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California To Hit Startup Founders with Big Retroactive Tax Bills

xconomy.com

131–140 of 318 posts

Re: California To Hit Startup Founders with Big Retroactive Tax Bills

#131
post #61

To me this is a symptom of the twisted politics around taxation in the US. You have one very powerful group that is continually fighting to lower or eliminate taxes and another somewhat less powerful group that wants to bring in enough tax money to fund government services. One side cuts taxes or refuses to raise them and the other side finds new things to tax or other taxes to raise. Normally such a tug of war is no…

They are refusing to provide the funds necessary to run what you think a modern government should do.

Opinions differ.

Re: California To Hit Startup Founders with Big Retroactive Tax Bills

#132

Earlier quoted context omitted.

You don't know much about Vancouver if you think this is a realistic possibility. Vancouver, BC has barely any tech industry (a few software companies like Business Objects, and EA Sports are up there, but nothing meaningful), and the taxes are high. British Columbia has one of the highest tax rate in Canada. One of my Canadian friends told me that the 50% marginal tax rate started around $65k, although I haven't dou…

The corporate tax rate is actually lower than it is in the US though.

How much does Microsoft actually pay in corporate taxes to the US?

[0] https://encrypted.google.com/search?q=microsoft+tax+avoidanc...

Re: California To Hit Startup Founders with Big Retroactive Tax Bills

#133
post #46

As a business owner this crap terrifies me. Washington State was looking at changing their tax code retroactively to get more money from Microsoft, luckily level heads (and I might presume, extensive lobbying) prevailed. I can't plan today for what yesterday's laws will be tomorrow.

Come to Florida, it may be a red state but they stay out of your business and costs less.

I went to college in Florida. I love Florida. But their schools are no place to educate your children. Same goes for Texas.

Re: California To Hit Startup Founders with Big Retroactive Tax Bills

#134
post #63

Come to (western) Michigan. We have new corporate tax reforms that dramatically reduced liabilities (6% rate for C-Corps, flow-through taxation for LLCs and S-Corps, personal income tax rate of 4.3%), we have a 6% sales tax, low property taxes, very cheap housing (compared to much of the nation), well-educated workforce, and liberal gun laws (for the guy who wouldn't move to NY). Our 4.3% income tax rate is still low…

And the weather. You guys have that great weather as compared to say, oh, San Diego.

Re: California To Hit Startup Founders with Big Retroactive Tax Bills

#135
post #86

I'm not sure I would recommend Texas either. Use tax means you pay annual taxes on everything you own, plus sales tax on any affiliate deals; franchise tax will hit you hard even if your not making a dime because it's based on 'net worth' and not on profit. It's a tough place to be.

Everything your business owns? I've never paid a state tax when living in Texas (except for sales taxes), but I don't own land there.

Re: California To Hit Startup Founders with Big Retroactive Tax Bills

#136
post #76
post #60

Earlier quoted context omitted.

It's a red state and thus they stay out of your business and it costs less.

Texas isn't too shabby either. Plus, fewer natural disasters means less downtime.

Hopefully you aren't fond of electricity[0], water[1], schools[2], or roads[3].

0 - http://www.ercot.com/news/press_releases/show/26375

1 - http://droughtmonitor.unl.edu/DM_south.htm

2 - http://www.statesman.com/news/news/state-budgets-call-for-cu...

3 - http://www.statesman.com/news/news/state-regional-govt-polit...

(Texas is my home state. I left, though I keep close ties to it through family and frequent visits.)

Re: California To Hit Startup Founders with Big Retroactive Tax Bills

#137

Earlier quoted context omitted.

NYC has the most outrageous taxes in the country. You might as well be in France giving up 75%.

Yeah, it's rough. After federal, SS/payroll, NY state and NYC residential taxes, I take home 57.95% of my salary. I don't have the energy to find which state would give me the best deal, but I seriously doubt it's NY. :-)

salaries are a lot higher here than in a southern/midwest state though (largely driven by the crazy costs of housing).

Re: California To Hit Startup Founders with Big Retroactive Tax Bills

#138
post #34

I did a quick google and found a discussion of retroactive tax laws (applying to gift taxes in 2010): http://www.assetprotectionsociety.org/the-likelihood-and-enf... Potential arguments include due process, "wholly new tax", lack of notice, ex post facto (with the same caveat as mentioned here about applicability only to criminal cases), and the fifth amendment taking clause. Conclusion: it's hard to fight.

This isn't a retroactive tax law, its the implementation of a court striking down as unconsitution a statute allowing for a certain set of exemptions and deferrals from a pre-existing tax.

Re: California To Hit Startup Founders with Big Retroactive Tax Bills

#139

Earlier quoted context omitted.

Actually, California's budget is balanced and it expects a surplus in two years. http://www.nytimes.com/2013/01/11/us/california-balances-its...

Only after doing things such as threatening to cut 300 million from education unless folks raised taxes (retroactively as well). If your method of balancing the budget is always asking for more money, you haven't really balanced the budget. What are you going to do in a few years when those tax hikes expire, and you suddenly lose the same amount of revenue? I look forward to a few years when we begin to hear the clai…

As for the surplus claims: Of course the guy who supported the ballot initiative is going to say it's going to run a surplus.

The independent Legislative Analyst's Office, which had previously said Brown's budget would have had a $1.9 billion shortfall in November, now says that it is roughly in balance due to changes in income tax:

http://lao.ca.gov/reports/2013/bud/budget-overview/budget-ov...

If your method of balancing the budget is always asking for more money, you haven't really balanced the budget.

How is increasing revenues not a valid way of balancing a budget? And always asking for more money? Reagan raised the top income tax bracket in California from 7% to 10%. It now stands at 10.3%.

What are you going to do in a few years when those tax hikes expire, and you suddenly lose the same amount of revenue? I look forward to a few years when we begin to hear the claim in that we need to make the temporary hikes permanent, because we are running out of money again.

Considering most of the budget deficit is mostly due to California's substantial social safety net being engaged by the Great Recession, as long as the economy continues to improve, California will probably get by fine with the increased revenues of more people working and lessened burden of people applying for medicaid and unemployment insurance.

Re: California To Hit Startup Founders with Big Retroactive Tax Bills

#140
post #63

Come to (western) Michigan. We have new corporate tax reforms that dramatically reduced liabilities (6% rate for C-Corps, flow-through taxation for LLCs and S-Corps, personal income tax rate of 4.3%), we have a 6% sales tax, low property taxes, very cheap housing (compared to much of the nation), well-educated workforce, and liberal gun laws (for the guy who wouldn't move to NY). Our 4.3% income tax rate is still low…

Maybe you and the OP should come to Colorado instead... 4.63% flat-rate personal and corporate tax rate, and the 3rd best educated workforce in the country.

http://www.foxbusiness.com/personal-finance/2012/10/15/ameri...

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