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Tesla’s headquarters will move to Austin

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Re: Tesla’s headquarters will move to Austin

#531

Post by kelnos »

guardiangod wrote: post #74
danhak wrote: post #34

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…

>High earners pay an effective tax rate of > 50%. Musk has not paid any tax because he hasn't cashed out any of his stock options yet. Some of his options will expire next year so he will pay tax then, but I am sure California will get the lion share of the tax revenue (as Musk lived in California up to 2021.)

Musk isn't eligible for ISOs, so any options he gets are taxed in the year they are exercised. Sure, he can avoid exercising them, but options nearly always have an expiration date. And assuming the stock price has gone up since the options were granted, the taxable amount will be even higher upon exercise.

CA also has some fairly unique (and IMO unfortunate) tax rules where they will still require you to pay taxes on some things even after you've moved out of state. I believe option exercise (for options granted+vested while living in CA) is one of those.

Re: Tesla’s headquarters will move to Austin

#532

Post by iab »

tayo42 wrote: post #505
kelnos wrote: post #447

Earlier quoted context omitted.

> I miss is the arts, culture, and nightlife, but that was wiped out by government-enacted COVID restrictions so there are few redeeming reasons to stay. Isn't that the case pretty much everywhere, though? These things will come back in CA just as they will everywhere else, barring catastrophic economic collapse.

Its not even true, last weekend I went to a watercolor painting show featuring international artists. Been going out for dinner (not much of a drinker), the late night "downtown" area in my town is fully open. Tourists were back during summer. Activities are all back to normal. Concerts are going on, I went to one a couple weeks ago. There is one I really want to go to in the bay area too :( but no time. Just clueles…

Every time I hear someone rail against California, I think of that scene in Mad Men when Don Draper tells Michael Ginsberg: "I don't think about you at all"

Re: Tesla’s headquarters will move to Austin

#533

Post by Matthias247 »

ijidak wrote: post #301
gonehome wrote: post #288

Earlier quoted context omitted.

It's not even close - a crappy house on the peninsula is 1.7M, with the median closer to 2.5-3M. I mean, look at this: https://www.redfin.com/CA/Palo-Alto/3785-Park-Blvd-94306/hom... I think Austin is better about building too, meanwhile in the Bay Area they just rejected units desperately needed in the tenderloin because they might become a "tech dorm".

> https://www.redfin.com/CA/Palo-Alto/3785-Park-Blvd-94306/hom... Wow. That is unreal. Yeah, no region in almost any region of America comes close to Bay Area prices.

Vancouver BC might be in the same range now, where things like this show up for 2M CAD. And the conversion rate won't make up for the differences in salaries

Re: Tesla’s headquarters will move to Austin

#534

Post by mullingitover »

rcpt wrote: post #451
mullingitover wrote: post #405

Earlier quoted context omitted.

As a renter, you're paying 100% of your landlord's property taxes.

No you're paying rent. The idea that property tax is passed down to renters 1:1 is just something you made up. The concept you need to look into is called tax incidence: https://www.maxwell.syr.edu/uploadedFiles/cpr/efap/Notes%20o...

I don't think I made up the idea that landlords generally don't lose money renting their property. Higher taxes might reduce their profits in a competitive market, but renters are still paying the property tax for the landlord. Tax incidence theory also leans pretty heavily on the assumption that there's healthy competition in the rental market. In most major cities that's a very unsafe assumption.

Re: Tesla’s headquarters will move to Austin

#535

Post by Robotbeat »

etchalon wrote: post #141
Apocryphon wrote: post #56

The official reason is because of housing: "To be clear we will be continuing to expand our activities in California," Musk said. "Our intention is to increase output from Fremont and Giga Nevada by 50%. If you go to our Fremont factory it's jammed." But, he added, "It's tough for people to afford houses, and people have to come in from far away....There's a limit to how big you can scale in the Bay Area." https://ww…

As someone who just bought a house in Austin this year, if the reason is "affordable housing", they're in for a world of hurt.

The average annual housing cost in Fremont is $2470/m. In Austin, it’s $1619. That’s like giving every employee a $10k/year raise (well, better as it’s after tax).

Re: Tesla’s headquarters will move to Austin

#536

Post by kelnos »

lamroger wrote: post #64
CheezeIt wrote: post #37

Earlier quoted context omitted.

The public schools aren’t pitiful at all. California has great schools.

if you can afford living close to one or pay for private schooling

Hell, in SF that first bit doesn't even help, due to the broken lottery system here. It's probably the main reason why there are so few children (by percent) in SF when compared to other cities. Parents make the logical decision to move out of SF when their kids become school-age because they have near-zero control over the school their kids end up at. Alternatively, they put their kids in private school, which is out of reach cost-wise for many families.

Re: Tesla’s headquarters will move to Austin

#537

Post by t-writescode »

seanmcdirmid wrote: post #530
UnpossibleJim wrote: post #524

Earlier quoted context omitted.

Seattle's public transportation is poorly connected and confused at best. Mismanaged and terrible at worst. It seems like a ponzi scheme masquerading as a public transportation system, at times. There's a demand for it, which is the sad truth of the situation.

Seattle could be better connected, but it isn’t that bad. If you are going downtown, you can get something, even something lateral Ballard to Bellevue requires just one connection.

As long as Seattle is your source or destination, Seattle's transit is pretty okay.

If you dare go Eastside; or, worse, need to go from like Renton to Totem Lake; or Redmond to somewhere that isn't the the center of Bellevue, you're just never going to get there in a reasonable amount of time.

Re: Tesla’s headquarters will move to Austin

#538

Post by Robotbeat »

conductr wrote: post #436
pvarangot wrote: post #158

Earlier quoted context omitted.

I talked to several Tesla and former Tesla folks that will probably relocate because of this, and the say is that since Austin in less NIMBY than the Bay Area new housing will get built and prices will go down. It's a more complex bet than just "we move there because houses are affordable now".

Prices will only go down in Texas when people quit moving here because they think the RE is cheap. Construction never stops here and prices still go up.

Prices would go up a lot faster without more construction.

Re: Tesla’s headquarters will move to Austin

#539

Post by AmericanChopper »

jessaustin wrote: post #517
AmericanChopper wrote: post #298

Earlier quoted context omitted.

I really don’t think this is true. Being granted the stock is a taxable event, even if you don’t liquidate any of it, and even if that means you have to sell some to pay the taxes. Also, the methodology you’ve described for avoiding taxes is used to benefit from offshore holdings, not avoid paying taxes on locally held assets.

This scheme finances the personal spending of every American worth more than $50M. Sure, any time they're sloppy enough to personally receive real income, they pay taxes on it. Usually they are not that sloppy. The income goes to shells or other assets in which they've "invested". The assets become more valuable, and thus can be used as collateral for larger loans.

I’ve worked with organisations that trade SLOCs other types of instruments that are typically used for these types of transactions. They can be used to defer taxable events in some cases (by taking a loan today instead of selling your shares/options), but there’s no way to use them to avoid paying taxes on local assets. This is especially true with Musk, because he’ll have to sell expiring options soon, which will be a taxable event no matter what.

The only way they can be used to avoid paying taxes all together is if you’re trying to derive income from assets held (usually secretly) offshore, and this is almost always criminal tax evasion. The only thing they’re achieving in this circumstance is basically an international fund transfer without creating any taxable income. There are no secret tricks you can do to transfer your assets beyond the control of the IRS, you can’t “give” them to a bank, and if they’re collected as collateral on a defaulted loan, that’s a taxable event too.

Companies can get away with moving their profits to other jurisdictions, because a collection of subsidiary companies can exist in as many different tax jurisdictions as you want. Individuals can’t (legally) do this, especially not US citizens, because they remain US tax residents for their entire lives, regardless of where they live or work.

A lot of billionaires don’t pay a lot of taxes every year, because they don’t have a lot of income every year. The only way to turn it into a scandal is if you ignore all the years in which they do pay a lot of taxes. Which is, of course, fundamentally stupid.

Re: Tesla’s headquarters will move to Austin

#540

Post by handmodel »

pvarangot wrote: post #279
handmodel wrote: post #254

Earlier quoted context omitted.

It may be as NIMBY in some ways but the effects haven't kicked in yet (and probably won't given size, competition, and property tax laws). Look at the options available for a family making 80k in these two cities. They aren't even the same magnitude. https://www.trulia.com/TX/Austin/ https://www.trulia.com/CA/Palo_Alto/ Texas also doesnt have prop 13 so it is unlikely to ever reach the levels of a California city

That comparison is ridiculous, have you been to Palo Alto? It's a mansion neighborhood like Atherton. A better comparison would be with San Jose or San Mateo that are like, normal cities. Still way more expensive than Austin but it's nowhere near the price of Palo Alto or Atherton.

https://www.trulia.com/for_sale/San_Mateo,CA/

I think that's fair but the nonetheless the only houses on here in San Mateo for under 600k are about 600sq ft. Even 1200sqft homes are 1M+ Where do you think married mid-level engineers are going to live?

For 500k in Austin you can choose between brand new 1300 sqft homes or older 2500 sqft homes.

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