California plan for wealth tax on anyone who spends 60 days a year in the state • Hacker News Board

Re: California plan for wealth tax on anyone who spends 60 days a year in the state

#211

Post by mmcconnell1618 » Sat, Dec 19, 2020, 4:46 PM UTC

GhostVII wrote: post #96

Personally 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…

I've got several concerns with wealth taxes in general too:

1) They are difficult to enforce. How to measure the value of a famous painting? What if the value does down? Is there a refund of wealth taxes?

2) They are an entirely new class of taxes that will give politicians the ability to increase the overall tax burden over time. At first, they will only impact the very wealthy, but it is much easier to adjust the threshold down a little than create a whole new tax.

The history of income tax in the US is a guide. At first, it was temporary. Then only impacted a few people, now it is a progressive system that reaches large swaths of the population.

https://en.wikipedia.org/wiki/History_of_taxation_in_the_Uni....

Re: California plan for wealth tax on anyone who spends 60 days a year in the state

#212

Post by notacoward » Sat, Dec 19, 2020, 4:47 PM UTC

beezle wrote: post #176

notacoward wrote: post #33

Earlier quoted context omitted.

This 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…

The 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…

> 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.

Re: California plan for wealth tax on anyone who spends 60 days a year in the state

#213

Post by beezle » Sat, Dec 19, 2020, 4:47 PM UTC

yhoneycomb wrote: post #148

NiceWayToDoIT wrote: post #75

Is it me or things are getting crazier every single day, why not planetary tax, air tax, water tax, volume occupation tax, tax on tax?

A 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.

Seems 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).

Re: California plan for wealth tax on anyone who spends 60 days a year in the state

#214

Post by bluedevil2k » Sat, Dec 19, 2020, 4:47 PM UTC

AlexanderDhoore wrote: post #5

fortran77 wrote: post #3

> 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…

So 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).

The same kind of “what’s their share” argument is made by conservatives to say “everyone gets the same share of services from the state, taxation should be more even”. You can’t just arbitrarily decide that a small group MUST pay more than the share they get out.

Re: California plan for wealth tax on anyone who spends 60 days a year in the state

#215

Post by legulere » Sat, Dec 19, 2020, 4:47 PM UTC

PragmaticPulp wrote: post #77

caseysoftware wrote: post #26

I'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 d…

> where did they think the money would come from? There’s a growing misconception that everything can be paid for by simply taxing the wealthy a tiny bit more. Several prominent activist politicians have built their platforms on the idea that billionaires are an infinite source of consequence-free tax revenue. These ideas are especially popular among the college students and new college grads I mentor. It usually fal…

The US currently taxes the rich extremely low when compared to other countries or the US in the good old times. All this was rationalized with trickle down economics which have turned out to be utter nonsense. The wealth of those unfathomable rich was built on top of the society they live in and are part of. The acquired wealth is so beyond comprehension that the idea that any one person could have such a big positive impact alone to justify it is just absurd.

Re: California plan for wealth tax on anyone who spends 60 days a year in the state

#216

Post by emteycz » Sat, Dec 19, 2020, 4:48 PM UTC

jamiltron wrote: post #205

emteycz wrote: post #137

Earlier quoted context omitted.

That means the workers will have absolutely no problem founding their own business and there is no need to tax Bezos.

That's not what that means at all. Founding a business requires a significant investment of capital.

It doesn't necessarily require the founder investing large amounts, Bezos began with a small investment - and a lot of ingenuity.

My own business began this year with $0 and I'm way past $100k. I had to live in my car for two months, absolutely worth it though, it helped me focus like never before. I created excellent product and then spent a lot of time both online and offline finding customers.

And now imagine you do this, and after all the shit you went through people start saying you don't deserve your money, completely ignoring the huge risk you made and the opportunity cost behind you, and that YOU MADE THE THING. What would you think?

Re: California plan for wealth tax on anyone who spends 60 days a year in the state

#217

Post by ur-whale » Sat, Dec 19, 2020, 4:49 PM UTC

The hungriest leech state in the US declares it's still not sated.

This doesn't bode well for California.

Re: California plan for wealth tax on anyone who spends 60 days a year in the state

#218

Post by GavinMcG » Sat, Dec 19, 2020, 4:49 PM UTC

robocat wrote: post #201

GavinMcG wrote: post #118

Earlier quoted context omitted.

> Because you are effectively not a member of that community anymore People have the choice of giving up their U.S. citizenship. > Yet simply to retain the right to return the US at some point, they must pay taxes every year in the middle? Yes? Or do we allow everyone who isn't participating in our society as a citizen would to come and go as they please?

> People have the choice of giving up their U.S. citizenship. Sure, but if you have more than $2MM assets then you must pay an exit tax. From: https://1040abroad.com/faq/renouncing-u-s-citizenship/ “The Exit Tax that you, as a covered expatriate, would have to pay is calculated as if you have sold all of your assets at Fair Market Value on the day prior to your relinquishment, and the associated capital gains are sub…

Of course. Your capital gains would be taxed upon sale if you didn't leave; should fleeing the country allow you to avoid that?

Letting people take advantage of all the US offers while paying no tax on their growing wealth, and then letting them retire elsewhere without having put in their fair share makes no sense. Of course, we could stop taxing capital gains so favorably, as an alternative.

Re: California plan for wealth tax on anyone who spends 60 days a year in the state

#219

Post by csa » Sat, Dec 19, 2020, 4:49 PM UTC

jandrewrogers wrote: post #182

adjkant wrote: post #68

Well 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 alte…

The taxes from the "1930's-1970's" were not particularly high, that is a misunderstanding of how the structure of the tax code has changed. Net of deductions, taxation hasn't changed that much. You can't look at the nominal tax rates in isolation while ignoring the scope of deduction against those rates. Eliminating deductions for high-income earners while reducing tax rates on that income is revenue neutral, and gen…

Thank you for pointing this out.

Many people, especially at HN for some reason, don’t realize that the Tax Reform Act of 1986 made tax rates more transparent which is why the “sticker rate” was lower.

Interestingly, the former tax rates often times screwed the middle class much more, because they couldn’t afford an accountant and/or engage in the wide range of financial maneuvers that could substantially reduce one’s tax burden.

No higher earner ever paid sticker price tax rates when they were that high.

Source: My mother. She has been a tax accountant since the 70s. The Tax Reform Act changed the field considerably.

Re: California plan for wealth tax on anyone who spends 60 days a year in the state

#220

Post by stickfigure » Sat, Dec 19, 2020, 4:49 PM UTC

blovescoffee wrote: post #194

GhostVII wrote: post #96

Personally 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…

There are of course exceptions but in most cases that $30 million+ could only have been made because of the system that exists within California/USA. Paying taxes on that $30 million is just a way to support the stability of such a system that allowed an individual to make that much money. How many people with very little wealth actually inherit a $30 million car? Probably few enough that it would be more constructiv…

This seems to be the Californian version of "American Exceptionalism". Yes, California has some great things going for it. But so does Washington and Oregon and Texas and Colorado. Relative tax rates matter, especially for people as mobile as the ultra-rich.