@vivify saidhe is not doing he krunk voice, so you know this is nut a fun subject. he pretty much touched everythin i would have said about the laughable subject of billionaires leaving.
https://www.foxbusiness.com/economy/california-entrepreneur-warns-billionaire-wealth-tax-could-trigger-giant-sucking-sound-business-exits
Billionaires have threatened to leave California if they enact the "billionaire wealth tax".
The commenter below makes a great point about such threats:
https://www.youtube.com/shorts/1f5iMFWTI88
His point: billionaires stifle ...[text shortened]... pop up and flourish.
I rarely post content from internet commentators but I recommend this one.
As we well know, billionaires are selfless pure souls who sacrifice greatly living in New York or LA. It's not that they are the best cities for the rich, they could spend their money just as well in Jacksonville or attend the shows in Boise or the wild parties in Des Moines .
@wildgrass saidThey can invest in the S&P regardless of where they live.
I don't think so. Some of these Silicon Valley guys have made $50 billion and they're only 23 years old. You couldn't pay them $500 million to move anywhere else.
The average stock market ROI in the last 5 years is 13.5%. Maybe we round down to 10% to account for inflation. You're saying that someone with $10 billion invested will move away from California because their ...[text shortened]... nue investing tax dollars in innovation, R&D and education to fuel those very lucrative enterprises.
I'll concede that there are probably some people who are so desperate to stay on Nob Hill that they'll cough up a truckload of their dough to stay there, but I strongly doubt that's a very high percentage.
I also have to see how this is going to be collected. Forcing huge corporate shareholders to liquidate 5% of their stock in 5 years could cause major valuation problems. Plus, what happens if their stock value plumments? I assume there are some safety valves in place, but it sounds extremely messy to me.
And please stop calling it a 1% wealth tax. It's a 5% wealth tax.
I will say, though, that while I'm skeptical, I am intruiged by the concept. Though I'm a free market capitalist who vehemently opposes wealth redistribution for its own sake (which I think is not only unwise, but immoral), I'm also in favor of strong social safety nets and higher taxes than we have right now (I hate big budget deficits).
If this goes through, it will be an interesting low-risk experiment. If it works, it may show it's workable on a national level. If it's a bust and the rich people flee the state or the companies get hurt, we'll see that too.
One of the nice things about federalism is that states get to be incubators to try new social experiments, and the country can get a glimpse of how something works and then decide whether to try it on a national level.
I don't mind watching from the sidelines, as I don't think, even if it is a bust, it wll crash the stock market. Works comes to worst, it will be an embarassing failure that will weaken the Democratic party in California. If it works, then it will be an interesting data point for nationwide policy debates.
Either way, I'll be watching.
@sh76 saidit doesn't have to be a mom and pop data center. it could be any number of business of any type and that datacenter not sukin up energy like a vampire could lead to cheaper costs for everyone else. Real estate could become more affortable.
Billionaires rarely run businesses that are geographically limited. You don't become a billionaire by opening a Bunch of Bay Area yogurt shops. You become a billionaire by founding a Google or Apple or Microsoft or Facebook.
Billionaires leaving San Francisco are not suddenly going to open the door for Mom and Pop search engines or AI companies. They're simply going to reloca ...[text shortened]... lorida.
But hey, if California wants to conduct the experiment, go ahead. Let's see what happens.
This is the trouble with complex issues being reduced to republican talking points. Kinda ignores the complex parts and the repercussions that aren't limited to a simple cause-effect.
@kmax87 saidI'm in favor of higher income tax rates across the board, especially at the top end. I've said that at least 100 times over my 2 decades on this board. It's always amusing to me that as soon as people see that you generally take a position on one side or the other of the political spectrum, that you must adopt all of their opinions, hook, line, and sinker. My positions are not limited to one political side or the other.
Last time I looked, 500 mill of a 10B fortune is 5%.
But you would prefer only lower income people paying more of a percentage. And you wonder why infrastructure and services are falling apart in many places across your wide vast land??
And the proposed wealth tax is 5%, not 1%.
https://nymag.com/intelligencer/article/californias-landmark-wealth-tax-may-be-running-out-of-steam.html
@kmax87 saidI certainly do have an answer, little feller. For example, The Constitution says naught about post office nor Amtrak.
As always a strawman. And we get it, you dont have an answer.
So govt gets out of those ‘businesses “.
So, follow me, one of Musk’s lieutenants takes over running the post office and Amtrak , like businesses. (I know, you still don’t get it&hellip😉
That’s it. I hope my lengthy explanation did not leave you dumbfounded and confused . Clueless.
- Joined
- 20 Oct 06
- Moves
- 11051
@sh76 saidPeople move because of family, location, a better job opportunity, a new endeavor. They don't move because of marginal tax rates.
They can invest in the S&P regardless of where they live.
I'll concede that there are probably some people who are so desperate to stay on Nob Hill that they'll cough up a truckload of their dough to stay there, but I strongly doubt that's a very high percentage.
I also have to see how this is going to be collected. Forcing huge corporate shareholders to liquidate 5% of th ...[text shortened]... it will be an interesting data point for nationwide policy debates.
Either way, I'll be watching.
There are 250-ish billionaires in California. I'll guess if the wealth tax is enacted maybe 10 of them will leave because of this. They'll make a huge stink of if of course. Over the same time frame, Califonia's economy will create more billionaires to replace them.
The argument made by billionaires is "you're going to miss us when we're gone" because they are job creators and innovators and spenders. But the investor you are describing who can invest from where ever they live does not fit this bill. This investor is living in California because they want to live there. They're already paying higher taxes than they would in other states, so why didn't they move out 20 years ago? They'd be richer. Do you really think they're moving to Iowa after building a life in California because they'll net slightly more on their ongoing investments?
Nah. The ones who move will do so for other reasons. Retirement in the sun belt, grand kids, weather, travel etc. Not taxes. The consequences of an extremely wealthy person moving somewhere they don't want to move far outweighs the small amount less investment earnings they bring in.
Bigger picture, it's long past time that assets other than property are taxed. Wealth accumulation is real and adds unneeded fragility to capitalist systems. Investment income is already taxed way, way lower than income that comes from work, and that's backwards. Someone has to pay for the legislative agenda, and I'd rather have it be wealth than labor.
@wildgrass said$500 million is a ton of money, and while we may sit here and think "they don't need money - they have so much already" people don't generally become billionaires by thinking like that.
People move because of family, location, a better job opportunity, a new endeavor. They don't move because of marginal tax rates.
There are 250-ish billionaires in California. I'll guess if the wealth tax is enacted maybe 10 of them will leave because of this. They'll make a huge stink of if of course. Over the same time frame, Califonia's economy will create more billio ...[text shortened]... ckwards. Someone has to pay for the legislative agenda, and I'd rather have it be wealth than labor.
And they don't have to go to Iowa. They can go to Dallas or Miami or even Portland or Seattle or New York.
I still don't understand how a wealth tax is supposed to work when almost all billionaires' primary assets are unsold corproate stock. Higher income taxation (and closing some loopholes) on high incomes seems like a better way to generate revenue than taxing the possession of unrealized gain.
1 edit
Somebody once asked Carlos Slim Helu how he felt at becoming the world’s richest person. He shrugged and said something like “The numbers go up and down all the time. It doesn’t really mean anything. Richest, second richest, who knows? These lists are pointless”
It’s well known that the subjective value of a dollar decreases as a person becomes richer. You get rich enough and the only reason to fight for money is prestige, stubbornness, irrational greed and so you can live where you want.
They want to live in CA.
On Boardwalk Empire Meyer Lansky tells Lucky Luciano they should leave NY because of some business dispute, that they could live anywhere with their money and Lucky says “I already live where I want - a luxury penthouse in Manhattan”
@sh76 saidThey can arrange to make a payment plan. It might take 50 years…
$500 million is a ton of money, and while we may sit here and think "they don't need money - they have so much already" people don't generally become billionaires by thinking like that.
And they don't have to go to Iowa. They can go to Dallas or Miami or even Portland or Seattle or New York.
I still don't understand how a wealth tax is supposed to work when almost all bill ...[text shortened]... h incomes seems like a better way to generate revenue than taxing the possession of unrealized gain.
- Joined
- 20 Oct 06
- Moves
- 11051
1 edit
@sh76 saidWell I don't really buy the "billionaires don't have money to pay taxes because its invested" line.
$500 million is a ton of money, and while we may sit here and think "they don't need money - they have so much already" people don't generally become billionaires by thinking like that.
And they don't have to go to Iowa. They can go to Dallas or Miami or even Portland or Seattle or New York.
I still don't understand how a wealth tax is supposed to work when almost all bill ...[text shortened]... h incomes seems like a better way to generate revenue than taxing the possession of unrealized gain.
Your property doesn't make money, but you have to pay non-actualized gains every single year on it. Just do the same with wealth. A wealth tax should be less of a burden than property tax because the wealth is making 10% year over year. With wealth taxes, the rich still get richer every year, just a little less rich less quickly than they do now (I'd favor 1% wealth tax per year, on par with property). And they'd actually be contributing, rather than mooching on the people who have to work to make a living.
The dollar numbers get silly, as you mentioned a $500 million tax bill. The reason for this is because they don't other wise pay ANY taxes. That's the insane part. Instead of paying taxes, they spend a lot of money bribing politicians to keep their sweet heart arrangement with the government. They have the money.
- Joined
- 20 Oct 06
- Moves
- 11051
1 edit
@Mott-The-Hoople saidThere was a time not so long ago when conservatives who could think with more than two brain cells supported wealth taxes. Billionaires have been coddled long enough. Y'all Trumpers want to take food stamps away from the poor so the rich don't have to pay taxes.
Why would anyone want to start a business and create jobs when the govt will take a large portion of your money?
When all you have to do is create a business in another state.
Oh…that’s what they are doing.
You people are easily fooled by propaganda.
The basic problem is that defining "income" becomes progressively more difficult as income and wealth rise. Straight wage income is relatively easy to define and tax for middle-income earners—through payroll taxes for Social Security or through the personal income tax. But wealthy people live much more off returns from their asset holdings. They receive capital gains, stock options, interest and dividends; and carried interest for owners of hedge funds that, to avoid double taxation, are taxed at lower rates than wage income. They may receive imputed rental income from multiple homes and major consumer durables such as automobiles, art collections or yachts, which the federal income tax misses altogether.
https://www.wsj.com/articles/SB10001424052970203462304577139232881346686
@wildgrass saidProperty taxes are a few thousand dollars. Maybe a few tens of thousands in some extreme cases.
Well I don't really buy the "billionaires don't have money to pay taxes because its invested" line.
Your property doesn't make money, but you have to pay non-actualized gains every single year on it. Just do the same with wealth. A wealth tax should be less of a burden than property tax because the wealth is making 10% year over year. With wealth taxes, the rich still ge ...[text shortened]... bribing politicians to keep their sweet heart arrangement with the government. They have the money.
Taxing unrealized capital gain seems messy and impossible to administer. What if it's a closely held business?
Heck, I'm a little entrepreneurial. I have a little venture going with some other people. How much is the business worth on the open market? Heck if I know. But can you imagine having to get an market appraisal of every small business every year so you can liquidate a portion of it to pay the IRS? Seems impossible to administer.
You want to only assess the wealth tax to publicly traded companies? How exactly do you want to do this?
Yes, I'm not a billionaire. But the principle is the same.
Like I said, I am quite curious to see how and if California can pull this off.
Based on the state's track records, I'm guessing that they'llpull this off around the same time that high speed train travels from SF to LA.
- Joined
- 20 Oct 06
- Moves
- 11051
@sh76 saidYeah, property taxes are relatively minimal expense, but they are paid EVERY YEAR on an appreciating asset that does not yield any income (at least if it's your primary residence). You have to find the money to pay it from some other source.
Property taxes are a few thousand dollars. Maybe a few tens of thousands in some extreme cases.
Taxing unrealized capital gain seems messy and impossible to administer. What if it's a closely held business?
Heck, I'm a little entrepreneurial. I have a little venture going with some other people. How much is the business worth on the open market? Heck if I know. But can yo ...[text shortened]... guessing that they'llpull this off around the same time that high speed train travels from SF to LA.
You can look at statistics showing that California billionaires saw their net worth go up by 35% in the last 3 years. That is a huge sum of money and they paid taxes on none of it, and there are ways that they'll never have to pay taxes on any of it. With a wealth tax, they will still see their net worth go up, by a lot, but it will up by a slightly lower percentage.
@wildgrass saidThey'll pay taxes on it when they liquidate it. That turns an unrealized gain into a realized gain. If they keep it until death, they'll pay estate tax on it instead.
Yeah, property taxes are relatively minimal expense, but they are paid EVERY YEAR on an appreciating asset that does not yield any income (at least if it's your primary residence). You have to find the money to pay it from some other source.
You can look at statistics showing that California billionaires saw their net worth go up by 35% in the last 3 years. That is a hug ...[text shortened]... they will still see their net worth go up, by a lot, but it will up by a slightly lower percentage.
You can't purchase something with a corporate stock. Sooner or later, you need to liquidate it to use it.
1 edit
@sh76 saidCA has no estate tax and the Feds are doing their best to eliminate it as well.
They'll pay taxes on it when they liquidate it. That turns an unrealized gain into a realized gain. If they keep it until death, they'll pay estate tax on it instead.
You can't purchase something with a corporate stock. Sooner or later, you need to liquidate it to use it.
Stocks can be used as collateral. They are not useless until liquidated.