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Washington state approves capital gains tax

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Re: Washington state approves capital gains tax

#201

Post by syshum »

harshalizee wrote: post #200
mattmcknight wrote: post #110

Earlier quoted context omitted.

It's more like the 7000 highest filers in any given year. The richest people may not be realizing capital gains. It's likely to affect people who happen to be selling their businesses that year, probably the only year they would ever fall into that group. It makes creating such a business and selling it while living in the state less attractive. Have to move to Texas before you sell?

That's completely nonsensical. I'm in Washington. I sold my options from my startup that was basically all profit last year and it was greater than 250k. Under this law, I would have coughed up 7% more in taxes. I'm not even remotely a highly paid dev. I just got lucky after years of being underpaid. This will affect way more people than just 7000 individuals.

The government always has to push the narrative that their tax increases will be on "them" the others, the people better off then you, not you. No no we will never increase YOUR taxes, we are only taxing "them" the ones that sleep on money and keep you down by not paying their "fair share"

Of course when the tax bill actually comes many people are often shocked they are included in "them"

Re: Washington state approves capital gains tax

#202

Post by twiddling »

triceratops wrote: post #199
philwelch wrote: post #58

Earlier quoted context omitted.

Even in a perfectly democratic system, 50.001% of the population can impose a government on the other 49.999%.

If it's that finely balanced and the government imposed by the 50.001% is really that terrible, the situation should fix itself by the next election cycle, right?

or they could storm the Capitol

Re: Washington state approves capital gains tax

#203

Post by syshum »

evo wrote: post #152
syshum wrote: post #123

Earlier quoted context omitted.

I think it is important to recognize that taxes when used for anything other then revenue are highly unethical and should be opposed by the population

I feel like they're one of the only tools we have collectively as a society to counteract "tragedy of the commons"/negative externality situations. Is a tax that brings the financial costs of an action in line with its distributed societal costs that unethical?

Government taxation is very very ineffective tool, and rarely accomplishes that goal. I would love for you to cite and example of a taxation scheme in use today that is right now countering an actual negative externality

Governments do not have a track record for being trust worthily enough to be placed in charge of controlling externalities, it would inevitably be used to usurp power, and liberty from the people, while unjustly enriching their political allies. This happens time and time again yet people still believe government is not only the "best" way to control things, but more stockily believe it is the "only" way to do so despite 1000's of years of historical record proving otherwise

Re: Washington state approves capital gains tax

#204

Post by qshaman »

triceratops wrote: post #198
bruiseralmighty wrote: post #194

Actual nonsense coming out of this government. As a life-long resident one of the main reasons I continue to work in Washington is the lack of an income tax. Exempting real estate is just an extra middle-finger to anyone young and trying to save. This is so painful and short-sighted. Earmarking for education is yet another typical smoke and mirrors 'saint-hood' performance that this government puts on for its low-inf…

> anyone young and trying to save It says the first $250k is exempt. Not a lot of young savers pulling down $250k in cap gains annually.

That was the FAANG stocks doing the thinking

Re: Washington state approves capital gains tax

#205

Post by lacksconfidence »

cmckn wrote: post #118
arrozconcosas wrote: post #74

Earlier quoted context omitted.

Haha yes ... earmarking funds for noble causes is the ultimate fake out. Lottery money all goes to noble causes right, right?

Depends on your state, but I guarantee the information is available to you. You can ask your state representative for more information if you're curious. Here's the 2020 financial report for WA's lottery: https://walottery.com/About/assets/docs/20AnnualReport.pdf Page 31 is probably what you're looking for. The majority of payments ($141 million) went to the Washington Opportunity Pathways Account, relevant statute h…

The concern is usually that (made up numbers) school is budgeted at 100M/yr from the general fund. Then they get a lottery that provides 30M/yr, and 100% goes to the schools. Now the schools have 130M/yr right? But the worry is instead they reduce the funds from the general budget to 70M. The lottery money all went to the schools, but the extra 30M went to the general fund.

Re: Washington state approves capital gains tax

#206

Post by snapetom »

ovulator wrote: post #161
snapetom wrote: post #88

Earlier quoted context omitted.

If I have a liquidity event at my startup, I'm going to be hit with this, right? Like many startup engineers, I've been taking less pay for shares for several years now. Funny, I don't feel like one of the richest 7000 individuals in Washington. And I guarantee you as an early engineer, I'm likely going to hit 250k, but get nothing close to founder cashout money.

If you got a $300k liquidity event. You will pay $3,500 in tax on it. If you worked at that job for 10 years at $30k less than normal, that is $7,600 a year that you didn't pay in federal income taxes on that missed income. Do the math, had you taken the income that would have been $76,000 in taxes over ten years vs $3,500 in taxes in one year.

You've made up some convenient numbers here to create a strawman.

If the liquidity is 500k, that's a $17.5k tax. I'm not going to stay at a job for 10 years for 30k less than market. That's a terrible decision. Most people would be looking after year 4, which is when options commonly fully vest.

With my made up numbers, that's a $30.4k tax over four years versus a $17.5 tax over one year. My made up ratio is far less appealing than your made up ratio.

Re: Washington state approves capital gains tax

#207

Post by [deleted] »

bruiseralmighty wrote: post #194

Actual nonsense coming out of this government. As a life-long resident one of the main reasons I continue to work in Washington is the lack of an income tax. Exempting real estate is just an extra middle-finger to anyone young and trying to save. This is so painful and short-sighted. Earmarking for education is yet another typical smoke and mirrors 'saint-hood' performance that this government puts on for its low-inf…

[deleted]

Re: Washington state approves capital gains tax

#208

Post by lostmsu »

qshaman wrote: post #204
triceratops wrote: post #198

Earlier quoted context omitted.

> anyone young and trying to save It says the first $250k is exempt. Not a lot of young savers pulling down $250k in cap gains annually.

That was the FAANG stocks doing the thinking

I don't think FAANG young engineers earn $250k cap gains a year.

Re: Washington state approves capital gains tax

#209

Post by giantg2 »

xxpor wrote: post #188
AnimalMuppet wrote: post #173

Earlier quoted context omitted.

So, this is a tax on certain kinds of income rather than all income . And it exempts the first $250K, so it's a progressive tax. So...

I don't think that matters. The relevant text: "All taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax and shall be levied and collected for public purposes only. The word "property" as used herein shall mean and include everything, whether tangible or intangible, subject to ownership." https://leg.wa.gov/CodeReviser/Pages/WAConstitution.aspx#AME... T…

"The SCOWA has said income is property. But it's up in the air if capital gains is income, or property."

How is that?

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