331–340 of 691 posts
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Tesla employees lots of people who pay income tax. Capital gains is taxed on the residence at time of sale, not time of purchase. So if Musk sells when he’s not a resident of CA, he won’t pay CA taxes.
Nope. CA taxes you on the shares you earned in the state, regardless of where you sold it.
California's housing issues are complex and not likely to be remedied quickly. This sounds like a completely reasonable plan at first glance.
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His tax situation really has nothing to do with it. If he sells his Tesla shares, he's still going to owe CA tax. But he never has to sell any Tesla shares, he can just buy hedges against them and take out loans. If you have sufficient capital assets, you never have to actual earn any "income" or generate any "capital gains" if you don't want to.
> But he never has to sell any Tesla shares, he can just buy hedges against them and take out loans So he takes out a $1 billion loan, and he offers $1 billion in stock as a security, and then also buys a futures contract (or a put option) on his $1 billion of stock to lock in the current price, so if the stock goes down in value over the life of the loan, the lender doesn't lose their security? And then when the loa…
If it's hedged you actually don't have any upside so you will always be 'underwater' on the loan assuming >0 interest rate.
If interest rates were higher, it probably wouldn't make sense to do this endless loan trick[1]. Say you get charged 5% on this loan or you could pay 30% cap gains. It would only take 5 years for the interest payments to outstrip the upfront hit on the tax.
1. This is very simplistic though, as likely the $1bn would be invested in some way that would kick off some return, probably enough to cover the interest.
California's tax regime is really backward. I suspect Tesla's departure is just the tip of the iceberg and that the repeal of the SALT deduction in 2017 really hastened this trend. High earners pay an effective tax rate of > 50%. They are partially picking up the slack from Prop 13, which artificially distorts the housing market by allowing longtime homeowners to pay property taxes based on decades-old assessed value…
I’ve long suspected that the Democratic obsession with federal policy is to try to reduce the appeal of other states where companies may want to move. It’s often seemed like people in California would prefer that a manufacturing operations operate in Asia and come through their ports rather than operate in the middle/south US.
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Property taxes are _much_ higher in Texas than California, in fact Texas has one of the highest property taxes in the nation (because there's no income tax, and TX still needs to fund itself somehow; TX also has one of the highest sales taxes for this reason, too). You pay the same on property taxes for a $400k house in Texas as a $1M house in California. Not only that, CA has Prop 13: for better or worse, your prope…
This is a huge reason that property values are cheaper in Texas. Either you pay high property tax rates on (relatively) cheaper property or you pay exorbitant rent to your landlord that just keeps escalating. There is very good evidence that property taxes are capitalized into property values. Land taxes in specific are fully capitalized (which is to say, they lower the price of the land, and the landlord can't pass…
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I feel like orwellian is the wrong term. Isn't that geared more towards the thought police and how you feel about the government's politics? Not if you're homeless or not? I don't think OP meant anything by his post. California's policies are lax. Regardless if you think they're deserving of consideration or not, it's miserable to have a huge homeless population living next to your house. People may pretend its not r…
The homeless are also people who live somewhere, just not in houses. "Lax" implies that treating them harshly would be better. But fining and jailing them isn't going to make them more able to get a place to live. Aggressive anti-homeless policies just hide the suffering from the well off.
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They're not the only company in the region: https://en.wikipedia.org/wiki/Silicon_Hills
It was the example used and the list from that website its tough to tell which companies were satellite offices vs which were corporate/research HQ. Not trying to belittle Austin - I know they have a tech scene - and I know every city is trying to capitalize on marketing their city as the next silicon valley (which is such a ridiculous thing to do for an incredibly long list of reasons).
Anyone have a running list of enormously rich people moving from California to Texas to avoid being taxed on a windfall and ostensibly justifying it with insert reason here ? So far I have Joe Rogan with his spotify deal and now Musk with some of his options coming up for payday.
Both will have to pay CA taxes regardless. The California tax board does not mess around. Rich people are generally more afraid of them than the IRS (which has become toothless in recent years).
Good. This will both alleviate pressure on the Bay Area as well as accelerating the political shift to the left in Texas. It's a win all around. I actually think that living in the Bay Area as a tech employee is increasingly unjustifiable from an ethical point-of-view. It was once the case where that was necessary for many career paths but that's increasingly not the case and the pandemic has hastened that shift. Why…
Tech being concentrated in the Bay Area certainly exacerbates inequality and cost of living increases, though the fault is less individual workers and more corporate leadership and VC firms insisting on concentrating there even when it might not be geographically necessary. The sad thing though is that it seems even when you disperse highly paid workers who can work from home, inequality will continue even in other m…
NYC is clearly an expensive place... kind of. Manhattan obviously is really expensive but there are 4 other boroughs plus the Hudson Valley, eastern New Jersey and Long Island that are all within commuting distance.
Even with NYC prices, I content that lower-income workers are significantly better off in NYC than the Bay Area. Let me give you a concrete example. I just went onto Streeteasy and found a 2 bedroom apartment in Astoria for $295k [1]. It's a 30 minute commute to Midtown [2]
Even better, it's by public transit so no need for added expensive of buying, parking, maintaining and putting gas into a car.
You simply won't find anything equivalent in the Bay Area.
> Then again, those markets were booming even before tech workers moved to there.
I don't think that matches the data. Depending on what segment you look at prices in the Bay Area have almost doubled since 2012 [3].
[1]: https://streeteasy.com/building/21_27-33-street-astoria/sale...
[2]: https://goo.gl/maps/dvrUrWX88F1jM6gn9
[3]: https://www.bayareamarketreports.com/trend/3-recessions-2-bu...
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This being Texas, I suppose Austin has fewer restrictions on new development, so housing prices may be less crazy. To say nothing of taxes, which leave more of your wages to pay the rent.
Your intuition is shared by many, but it is a little off. Lots of low/middle income Californians actually have a higher total tax burden in Texas.[1] And I’d guess that Austin is one of the places where cost of living is highest for Texas, reducing the net quality of life profit. Also, residential expansion in those two places is a bit of apples and oranges. Bay Area is surrounded by water, mountains, and Open Space…
Land and more land is one solution. Density and more density is another, so the downtown can actually grow bigger and bigger; if people are willing to live closer to everything, they have a better chance than in SF (but still a far cry from NYC or Chicago).