4 ms·

this feels... positive? spread the wealth a bit, lower real estate prices

by Justsignedup 3y ago

justrealist 3y ago
This basically just decreases NY/CA tax revenue from the investment firms, it does nothing to move the money.
- edgyquant 3y ago
  What does this even mean? The tax money moves to another state, so it’s being spread out.
  - readthenotes1 3y ago
    Unless the $2T moves to Texas Banks and trades on Texas exchanges (are there any?), The $2T stays where it is and so is irrelevant to the story, just there for the click baiting.
  - ska 3y ago
    Nothing in the article suggests the $2T moves. At most it suggests at least some of the jobs managing it will, but that's not the same thing.
  - kagakuninja 3y ago
    It is about race to the bottom - which state taxes corporations at the lowest rate, or has other corporation friendly laws. There is a reason why huge number of businesses are incorporated in Delaware, a state with a minuscule population of about 1 million. NYC by contrast has 8.5M. The residents of Delaware perhaps benefit in some minuscule way, but the money isn't being spread out.
- trelane 3y ago
  I think this is a deeper point that really gets to the heart of what's happening. If you or a corporation have some money, where does it reside? Unless the money is in something tangible (briefcase of cash, gold bullion, or real estate), it doesn't really reside anywhere. On the other hand, you do, which is what determines your tax liability.
  - lotsofpulp 3y ago
    An individual’s tax liabilities are different than a business’ tax liabilities, which are mostly dependent on where the services are received. Even independent contractors are subject to market based sourcing rules for determining tax liabilities, similar to how a store without a presence in your state still has to collect and remit sales tax to the jurisdiction that the item was shipped to.
    - trelane 3y ago
      Do you have links to read up on this? I know only if personal finance; makes sense that it's not correct for corporate.
      - lotsofpulp 3y ago
        I am not an expert either, and it seems each state has different rules. Searching some variation of “market based sourcing rules for income” should bring up relevant results. For reference, the method used before was typically called “cost of performance”.
dgrin91 3y ago
The wealth is not spread. The same few companies still control that $2T, they just moved their offices. All that happened is that now NY&CA lost some jobs/tax revenue.
- lotsofpulp 3y ago
  Did they even lose tax revenue other than income tax from some admin jobs? Most states have moved to market based sourcing rules for corporate taxes, so revenue is taxed where the services are received. If the clients are still in CA/NY, I presume it does not change much. In either case, changes in income quintile/decile would be a better measure than whatever this article is supposed to show.
  - koolba 3y ago
    > Did they even lose tax revenue other than income tax from some admin jobs? There's no doubt that there is more to lose than just the direct job losses. There's the GDP impact of those people traveling to the city, eating lunch, taking out clients, sticking around after work to socialize. It's not easy to put a number on it but it's definitely much larger than just the direct income tax losses. > Most states have moved to market based sourcing rules for corporate taxes, so revenue is taxed where the services are received. If the clients are still in CA/NY, I presume it does not change much. It doesn't work like that for managing assets as the client is delivering the assets to the manager in their jurisdiction. Where the manager's revenue is taxed is based on the location of those employees and the company headquarters. Not where the customer assets came from.
    - User23 3y ago
      I assume their vig is at least 1% if not higher too so that’s at least 20 billion in management fees. If I recall correctly NYC has a 1% income tax so the City alone is missing out on 200 million a year in tax revenue. Edit: thanks for the correction
      - woodruffw 3y ago
thevillagechief 3y ago
I hope to see a lot more of this kind of thing. I never liked or understood that massive Google San Jose project. Hope they change course and spread that investment around more of the country.
jayd16 3y ago
If it's moving to lower tax states then it's less spread, isn't it? The taxes should be progressive and more re-distributive than business profits. Real estate price changes are maybe good for NY and CA but of course you get rising prices in the new states.

this feels... positive? spread the wealth a bit, lower real estate prices

justrealist 3y ago

This basically just decreases NY/CA tax revenue from the investment firms, it does nothing to move the money.

edgyquant 3y ago
What does this even mean? The tax money moves to another state, so it’s being spread out.
- readthenotes1 3y ago
  Unless the $2T moves to Texas Banks and trades on Texas exchanges (are there any?), The $2T stays where it is and so is irrelevant to the story, just there for the click baiting.
- ska 3y ago
  Nothing in the article suggests the $2T moves. At most it suggests at least some of the jobs managing it will, but that's not the same thing.
- kagakuninja 3y ago
  It is about race to the bottom - which state taxes corporations at the lowest rate, or has other corporation friendly laws. There is a reason why huge number of businesses are incorporated in Delaware, a state with a minuscule population of about 1 million. NYC by contrast has 8.5M. The residents of Delaware perhaps benefit in some minuscule way, but the money isn't being spread out.
trelane 3y ago
I think this is a deeper point that really gets to the heart of what's happening. If you or a corporation have some money, where does it reside? Unless the money is in something tangible (briefcase of cash, gold bullion, or real estate), it doesn't really reside anywhere. On the other hand, you do, which is what determines your tax liability.
- lotsofpulp 3y ago
  An individual’s tax liabilities are different than a business’ tax liabilities, which are mostly dependent on where the services are received. Even independent contractors are subject to market based sourcing rules for determining tax liabilities, similar to how a store without a presence in your state still has to collect and remit sales tax to the jurisdiction that the item was shipped to.
  - trelane 3y ago
    Do you have links to read up on this? I know only if personal finance; makes sense that it's not correct for corporate.
    - lotsofpulp 3y ago
      I am not an expert either, and it seems each state has different rules. Searching some variation of “market based sourcing rules for income” should bring up relevant results. For reference, the method used before was typically called “cost of performance”.

dgrin91 3y ago

The wealth is not spread. The same few companies still control that $2T, they just moved their offices. All that happened is that now NY&CA lost some jobs/tax revenue.

lotsofpulp 3y ago
Did they even lose tax revenue other than income tax from some admin jobs? Most states have moved to market based sourcing rules for corporate taxes, so revenue is taxed where the services are received. If the clients are still in CA/NY, I presume it does not change much. In either case, changes in income quintile/decile would be a better measure than whatever this article is supposed to show.
- koolba 3y ago
  > Did they even lose tax revenue other than income tax from some admin jobs? There's no doubt that there is more to lose than just the direct job losses. There's the GDP impact of those people traveling to the city, eating lunch, taking out clients, sticking around after work to socialize. It's not easy to put a number on it but it's definitely much larger than just the direct income tax losses. > Most states have moved to market based sourcing rules for corporate taxes, so revenue is taxed where the services are received. If the clients are still in CA/NY, I presume it does not change much. It doesn't work like that for managing assets as the client is delivering the assets to the manager in their jurisdiction. Where the manager's revenue is taxed is based on the location of those employees and the company headquarters. Not where the customer assets came from.
  - User23 3y ago
    I assume their vig is at least 1% if not higher too so that’s at least 20 billion in management fees. If I recall correctly NYC has a 1% income tax so the City alone is missing out on 200 million a year in tax revenue. Edit: thanks for the correction
    - woodruffw 3y ago

thevillagechief 3y ago

I hope to see a lot more of this kind of thing. I never liked or understood that massive Google San Jose project. Hope they change course and spread that investment around more of the country.

jayd16 3y ago

If it's moving to lower tax states then it's less spread, isn't it? The taxes should be progressive and more re-distributive than business profits. Real estate price changes are maybe good for NY and CA but of course you get rising prices in the new states.