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

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

#731

Earlier quoted context omitted.

You clearly haven’t thought through the implications of that policy. It is literally forcing the owner to write a call option against their asset that anyone can exercise and without the owner receiving a risk premium. Speculators and arbitrageurs would make a fortune acquiring these assets if the call option was written at fair market value. It would be like r/wallstreetbets but with everyone’s private property. Tha…

> You clearly haven’t thought through the implications of that policy. This isn't my idea; this is an idea proposed by an economist and a lawyer, who have both thought through the implications of such a policy. https://press.princeton.edu/books/hardcover/9780691177502/ra...

But they haven't thought through the implications. As far as I can tell, they ignore the implications of optionality which has mature mathematical frameworks for reasoning about such things. That's like making a Newtonian argument in a relativistic universe. People will analyze it in terms of options calculus even if the authors didn't -- I know I would.

I'd like to see an argument explicitly from the calculus of option theory, which is the operative mathematics here. I am not saying that a compelling supportive argument does not exist, just that a credible argument must be presented in these terms because that is the central mechanic. Maybe there are some subtle arguments that make it a good idea in this context but on the surface it is quite apparently a really bad idea with a lot of literature to support that impression.

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

#732

Earlier quoted context omitted.

Exactly. The US has one of the most progressive tax systems in the world. It hasn’t magically solved the wealth gap. Many people just want to punish the ultra wealthy, but it also won’t help. If it’s actually about raising revenue, you will need to actually look lower, to the top 10% and broader middle class. But this isn’t nearly as compelling as a populist message to fund the various proposed unicorns...

Really? The average income of someone in the top 1 percent is around 1 million, and the average income of the average person in the US is around 50k. So the top 1 percent have 20 percent of the income, so a 10 percent tax increase on the top 1 percent corresponds to a total increase of 2 percent, which isn't a small amount.

Taxes select for income brackets, not people.

Consider your example: 1mm is an average. You need about 300k/yr to be in the top 1%. So you make it a marginal tax on income above 300k? To actually collect 10% more taxes from that group, you would need strictly more than a 10% marginal tax. In practice, your marginal rate is probably 20-30%, since you would barely collect from the first ~0.5% (too close to 300k). If you have a marginal increase of 30%, you’re going to start to see significant changes in behavior, since dollars above 300k would be taxed at ~65%. (Since we’re talking about people taking in > 1mm/yr, that probably just means more retained earnings.)

The top 1% is already likely paying the full federal marginal rate on their income (or AMT at least), so even if you tried to take every last cent above 300k/yr you probably wouldn’t be able to increase revenue by more than 10%. (But this is a hypothetical only, as such a move would obviously result in less revenue than today, since no one would bother earning the dollars that are taxed at ~35% right now.)

So yeah, maybe you could squeeze all those people for a few % more revenue, but there’s not a ton more juice than that, and I’m skeptical that it would even work at all. But “taxing the 1%” is certainly not a game changer the way it’s spun.

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

#733

Earlier quoted context omitted.

I just feel very sad for you that you feel that way, because you don't believe you can get it unless you get given this thing first. About personal responsibility and choices, if you don't believe that then that's not something you can benefit from. I'm not giving you advice, it's your path not mine, and I don't want the karma nor responsibility for affecting yours, I'm simply sharing my feelings about these things.…

"Jeff Bezos received massive handouts" is not a feeling or a personal choice. It's a fact. I live in a fact based reality. I can't glean any meaning or value from your paragraphs of rambling about feelings. It would be completely idiotic if someone beat me in a marathon by starting on the last mile and then I look at that then say to myself "hmmm, I guess that guy just runs really fast."

I do feel really sad for you about this, because before reading your above reply i thought you will be more curious, and after reading it i see you are fixed in this way.

I see that's your perspective, and i also feel glad for you that you hold it confidently, because that must make things easier for you.

I'm not telling you how you should think or feel about this. Just trying to offer and share my own perspective.

I don't want to challenge your ease. I just thought this different perspective could make things easier for you, and now i see you don't want that. That's okay. At least you have the way you like.

For other people reading here i will give a reply to what this person said to share how i feel about it.

I can't glean any meaning or value from your paragraphs of rambling about feelings.

What you find there is what you bring to it. What you make it mean, and any value you get from your interpretation is your responsibility. I see now that this person cannot benefit from this because to them these comments are ramblings, without meaning, nor value.

I think they just don't want to believe it, because they already have the way they like, they don't want to hear something different, so they choose to see it as without meaning and value them, and maybe pretend it's without meaning, or value for others.

For me these ideas are very meaningful and valuable. For this person, zero meaning and value. That's okay. Everyone likes and chooses different things.

"Jeff Bezos received massive handouts" is not a feeling or a personal choice. It's a fact.

It's both. The fact is he received help. The magnitude ( the meaning and significance of ) of that help is a subjective feeling and interpretation that this person chooses to make about it.

you can observe the extent to which the subjective feeling and chosen interpretation distorts the fact by the subsequent example this person gives

It would be completely idiotic if someone beat me in a marathon by starting on the last mile and then I look at that then say to myself "hmmm, I guess that guy just runs really fast."

Here we have a loose analogy being made between 300,000 loan from parents and 100 billion dollar fortune and 25.2 miles out of 26.2 miles.

So one measure of the objective significance of the fact is 300,000 / 1 billion which is three parts in a million. but a analogous measure of the significance of the subjective interpretation and chosen feeling is 25.2 / 26.2, which is 96 parts out of 100. Comparing these two ratios you can find the subjective feeling and chosen interpretation is around 320,000 times more important than the objective fact to this person. I think this is interesting, a little sad, and a little funny that, while someone pretends to exist only in a fact-based reality, they allocate 320,000 times more importance to interpretations and feelings than to the facts. but I think this is a natural part of being human because our emotions and chosen interpretations are extremely important to us and not just in a distortion sense but they are what help guide us I think it's useful and important to acknowledge that. And I do believe it can be harmful to deny that but I think in this case the person genuinely seems happy and safe in his belief and that's its own kind of utility.

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

#734

Earlier quoted context omitted.

Police. Judiciary. Military. It takes a lot of infrastructure to defend property and property rights.

I see. Sorry I didn't complete the idea when "owning wealth" was used. I own money in a bank account. But I see now what he/she meant.

I mean, money in a bank account is also protected by the state: if the bank decides to just take your money, you can sue them.
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