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

#271

Post by woah » Sat, Dec 19, 2020, 5:07 PM UTC

AsyncAwait wrote: post #200

api wrote: post #177

Earlier quoted context omitted.

If California were well run, sure. Do something about the housing and homeless crisis and we’ll talk. California doesn’t have a money problem. They have a lack of political will problem and an incompetence (or corruption) problem. The state is held hostage by NIMBYs and is chronically unable to build infrastructure. Look at the high speed train disaster for an example of the latter. NIMBYs ensure that any money or ef…

> Do something about the housing and homeless crisis and we’ll talk You do realize a wealth tax is one way to bring in income to try to fix these problems right? You guys don't even have universal healthcare in the middle of a global pandemic. Laughably sad.

It’s not possible to build any new housing in California. The vast majority of projects are blocked by the powerful landowner lobby. Throwing money at the homeless problem doesn’t help the homeless much and just pushes property values higher. The government and tax system of California is a perfectly designed instrument to transfer wealth from newcomers to homeowners.

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

#272

Post by entee » Sat, Dec 19, 2020, 5:07 PM UTC

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…

Thing is we’ve done the experiment and it doesn’t work. France had a wealth tax (called the ISF, impôt sur la fortune) and it never actually garnered the expected revenues. This is because wealthy French people moved to Brussels, where you still have a pretty nice city and you can still speak French. Macron got rid of it and there was a mini-crash in Brussels real estate as people move back. There’s nothing stopping me or anyone in CA to move to CO or UT or TX. Sure I’m further from the ocean but those are still pretty nice places to live. I love CA and I’m very far from the $30M threshold, but if I did have this sort of tax it’s hard to justify not moving for lower taxes AND cheaper cost of living with very little downside. With the rise of remote work, there’s even less of a downside.

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

#273

Post by secabeen » Sat, Dec 19, 2020, 5:08 PM UTC

nthj wrote: post #199

carlio wrote: post #181

Earlier quoted context omitted.

Local governance running well, public services like cleaning, helping homeless etc, all require tax dollars. Saying "I'd pay tax if they had enough money they get from tax to fix the problems that cause me not to want to pay tax" seems like it's a bit of a chicken-egg problem.

This argument seems to make sense on the surface, but California already has some of the highest income taxes in the country. To make an appeal to extremes, if California had a 40% income tax they wanted to raise to 45% asking, “show me how you have demonstrated good stewardship in what you are already taking” would be, I imagine, somewhat common. Reasonable people can of course debate that percentage, and can do so…

California does have high income tax, but property taxes are some of the lowest in the nation, and a recent attempt to reform those taxes failed. That leaves California 12th in state tax burden.

https://wallethub.com/edu/states-with-highest-lowest-tax-bur...

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

#274

Post by [deleted] » Sat, Dec 19, 2020, 5:09 PM UTC

woah wrote: post #271

AsyncAwait wrote: post #200

Earlier quoted context omitted.

> Do something about the housing and homeless crisis and we’ll talk You do realize a wealth tax is one way to bring in income to try to fix these problems right? You guys don't even have universal healthcare in the middle of a global pandemic. Laughably sad.

It’s not possible to build any new housing in California. The vast majority of projects are blocked by the powerful landowner lobby. Throwing money at the homeless problem doesn’t help the homeless much and just pushes property values higher. The government and tax system of California is a perfectly designed instrument to transfer wealth from newcomers to homeowners.

[deleted]

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

#275

Post by Red_Leaves_Flyy » Sat, Dec 19, 2020, 5:10 PM UTC

matthewdgreen wrote: post #259

Trisell wrote: post #95

Earlier quoted context omitted.

I think your premise that they will experience French Revolution like consequences is overlooking the fact that unlike the 1700s. Up and taking your money to another country that still likes you is the click of a mouse and a private jet flight out. So no they won’t capitulate to higher taxes of earlier times. They will just leave. Like they already are at the threat of it.

The idea here is that it’s easy to find a safe, welcoming host nation with low taxes, and still be able to benefit from the functioning economies of the nations you left behind. However this is a pretty artificial system that only exists when there’s a lot of broadly-shared wealth and stability in the world. This kind of capital flight to the bottom is going to systematically undermine that stability. At the point wh…

Seriously. When 10000 m/billionaires decide to flee the states they're going to have bigger problems to contend with. These people have spent so many decades ignoring the poor they won't know they're actually fucked until their mansion in Beverly hills is on fire.

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

#276

Post by Scarblac » Sat, Dec 19, 2020, 5:11 PM UTC

admiralspoo wrote: post #210

adjkant wrote: post #111

Earlier quoted context omitted.

Maybe a percentage will, but I think when people are trying to guess and assume what these people will do as "rational economic agents", they miss the human factors. No one is going to pick where they go to college based on the taxes on the ultra-rich unless they are obsessed with money. Once rich, are you going to uproot yourself entirely from any family, friends, and connections in the US? You have to consider that…

Plenty already have. Eric Schmidt, for example, is now a citizen of Cyprus https://www.seattletimes.com/business/rich-americans-increas...

Which is why the proposal is based on where time is spent, not what you're a citizen of.

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

#277

Post by apsec112 » Sat, Dec 19, 2020, 5:11 PM UTC

If passed, this would be a huge incentive for the rich to avoid living in or even traveling to California, and not even so much for the amount of the tax as for the enormous decade-long legal, accounting, and compliance burden that would suddenly hook on to them like a barnacle. Every tax lawyer in the world would tell their clients that California is now radioactive: "touch it, and I'll be racking up $400 billable hours from now until your kids are in college".

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

#278

Post by ericd » Sat, Dec 19, 2020, 5:11 PM UTC

SpicyLemonZest wrote: post #29

zaroth wrote: post #18

Earlier quoted context omitted.

Where do you see that? It’s on “worldwide net worth”. That includes real estate.

The bill says: > 50306. Worldwide net worth shall not include any real property directly held by the taxpayer. (It does include real estate held through an LLC, though, so any smart commercial landlord is still going to be subject to it.)

Christ. Their broken property tax system is a big part of their problems, and they’re still avoiding it.

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

#279

Post by GhostVII » Sat, Dec 19, 2020, 5:12 PM UTC

rorykoehler wrote: post #229

granzymes wrote: post #171

Earlier quoted context omitted.

> Capitalism means capital that earns for you while you sleep. If it earns for you while you sleep then it is also taxed while you sleep. Income is income: the tax man doesn’t care where it comes from.

Income taxation creates a bureaucratic burden with no discernible benefit. We also disproportionately tax the poor via point of sale taxes which is just mind boggling stupid.

Wouldn't wealth tax also create bureaucratic burden? I would imagine that it is much harder to determine the value of the assets of all Americans than it is to determine their income.

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

#280

Post by mgolawala » Sat, Dec 19, 2020, 5:12 PM UTC

annexrichmond wrote: post #256

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…

Once the infrastructure is in place to assess this kind of tax, it'll be a matter of time before it starts applying to those with >10M wealth, then >1M, etc

Yup. It's called boiling the frog. I am not totally against wealth taxes, however I disagree with the approach.

What I do not understand is why not just implement a more aggressive estate tax on people and close the "trust" and "foundation" loopholes for avoiding the estate tax.

Let's take Jeff Bezos as an extreme example (who isn't even a California Resident). At least until we figure out immortality, Jeff Bezos will die someday. Let him enjoy the wealth that he has earned by creating a company that has benefited society as a whole. When he dies, his wealth should return to the society from which it came. He was rewarded for his work/ingenuity/effort during his life, and now that he is gone, society reclaims the rewards it had given him. What is wrong with that?

The way I see it, once you are dead you don't get a vote, and you don't get a say in the affairs of the world so you shouldn't be able to direct that wealth through any kind of inheritance, foundation or trust. His children have done nothing to earn or create that wealth themselves so why should they deserve any of it? They will have the same opportunities to create and earn wealth that he did, and they will benefit from the society he contributed to.

If they are able to build equivalent wealth via another Amazon.. Great! They earned it! if not that is fine too. You want to help your kids? Teach them how to fish for themselves instead of giving them an unlimited supply of fish.

Passing down wealth from generation to generation or directing wealth long after you are dead through foundations and trusts is directly opposed to any effort to give "equality of opportunity" for future generations.