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

#531

Post by dennisgorelik » Sat, Dec 19, 2020, 7:34 PM UTC

tsimionescu wrote: post #97

PragmaticPulp wrote: post #77

Earlier quoted context omitted.

> where did they think the money would come from? There’s a growing misconception that everything can be paid for by simply taxing the wealthy a tiny bit more. Several prominent activist politicians have built their platforms on the idea that billionaires are an infinite source of consequence-free tax revenue. These ideas are especially popular among the college students and new college grads I mentor. It usually fal…

The most important point of taxing the top ~1% is to simply bring their wealth more in line with their contributions, and to reduce their outsized power on the political system. Jeff Bezos isn't "worth" a million times more than his warehouse workers, and he shouldn't have that kind of money either as a matter of principle, or as a matter of democratic power. It's not a matter of punishment, but a matter of ensuring…

> reduce their outsized power on the political system

Why do you want to take away decision-making power from people who know how to make [a lot of] money?

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

#532

Post by kyrra » Sat, Dec 19, 2020, 7:34 PM UTC

frogblast wrote: post #190

This is fearmongering. The bill was introduced a year ago, went nowhere, and is now dead. This WSJ article was published a month after the bill was officially killed… The broader legislature has no interest in such a tax. This is the bill in question: http://leginfo.legislature.ca.gov/faces/billStatusClient.xht... Edit: also note that this article is on the WSJ opinion page, and didn’t come from the news desk.

When many policies that start in California get adopted by much of the Democratic party, even the ideas being proposed show that it is the direction at least some subset of the party wants to go down. When WSJ opinion section is covering pieces like this, it's to point out the ideas that the Democrats are floating. While it may not have passed this time, it's setting the foundation for future debate on the topic.

If you want a news side of it, here's the WSJ news talking about it during the primaries when many of the candidates were discussing it: https://www.wsj.com/articles/democrats-emerging-tax-idea-loo...

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

#533

Post by chipotle_coyote » Sat, Dec 19, 2020, 7:39 PM UTC

xhkkffbf wrote: post #453

chipotle_coyote wrote: post #443

Earlier quoted context omitted.

While I'm dubious about both the legality and wisdom of this proposed tax, I confess I'm having trouble seeing "paying a 0.4% tax on wealth over $30M" as being "slave to a state." Yes, metaphor, but it's a metaphor of "reducing my $50M estate to $49.92M might as well be forced servitude," and, uh, no. C'mon. Put that $50M somewhere that averages even a modest 4% annual return and you could pay the tax, draw out $600K…

$50m * 0.004 = $200,000. You might be interested in this nice lottery the state also offers. Some call it a tax for those who are bad at math.

It is a tax on money after the first $30M, so that is

$20M * 0.004 = $80,000

Which does actually mean my numbers are off, in that I accidentally calculated the guy with $50M in wealth having to pay $800K in wealth tax, and he actually only has to pay $80K. So, thank you for pointing out that this proposed tax was even more trivial for anyone that it would have affected than I'd originally thought.

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

#534

Post by 1123581321 » Sat, Dec 19, 2020, 7:39 PM UTC

raydev wrote: post #515

1123581321 wrote: post #458

Earlier quoted context omitted.

If it’s so small as to not be meaningful, why collect it? How could it benefit the state to have so little money? If the state professes a genuine need for such a small marginal increase in its revenue, then shouldn’t the individuals being taxed be able to make a similar case? This is like the conversation over signing NDAs, where one party pressures the other by saying it doesn’t matter...

> If it’s so small as to not be meaningful, why collect it You're mixing up to whom it's meaningful. Rich individuals will be unaffected, but it will benefit the state as the tax is collected from more than one person.

I understand that. In aggregate, it’s not a large additional amount for the state of California. How is it meaningful outside of CA insisting they would like to have it?

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

#535

Post by Pfhreak » Sat, Dec 19, 2020, 7:40 PM UTC

syshum wrote: post #512

Pfhreak wrote: post #351

Earlier quoted context omitted.

I can. I do give to charities. But me giving had a much, much smaller impact than me pushing for everyone to give. It's not just about their fair share. Income inequality is a feedback loop that has a predictable and quite unpleasant outcome. I'd much rather introduce mechanisms to slow that feedback loop down. The parent poster argued that "don't the wealthy know they'll get taxed more?" I'd propose that "don't the…

>> much smaller impact than me pushing for everyone to give. The problem here is the fact you are not pushing for everyone to "give", giving is a voluntary act, taxation is compulsory done under the explicit threat of violence. It is not an act of "giving" it is an act of taking. >"don't the bottom 95% know they'll experience a steady decline of income and purchasing power if we don't tax the wealthy more?" History d…

> History does not show this to be the case at all, The World is becoming a better place for everyone [1]

Driven predominantly by growth, which will taper off. We are an unusually explosive period of growth at the moment, and it's already starting to recede. Growth is fueled in many cases by population expansion which has almost completely stalled in many places.

For an introductory read on the topic, I recommend Thomas Piketty's Capital in the 21st Century.

> The problem here is the fact you are not pushing for everyone to "give", giving is a voluntary act, taxation is compulsory done under the explicit threat of violence. It is not an act of "giving" it is an act of taking.

I believe that the taxes you pay were never your money to begin with. I'm not giving the government my money, the government is ensuring that society has what it needs to care for everyone. The mechanism that it uses to do this needs to tap into either wealth or streams of finances, but neither is theft or taking from what I see. An analogy, salmon ladders in dams allow an important resource to flourish and don't generate power. You might call that 'theft' or 'taking' power from the dam. I see it as 'never the dams to begin with'. (In case it's not clear, the water is money, you are the dam. Are you entitled to all the water that flows to you? You say yes, I say no, we disagree but I don't think there's an objectively correct answer.)

Counter to the opinion that taxes are theft, I believe that austerity is theft. We can agree to disagree here if you'd like.

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

#536

Post by accountLost » Sat, Dec 19, 2020, 7:41 PM UTC

scrollaway wrote: post #457

xhkkffbf wrote: post #453

Earlier quoted context omitted.

$50m * 0.004 = $200,000. You might be interested in this nice lottery the state also offers. Some call it a tax for those who are bad at math.

20m * 0.004 = 80k. GP isn't bad at math, you just fail to understand how these types of taxes work.

Took me a few minutes to figure it out. chipotle_coyote comment make sens if the tax is 800k. 50m*0.04 = 2m = 800k+600k+600k The tax is not 800k but 80k though. So it should be 80k+960k+960k.

So you could pay the tax, draw out $960K a year (I mean, you can live on that, right? Not a hardship?), and still have another $960K left over.

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

#537

Post by 1123581321 » Sat, Dec 19, 2020, 7:43 PM UTC

staticassertion wrote: post #516

1123581321 wrote: post #458

Earlier quoted context omitted.

If it’s so small as to not be meaningful, why collect it? How could it benefit the state to have so little money? If the state professes a genuine need for such a small marginal increase in its revenue, then shouldn’t the individuals being taxed be able to make a similar case? This is like the conversation over signing NDAs, where one party pressures the other by saying it doesn’t matter...

> If it’s so small as to not be meaningful, why collect it? Well they aren't collecting it from just one person, so the number's really big on one side (in aggregate) and it's really small on the other side.

I understand that. In aggregate, it’s not a large additional amount for the state of California. (Most of CA’s income is aggregated from many sources.) How is it meaningful outside of CA insisting they would like to have it, in a way that precludes the taxed entity from claiming they have a meaningful use for it?

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

#538

Post by chaostheory » Sat, Dec 19, 2020, 7:43 PM UTC

atomi wrote: post #340

ip26 wrote: post #327

Earlier quoted context omitted.

The interesting part is the next question you have to ask yourself- could Elon have built what he did somewhere else?

Honestly, I fantasize about a California with population levels pre-Gold-Rush, pre-Dust-Bowl and pre-Silicon-Valley.

Why not just move to a place like Idaho or Wyoming instead? You can have it right now instead of dreaming about it.

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

#539

Post by Natales » Sat, Dec 19, 2020, 7:44 PM UTC

secabeen wrote: post #273

nthj wrote: post #199

Earlier quoted context omitted.

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...

Property taxes in CA punish the newcomers and reward old money. When I bought in Mill Valley in 2001, I was literally paying 13X more taxes than my neighbor, a masseuse who inherited the property and kept the same tax rate her parents paid in the 70s. And as a very liberal town, every new tax initiative always passed, which again hit us harder.

If at least Prop 13 benefits could not be passed as inheritance, that would go a long way to balance things.

I'm happy I moved to WA now where my property taxes do get reassessed every year, but it balances out with no state income taxes.

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

#540

Post by sdenton4 » Sat, Dec 19, 2020, 7:46 PM UTC

da_big_ghey wrote: post #202

sdenton4 wrote: post #126

Earlier quoted context omitted.

/Personally I disagree with the whole idea of wealth taxes, you should be taxed when you do things, not taxed just because you own something worth money./ I figure if we allow passive income, we should allow passive taxes...

Capital gains taxes are already a thing. You just pay on liquidation instead of having to come up with cash every year.

First, let's recognize that this is a completely made-up criteria for when to apply the tax, then: there's no "natural" ethical principle for why it's ok to tax at liquidation vs tax continuously.

The question, then, is whether one method is actually better than another under some set of criteria. The original comment's 'I don't feel like it' is insufficient in my mind.

The reality of the current system is that we have absolutely enormous wealth bubbles hidden away basically forever. Once you're a billionaire, there's no REAL need to liquidate things on a regular basis. You'll tend to store the vast majority of that wealth in things that appreciate (because you have the choice, and no one needs that many cars, even you), so the bubble grows continuously. Then conversions will mostly happen at carefully judged points in time+method to minimize tax owed. A wealth tax puts some small check on the runaway growth of assets, and provides a more steady+predictable income stream for governments.

Finally, I would like to reinforce that the 'you' used in all of these comments almost certainly include only "temporarily embarrassed" billionaires. Common sense household economics have near-zero relevance for thinking about wealth on the scales we should be concerned with here. Actual billionaires should have no trouble coming up with cash for a wealth tax: beyond some point, the wealth is a mostly undifferentiated mass of assets. If 'you' can project what 'you' owe for the tax, 'you' know how much you need to liquidate to pay it.