment and it doesn’t work. France had a wealth tax (called the ISF, impôt sur la fortune) and it never actually garnered the expect
by entee 6y ago
Thing is we’ve done the experiment and it doesn’t work. France had a wealth tax (called the ISF, impôt sur la fortune) and it never actually garnered the expected revenues. This is because wealthy French people moved to Brussels, where you still have a pretty nice city and you can still speak French. Macron got rid of it and there was a mini-crash in Brussels real estate as people move back. There’s nothing stopping me or anyone in CA to move to CO or UT or TX. Sure I’m further from the ocean but those are still pretty nice places to live. I love CA and I’m very far from the $30M threshold, but if I did have this sort of tax it’s hard to justify not moving for lower taxes AND cheaper cost of living with very little downside. With the rise of remote work, there’s even less of a downside.
- daveFNbuck 6y agoI think that's why they put in the provision that you have to keep paying the tax for 10 years after you move.
- AnthonyMouse 6y agoThat's probably the stupidest part of it, because then you convince all the people who imagine they're going to be Elon Musk in ten years that they should leave California immediately.
- ip26 6y agoThe interesting part is the next question you have to ask yourself- could Elon have built what he did somewhere else?
- ishjoh 6y agoVCs prefer investing in companies in NYC and the Valley. So Paypal would have probably had to be built in one of those two markets. Once he had a successful company, I suspect he could have gone elsewhere and still received investment and convinced enough talented people to come join his projects. So I think for Elon in particular the answer is yes, but there might have only been a single other place he could have started in the USA, and we're specifically talking about Elon.
- AnthonyMouse 6y agoBut that has a related cause and effect. The reason these things have happened in California isn't the geography. If you drive a large fraction of the same people out and into places like Austin through excessive housing costs and high taxes, then the next Elon Musk can build it there instead. Because it's the people, not the place.
- ip26 6y agoYou can see why that's obviously a chicken-and-egg circumstance though.
- nitrogen 6y agoTexas Instruments was probably not founded in California, so the center of mass could easily shift again.
- runarberg 6y agoDon’t be surprised if Texas (in particular Austin) adopts similar tax measures. I bet there is just as much public support for it—if not even more—then in California.
- AnthonyMouse 6y agoIf Austin adopted it, people would just move two miles outside the city limits. And the state of Texas as a whole is not going to do that.
- runarberg 6y ago> The state of Texas as a whole is not going to do that. What makes you so sure of that? Texas has a huge middle and working class. If asked I bet majority of Texans wouldn’t mind taxing their upper class. I think it is only a matter of time before politician is able to win over this vote share by targeting the state’s richest for taxation.
- 6y ago
- atomi 6y agoHonestly, I fantasize about a California with population levels pre-Gold-Rush, pre-Dust-Bowl and pre-Silicon-Valley.
- chaostheory 6y agoWhy not just move to a place like Idaho or Wyoming instead? You can have it right now instead of dreaming about it.
- atomi 6y ago_You_ go to Idaho and Wyoming. California is our state.
- chaostheory 6y agoI’m sorry, but you have me confused with someone else who is fantasizing about “a California with population levels pre-Gold-Rush, pre-Dust-Bowl and pre-Silicon-Valley”. I wasn’t being sarcastic with my previous comment
- atomi 6y agoMy qualms are more with the demographic changes these massive migrations brought. Just very greedy overly ambitious and pretentious people. To me they make terrible neighbors and have zero regard for the land, nature or the people here. Some I assume are good people but I haven't met any.
- chaostheory 6y agoSo you’re a Native American who’s lived in the times before these massive migrations?
- atomi 6y agoDo you actually mean Californio? https://en.wikipedia.org/wiki/Californios https://en.wikipedia.org/wiki/Californios
- chaostheory 6y agoYou only need a state with an Austin adopt a ban on noncompetes, or a state that currently bans noncompetes that miraculously develops an Austin. Once either happens then it’s game over for CA. The end of Silicon Valley’s dominance could have come much sooner had China continued its trend of opening up pre-Winnie the Poo’s reign, but that threat is gone for now. China is crippled under a dictator again
- medium_burrito 6y agoStrongly agreed on all points. If WA, TX or NC ban noncompetes its basically over for CA. All of these areas have some great universities, major airports and a solid tech base already.
- runarberg 6y agoHow many people actually believe they will become the next Musk, to an extent that they are willing to move out of state in preparation to maximize their greed in the off chance they will succeed in this impossible task?
- nitrogen 6y agoProbably a decent fraction of founders hope to reach the point where the tax would come into play. Maybe some other locale can use this to finally convince VCs and startups to cluster somewhere else.
- asdfasgasdgasdg 6y agoYeah this is a "don't live here if you plan to ever be rich" law. Fortunately that part of the law is unlikely to be constitutional.
- rattray 6y agoKind of a lot of people in the Gold Rush State. Between the dreamers of Hollywood and Silicon Valley, a lot of folks go there to become wealthy. And even if only a small fraction do, it's still more than almost anywhere else in the world.
- endtime 6y agoDo you know what the "ycombinator" in this site's URL is a reference to?
- runarberg 6y agoAre you talking about the startup accelerator or the functional combinator used to achieve recursion without naming a function that calls it self?
- wincy 6y agoThat’s why if the tax gets implemented they’re gonna move away before the tax is implemented. Imagine being a slave to a state you don’t even live in for ten years. What a load of garbage, I’ll bet any other state will refuse to enforce it.
- titzer 6y agoSlaves work for no pay and cannot leave. You are suggesting a tax on (massive) wealth you already have is the same? > Bill No. 2088 would have created a new annual tax of 0.4% on individuals with worldwide annual wealth over $30 million;
- chipotle_coyote 6y agoWhile I'm dubious about both the legality and wisdom of this proposed tax, I confess I'm having trouble seeing "paying a 0.4% tax on wealth over $30M" as being "slave to a state." Yes, metaphor, but it's a metaphor of "reducing my $50M estate to $49.92M might as well be forced servitude," and, uh, no. C'mon. Put that $50M somewhere that averages even a modest 4% annual return and you could pay the tax, draw out $600K a year (I mean, you can live on that, right? Not a hardship?), and still have another $600K left over. The people who would actually be subject to kind of tax would not, in an actual monetary sense, be adversely affected by this kind of tax, and we're really falling back on to crying BUT IT'S THE PRINCIPLE OF THE THING. And, fine, but also ironic -- after all, that's also the rationale for imposing the tax.
- xhkkffbf 6y ago$50m * 0.004 = $200,000. You might be interested in this nice lottery the state also offers. Some call it a tax for those who are bad at math.
- scrollaway 6y ago20m * 0.004 = 80k. GP isn't bad at math, you just fail to understand how these types of taxes work.
- axaxs 6y agoThere's zero chance that gets enforced.
- jelliclesfarm 6y agoMaybe. But the point is someone thought of it. And we elected that genius. That’s scary.
- ashtonkem 6y agoHow is that possibly constitutional? It seems like giving states the right to tax the wealth of residents in other states is a really bad door to open.
- meowster 6y agoThat sounds a bit like taxation without representation.
- alibarber 6y agoWould it not make more sense if the law was, move _back_ within 10 years and you need to pay the whole lot? I've seen that sort of thing in a lot of places before.
- cashsterling 6y agoI have a feeling that portion will be struct down in court.
- bendbro 6y agoHa, my cold dead hands
- AnimalMuppet 6y agoSo if one year I spend 60 days in California, I owe the tax for the next 10 years? That seems indefensible. In fact, if they implement this, I'm pretty sure there's going to be a Supreme Court case, and IANAL, but I suspect California will lose.
- laurent92 6y agoThe best bet of each other state is NOT to send this to SCOTUS, because then they will all benefit from an accelerated exode: - Cali has concentrates most of the entrepreneurship... of the entire world for the next century, so a bit of decentralization would be a trickle-down equivalent, - There is already an exode to Texas, - This rule will make people move, - And also cancel all their meetings in Cali, to avoid reaching anywhere close to the 2 months per year threshold.
- AnimalMuppet 6y agoIt doesn't have to be the states filing suit. It can be the rich taxed individuals. They can buy the kind of lawyers it would take to effectively run that lawsuit.
- raverbashing 6y agoYeah, I can understand the debate for higher taxes in some cases but 60 days will make you liable for 10 years is a bad joke. This means people from other states won't even risk visiting
- patcon 6y agoIs this also your perspective on something like unit testing when your first regression slips through? No, you fix it. Law is code, and needs tuning. When people as so inclined to give up on first failing, then I feel it says more about their underlying worldview than it does about what's possible in the world.
- CitrusFruits 6y agoI'd say taxes are less comparable to something that would justify a unit test and more comparable to UX. There's a huge human element that you're just never going to be able to fully control. Entee is just outlining why this approach probably won't work, not saying we shouldn't adjust laws at all to serve all people. TBH, I think your comment says more about your worldview than his.
- patcon 6y agoSorry, "unit tests" prob made it sounds like I think more stochastically than I actually do. Was just trying to use jargon of this place. As a longtime community organizer, the messy human stuff is def where I prefer to operate :) > Thing is we’ve done the experiment and it doesn’t work. My main reaction was discomfort with one observation of a legislative failure being used to advocate discarding a hypothesis * shrug * EDIT: But thanks for reply to my lazy and poorly framed comment!
- ip26 6y agoYes, but we've also run the race-to-the-bottom experiment and it doesn't pan out well either.
- thatfrenchguy 6y ago> This is because wealthy French people moved to Brussels, where you still have a pretty nice city and you can still speak French Meh, as a French person, the number of people who did this is pretty low. People hid their assets sure, but the FTB is a bit better at this than the fisc is ;-)
- entee 6y agoI can’t say what percentage of wealthy people did this versus just regular asset hiding, but it happened enough to be visible among Belgians (my family lives in Brussels). Either way, hiding assets is relatively easy if there are millions of dollars on the line. Also, moving to CO or UT is even easier than moving to Belgium from France. Put another way, the more complicated the tax, the easier it is to find loopholes. It’s basically impossible to write a simple wealth tax. If you do, you end up capturing people who shouldn’t be captured (for example a founder with illiquid stock and purely paper wealth). I’m actually all for taxing income pretty heavily especially in a progressive manner. Better yet, tax consumption. I think a luxury consumption tax, especially one that penalizes things like expensive cars, jets, boats, and similar would be a more effective way to tax the rich.
- mattmanser 6y agoGenuine question, as that doesn't sound like a a fair experiment. Couldn't they just limit the amount you can emigrate from the country with. So if you emigrate, you can only take a maximum of, say, €10 mill. i.e. earn it in France, using French laws, a French education and French infrastructure, it stays in France. Obviously it clashes with EU free movement, but basically the problem seems to be we can't tax the rich because they take advantage of globalism to move their money around. Isn't the solution to stop them moving it, rather than giving up?
- nec4b 6y agoYou mean something like a Berlin wall to stop the people leaving the paradise or a new kind of serfdom, where one should be tied to the land in which he was born?
- throwaway316943 6y agoNailed it, serfdom was implemented exactly for the purpose of preventing tax evasion. Something something... doomed to repeat it.
- markus_zhang 6y agoThey have great influences among the lawmakers. Rich people won't get themselves taxed(in general)
- throwawaysea 6y ago> the problem seems to be we can't tax the rich because they take advantage of globalism to move their money around The problem is that different places have different values and policies and compete with each other? The problem is that people have the audacity to disagree with governments and seek out different ways of living? Sorry but any proposal that disincentivizes or punishes free movement is atrocious and totalitarian. And I mean that literally.
- ABCLAW 6y agoI dunno why this is downvoted. This phrase: "the problem seems to be we can't tax the rich because they take advantage of globalism to move their money around" Is a tiny distillation of one of the most difficult problems facing legislators intending to mitigate wealth inequality across their society: if the rich get upset, they can just take their toys and leave. This is, from the perspective of legislative generations, a very new problem that has crystallized in the past 40 years with the expansion and standardization of international trade law.
- piffey 6y agoParis to Brussels: 3 hours by car, 1 by plane. San Francisco to Denver: 26 hours by car, 3.5 hours by plane. Hardly a comparison. Can't do an easy commute to the office with that. Most people with that wealth won't burn the money on uprooting their companies.
- deleted 6y ago[deleted]