Live data from Hacker News

Tesla’s headquarters will move to Austin

kxan.com

661–670 of 691 posts

Re: Tesla’s headquarters will move to Austin

#661

Earlier quoted context omitted.

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.

Wouldnt the interest on the loan be greater than the taxable event? Even with interest rates low, the prime rate is 3.25 [0]. So isn’t it worse to pay 3% interest per year than a 15-25% capital gain once? I assume Musk thinks he’ll live more than 10 years. [0] https://www.bankrate.com/rates/interest-rates/wall-street-pr...

Interest payments are deductible. [0] The scheme was described by ProPublica earlier this year. [1] If they sell stock they lose the control over the firm that stock represents. That would be fine for normal humans, but not for the super control freaks under discussion. The interest, which is certainly lower than "prime" for borrowers like this in the era of zero-benchmark [2], is typically paid by future loans. It doesn't hamper the lifestyles of the rich any more than it benefits the public treasury.

[0] https://www.irs.gov/taxtopics/tc505

[1] https://www.propublica.org/article/the-secret-irs-files-trov...

[2] https://www.federalreserve.gov/releases/h15/

Re: Tesla’s headquarters will move to Austin

#662

Earlier quoted context omitted.

Which ones specifically? The only two I know of are: - The low/zero emission car rebate that Toyota and every other manufacturer has used. - The clean energy manufacturing tax write off that applies to over a hundred other companies. I don't think California has given Elon any significant subsidies. When Tesla asked states to compete on the Gigafactory, California lost to Nevada.

lol are you serious? Google "tesla ZEV credits". and CAEATFA has landed it over $225MM worth in write offs.

Write offs isn't the right word here. It's a partial tax offset for purchasing manufacturing equipment. The tax itself is already high, so the partial exemptions on that tax isn't some give away.

Re: Tesla’s headquarters will move to Austin

#663
post #632

Earlier quoted context omitted.

I simply don’t believe SFChronicle here. I live in Texas and I see plenty of California plates on the road. The realtor I work with says Californians are flooding the market with cash. They’re offering 10’s of thousands of dollars over asking price and winning out over local offers.

The data is from the USPS. Sorry if it doesn't match some anecdotes

Not matching the anecdotes leads me to believe the analysis is probably lacking something.

“The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right.” -Jeff Bezos

Being data driven is not necessarily a bad thing, but the design of the study, the kinds of data collected, and all the other factors that go into how the data is measured need to be considered too.

This article about there being no “Californian Exodus” just doesn’t seem true, much in the same way I discount all those reports that say something along the line of “No, crime is actually down in the Bay Area”. Despite people living there saying it’s gotten way worse. The answer probably lies in changing what gets counted as “a crime”, coupled with police not responding to things they used to report, and citizens feeling like it is futile to call the police. But the data would paint the picture that crime is objectively down. But when you apply some other analysis you can see the conclusion is flawed.

Re: Tesla’s headquarters will move to Austin

#664
post #2

Yet, Tesla will still have to ship Texas cars out of state to sell to Texans.

Symbolic move with some logistic practicality with Boca Chica and his 400 sq ft tiny house [1] being home base at Starbase. All signs point to Tesla continuing manufacturing at Fremont and they just opened a Megapack manufacturing facility in Lathrop, CA (hiring 1k-2k workers) [2]. The irony that "pro business, less regulation" Texas doesn't allow direct to consumer sales of Teslas. [1] https://www.architecturaldiges…

Your source is incorrect, Musk has denied living in a prefab house. He lives in one of the small houses in Boca Chica village.

Re: Tesla’s headquarters will move to Austin

#665

Earlier quoted context omitted.

> Those moving into the inherited home as their primary residence are not affected. Not true. Only $1m of assessed value is excluded for heirs moving into an inherited property as a primary residence. Inheriting property worth more than $1m is not a bad problem to have, but in places like Los Angeles it means that a lot of people not be able to afford to live in the property and will be faced with either fixing it up…

Thanks for the correction -- you're right. It doesn't really change my point though – I still don't see why a $2M+ property deserves to get transferred tax free. A $2M property would still only pay a little over $10,000/year in property taxes after the $1M exemption (which you can deduct against federal taxes, even with the SALT cap, which itself will likely repealed!). A pretty nice discount for an heir compared to…

Prop 19's targeting inheritance exemptions will have uneven effects. The very wealthy won't be affected at all because, on the advice of their estate planners, they will have transferred their properties into corporate entities long ago. (Recall that properties owned by corporations aren't reassessed when stock ownership changes and Prop 19 didn't change that.) Heirs to properties worth less than $1m who intend to use the property as a primary residence are also unaffected.

There is, however, a large group of ordinary middle-class people, particularly in cities like Los Angeles or San Francisco, who own what were once modest homes that are now worth more than $1m.[0] Their heirs will be burdened when the property tax bills double (or more) in one year, even if the heirs use the property as their primary residence. More heirs will sell inherited properties, which is exactly what the real estate brokers who promoted Prop 19 intended. $1m+ is also a sweet spot for broker profitability.

The intent of Prop 13 was to stabilize property taxes after the double-digit hyperinflation of the 1970s by capping annual increases in assessed value at 2%. That created stability for individuals and businesses that led to massive investment in and migration to California.

Prop 19 undoes that stability, but only for a narrow group of people: heirs to $1m+ properties from parents who did not have sophisticated estate planners. From Wikipedia:

    The Case–Shiller housing index shows prices in Los Angeles, San Diego, and San Francisco appreciated 170% from 1987 (the start of available data) to 2012 while the 2% cap only allowed a 67% increase in taxes on homes that were not sold during this 26-year period.
[1][2]. On average, heirs to $1m+ homes in those markets will be hit with roughly a 103% increase in one year (170%-67%). So, Prop 19 hits a narrow group of people with a 100%+ tax increase when Prop 13 was supposed to limit increases to 2%. A compromise rule could have been to spread out the increase over the course of a few years, but that wouldn't induce more sales like the brokers' lobbying group wanted.

Personally, I think it would be fair to increase the annual cap from 2% to 4%. In a decade or so, that would undo much of the tax discrepancies caused by Prop 13. And the effects would be spread out, so people could plan for it. Increasing the cap, however, would never pass because it is clearly a tax increase on everyone and doesn't benefit a special interest like real estate brokers.

[0] The median home price in Los Angeles is now over $900k. https://www.zillow.com/los-angeles-ca/home-values/

[1] https://en.wikipedia.org/wiki/1978_California_Proposition_13...

[2] https://web.archive.org/web/20191011004252/https://us.spindi...

Re: Tesla’s headquarters will move to Austin

#666

Earlier quoted context omitted.

Bay Area homes are like that too. I implore you to check some Zillow in Mountain View and compare. Not in the same ballpark even.

You're comparing Mountain View, a town of 80,000 people and 12 square miles, to ALL of Austin, with 270 square miles and nearly a million people. There are incredibly expensive parts of Austin. There are cheaper places in Austin. The areas where upper-middle class Bay Area tech workers would want to love are not in the cheaper areas.

Mountain View is just an example, and not an extreme one like Atherton or Palo Alto. Even if you go as far as say Pleasanton the market is still in another league compared to Austin.

Re: Tesla’s headquarters will move to Austin

#667

Earlier quoted context omitted.

Yes, your landlord can rent out for a loss when the house is gaining double digit percentages per year, assuming they’re well capitalized[0]. But let’s be honest, how long can houses gain 10% per year? And how often do you really think landlords rent at a loss in such hot real estate markets? Under less insane circumstances, a land lord who is charging less for rent than the house costs to own is going broke. As a ge…

10% per year is not the threshold, as long as the cap gains are more than expenses it's profitable to lease at any amount >= 0. Before I moved to Austin I used to live in a ~1.5M house in Los Angeles, paying ~2K rent for 10 years or so. It's not relevant to the current discussion though. Right now rents are lower than mortgages in general so the assertion that the tenant pays all landlord's expenses is demonstrably f…

I think you’re making a lot of implicit assumptions here. For example, in this discussion there is no guarantee that the average current mortgage is the same as the mortgage held by the current landlord charging the prevailing rent. In my experience it’s pretty typical for rented houses to not be recently purchased.

If you have evidence that it’s the norm for landlords to rent below their operating costs, by all means provide it. But from what you’ve provided so far, I am unconvinced.

Re: Tesla’s headquarters will move to Austin

#668

Earlier quoted context omitted.

10% per year is not the threshold, as long as the cap gains are more than expenses it's profitable to lease at any amount >= 0. Before I moved to Austin I used to live in a ~1.5M house in Los Angeles, paying ~2K rent for 10 years or so. It's not relevant to the current discussion though. Right now rents are lower than mortgages in general so the assertion that the tenant pays all landlord's expenses is demonstrably f…

I think you’re making a lot of implicit assumptions here. For example, in this discussion there is no guarantee that the average current mortgage is the same as the mortgage held by the current landlord charging the prevailing rent. In my experience it’s pretty typical for rented houses to not be recently purchased. If you have evidence that it’s the norm for landlords to rent below their operating costs, by all mean…

I gave you an example of my house, have not I? If I were interested in renting it I would not be "underwater" and any non-negative rent would be better for me than selling/renovating/keeping it off market. Note that I am not making a statement about every house, to rebut your assertion that all renters pay no less than the landlord's taxes + mortgage + insurance it's enough to show some (even one) counter example and not to prove that all or, even, typical renter does not do so. There are certainly rental properties that make profit on rent but I have few friends who rent their houses at less than their own expenses because they just cannot find tenants willing to pay more.

Seeing how in general rents had been lower than mortgage for quite a while it's sane to assume that I am not an owner of a unique house with a selected group of friends who are in this completely extreme situation.

Re: Tesla’s headquarters will move to Austin

#669
post #570

Earlier quoted context omitted.

The US has around 700 billionaires. That is comparable in size to the US House of Representatives. There are a lot more politicians than billionaires. Plus there is a lot more turnover in politicians than billionaires. It doesn't tell you anything that only 1 of them went to jail. Even assuming they are incarcerated at something close to the background rate (an unreasonable assumption) we would expect 0% of them to b…

Why only look at billionaires and exclude multimillionaires?

1) Because the comment said "billionaire"

2) "Wealthy person goes to jail" isn't actually all that newsworthy. Politicians are always going to get more news headlines because, ironically, or politics.

Re: Tesla’s headquarters will move to Austin

#670
post #570

Earlier quoted context omitted.

The US has around 700 billionaires. That is comparable in size to the US House of Representatives. There are a lot more politicians than billionaires. Plus there is a lot more turnover in politicians than billionaires. It doesn't tell you anything that only 1 of them went to jail. Even assuming they are incarcerated at something close to the background rate (an unreasonable assumption) we would expect 0% of them to b…

> Adjust that for the fact that they have basically no rational reason whatsoever to commit crimes They may have no rational reason to fear prosecution, but they commit crimes all the time. Becoming untouchably wealthy does not remove base desires from anyone, it only shields them from accountability. "The uber-rich also shield their wealth through elaborate purchases of real estate, yachts, jets and life insurance.…

They are billionaires. They can probably just buy what they want, even for some of the more out-there base desires. Why risk jail time?

You seem to be going to tax minimisation - sure, the billionaires have a massive advantage when they engage with the law relative to you or I - but there is no reason they should go to jail for that. The basic assumption is if you have multiple accountants doing your tax return then the tax return should be legally proper. It got a lot of attention.

Post reply on HN