California plan for wealth tax on anyone who spends 60 days a year in the state
wsj.com
wsj.com
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.
Thank you. We really need news websites to some how more clearly delineate opinion pieces from news desk pieces. In the old days, you knew which was which based on what page of the paper it was on. A standard that has all online opinion pieces published with a colored background or something would really help.
Maybe it's easy to miss for someone's first time on the site, but I've personally never had any issue.
Also when WSJ posts to social media they prefix the headline with "Opinion"
I’m sure an eye tracker study would show that few people read that part of the page.
What more do you want?
The title practically screams opinion piece. No serious outlet would write that at the top of a news piece.
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...
https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor...
I mean I don't have a tonne of sympathy for people with tens of millions of net worth, but it just seems wrong in principle. If I start a company and it gets valued at 30 million dollars, why should the government be allowed to force me to sell my company to pay their wealth tax? Seems wrong to me, if you own something you should be allowed to keep it indefinitely. Property taxes are a bit of a grey area, but they make more sense because of all the infrastructure required for a house to be accessible.
Or another example, I own a piece of art or a car passed down through my family that is worth 30 million dollars (maybe it's a mclaren f1 or something). Now the government is going to force me to sell my car? I disagree with that, obviously that's an extreme case, but laws should still handle cases like that.
It also doesn't have to be ham-fisted. The concerns you bring up are legitimate and legislation is able to account for them.
How is the government forcing you to sell your company? They're forcing you to pay 0.4% of the money you own over those 30M dollars in tax, but that's it. Do you truly believe that there are people who make less than 0.4% per year profit on their >30M assets?
I personally know multiple startup founders worth $10-$20M on paper who made $120K/year salary for years (or still are.) It’s hardly unusual, startup valuations are high these days, and VCs and the founders themselves want to reinvest in growth, not issuing distributions.
A founder owning 40% at a $50M valuation would feasibly have to double his salary to $240K to afford the $80K/year wealth tax, after paying income taxes on the salary increase in California.
That’s realistically one employee they no longer have the cash flow to hire. A $50M startup may have something like $2M ARR, so if they don’t want to burn investment funds, they could support maybe 8 employees at their ARR level. Knocking out one employee at that size is significant.
Or you could say they should get VC to support hiring more employees. Now the wealth tax is indirectly impacting the founder's equity—forcing you to sell your company.
We can argue whether they should be forced to liquidate a portion yearly for taxes, but let’s not pretend everyone worth $20M on paper can light $80K cash on fire yearly without consequences.
So the tax actually says that a founder owning 40% of a $100M valuation would have to $40k per year (0.4% of the 10M that they own over the base 30M0). By your calculation, they would have to pay themselves ~$200k per year to afford that, which would be ~0.5 employees for a company that can afford ~16 (simply doubling your numbers for employees and halving the increases because of the half tax).
This doesn't seem like such a horrible onus on a corporation. Now, if the valuation is wildly off, then perhaps there will be bigger problems - but that would also mean that this law gives better incentives for correct valuations of companies, a win in itself.
That's a big assumption. Not all capital earns for you while you sleep.
> Those who benefit the most from the system should pay for it.
That's also a big assumption. Just because one has capital does not mean they're benefiting from the regime they're currently under.
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.
Honestly, my major problem with wealth inequality is not that rich people get to have money; it's that wealth concentration leads to power concentration. That's not healthy for democracy. This is probably extremely controversial, but I say go ahead and collect a wealth tax and then burn everything you collect. It's not about the budget, it's about limiting the power of billionaires and the corporations they control. There are probably better ways to accomplish that goal, but a wealth tax is at least a start in the right direction.
I'm not totally convinced by this. in fact, I'd argue the opposite: wealth is the result of power, not the cause. consider jeff bezos; I'm sure we would all consider him a powerful man. is he powerful because the shares he holds are worth $200 billion (on paper), or is he powerful because he controls one of the largest companies in the world?
here's a thought experiment. suppose there was an asymptotic tax that limited net worth to a maximum of $1 billion, so jeff bezos would only have 0.5% of his current assets. how much would his power be diminished? I tend to think his status as the founder and CEO of amazon would put him in a pretty similar position.
[..]In economics, capital consists of human-created assets that can enhance one's power to perform economically useful work. For example, a stone arrowhead is capital for a hunter-gatherer who can use it as a hunting instrument; similarly, roads are capital for inhabitants of a city. Capital is distinct from land and other non-renewable resources in that it can be increased by human labor, and does not include certain durable goods like homes and personal automobiles that are not used in the production of saleable goods and services. Adam Smith defined capital as "that part of man's stock which he expects to afford him revenue". In economic models, capital is an input in the production function. [..]
i think you misunderstand what capital really means..
Mostly it's about creating imbalances particularly great ones so that power can be projected through coercion. The world runs on on the wealthy getting poor people to do the work they don't want to. With the rise of the finacialised economy we are far away from your definition.
I figure if we allow passive income, we should allow passive taxes...
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.
The stock investments incidentally ARE already taxed, whether you are actively managing them or if someone else is doing it for you and collecting a fee in the process.
California doesn't even tax gains at a lower rate than ordinary income...
I could go either way with wealth taxes—-there are efficiency and services arguments that go beyond just real property—-but I have zero problem with inheritance taxes.
You want a Van Gogh or McLaren, you go create value just as your deceased would-be benefactor did.
If it’s your company, is there any particular reason you don’t pay it (or a loan against your equity) out of cash flow? Just like every other significant expense?
If it’s a painting or a car, it’s already getting taxed as an inheritance, so this is just a .4% increase in a 40% tax, no?
I happen to agree that wealth taxes are unwise, but it’s not because implementation is weird. We already have property taxes; we’ll figure it out.
The main reason it’s bad is because wealth taxes compound, even when you take losses on investments. Retirement accounts will simply be ~20% smaller than without the tax.
I don't understand this widespread belief that you have a right to permanent ownership. Someone has to enforce that ownership, and that has costs. What does seem wrong in principle is taxing transfers of money, which are virtually free with modern computer systems, not to mention the increased economic friction in the labor market.
You raise a good point with liquidity. Personally, I wonder, how could we set up a system of fractional ownership that delays repossession in such cases? Of course, if you never pay tax on that heirloom, then you'll eventually lose a controlling interest- and I think this makes sense, especially for fundamentally limited resources like land.
It's not that much either, only 2.5% for currencies like gold and silver over a minimum threshold (so the poor/lower class are exempted anyway).
However, as I explain in my other post, there is no forcing to liquidate a fixed portion of any holdings you have. For example, if you own property and rent it out, the property value itself is not taxed, only the money you make out of rent if you hold on to it for over a year (and it's above a minimum threshold). Similarly if you owe shares in a company, the taxation is not a direct percentage of that ownership, it depends on things like debt and the amount of produce or products the company owns each year.
Income tax is unethical and predatory as far as I'm concerned, not to mention continues to fail even at absurdly high taxation rates.
[1] https://www.islamweb.net/ar/fatwa/181283/%D8%A3%D8%AB%D8%B1-...
Of course, there are limits to the protection they provide- you can always buy more.
I would make a strong delineation between the adjudication of property rights and the enforcement of property rights. Those are two different things, and it has ever been the case that individuals frequently must act in an enforcement capacity. Potentially, if you tried to take someone's land, they will shoot you. That is enforcement. Adjudication happens when a judge says they were in the right.
The point is that the government maintains an entire system for tracking, resolving disputes, and enforcing ownership. Think about who has the final say in a dispute over whether you own your car or your house or your company. The government adjudicates ownership disputes and then enforces that adjudication via people with guns.
It’s easier to notice this system if you imagine the counter-factual: if you lived in a failed state, and you wanted to keep your your home or car you would probably need to hire some guys with guns.
(When you think about it this way, you notice that the “value” of the government’s “service” is much higher for people who own a lot rather than for those that own a little.)
Only 42% of US households own at least one gun. Which means at least 58% of households depend on police for protection. Moreover, having just a gun is not going to be sufficient and you will need other forms of protection offered by police and judiciary. Finally, just having an effective property rights protection and enforcement system deters a lot of crime. None of those things are available for free and property taxes are an effective way to pay for them.
Case in point, in 1986, Michael Lee Platt and William Russel Matix went on a crime spree in the Miami area. They started by murdering a man at a shooting range to steal his firearm and car. They then tried and failed to rob an armored car, murdering an armed guard in the process. Next, they robbed a bank. After a couple months off, they robbed another armored car, during which they stole a guard's rifle and murdered him with it. A couple months after that, they robbed and attempted to kill another man at a shooting range, using his stolen car in a bank robbery a week later.
All of the victims these criminals shot were armed, which did not dissuade them from initiating attacks. The armored truck guards were presumably trained, but not sufficiently to defend against attackers whose opening move was gunfire.
The classic example of this differential response was in 1992, when the LAPD staked out defensive positions to protect the mansions owned by wealthy white political donors in Hancock Park, while Koreatown burned with immigrant shopkeepers left to fend for themselves by forming armed vigilante militias until the national guard was deployed and restored order.
(Note that this includes consumption of housing, and VAT + imputed rent is basically a property tax.)
it's charity because someone has to take care of your financial needs because you are incapable of managing it yourself. someone has to take over another in need and take responsibility out of the kindness of their heart. it cant be demanded. the notion that we deserve a portion of another person's hard word makes a mockery of their hard work and dedication.
assets become valuable over time and the value of some assets is completely relative. if jeff bezos sold all his wealth in amazon shares, first, it wouldnt be the billions it is now..(even if he could sell it..), secondly, it would take it with it millions of dollars of income for hundreds of thousands of people. the notion of 'wealth' is a man made construct. wealth is what we consume. everything else is a resource. you cant tax resources. it is an asset that hasnt been realised yet.
The least parasitic is taxing commerce.
Anything else is stupid, like taxing people or property where the parasitic effect grows to be unbearable even when rates remain constant.
You can't fix stupid but it can get elected to decision-making positions and leverage the foolishness.
There is no meaningful reason that a society should want you to inherit a piece of art or a car from your ancestors. (The only practical one is that the sorts of families who can pass down expensive art also control society.)
You didn't work for that art or car; you simply had the fortune to be born into a family with one. Every single reason why it is unjust for someone to inherit a government role applies here. If you don't think King James the Nth should rule simply because King James the N-1st did, why do you think James Jr. should have 30 million dollars in financial power simply because James Sr. did?
Just like hereditary rule, hereditary property breaks the fundamental relationship between work and reward that is common to any functional society. If you work hard and get a spare $30M to buy a car, sure, whatever, we can say you were incentivized to work hard and produce $30M of value. But if you work hard and give your kid $30M, how is your kid incentivized to do anything?
And the argument that well-off parents have an inherent right to make their kids' lives easier leads directly to the correlation between class and race/caste. If it's moral for me to make my children better off than others' children, who is to say it's immoral for me to make my nieces and nephews several times removed better off, too? Who is to say it's immoral to make all the people in this town who came from a certain ancestral lineage better off?
And on top of all that, it usually doesn't even work. We associate "nepotism" with waste and corruption, not just distasteful behavior, because we understand those who are chosen because of their family relationships generally aren't more qualified than the rest of the candidates. Even at the smallest scales, when you hear stories of the CEO's college-age kid getting an internship, it's almost always the case that the child has not inherited any particular talent, and in fact is probably less talented than would be needed for the job.
Parents should be allowed to provide for their children to set them up for adulthood - they should be able to pay for housing and food and clothing and education. When they can't, society should step in to help them, and we're almost there: we have welfare programs and private charities for basic needs, free public education, and (at least among private colleges with sufficient endowments) full need-based financial aid. Parents should not be able to do more than that, in a society that prizes democracy and equality over the natural superiority of certain families.
1) They are difficult to enforce. How to measure the value of a famous painting? What if the value does down? Is there a refund of wealth taxes?
2) They are an entirely new class of taxes that will give politicians the ability to increase the overall tax burden over time. At first, they will only impact the very wealthy, but it is much easier to adjust the threshold down a little than create a whole new tax.
The history of income tax in the US is a guide. At first, it was temporary. Then only impacted a few people, now it is a progressive system that reaches large swaths of the population.
https://en.wikipedia.org/wiki/History_of_taxation_in_the_Uni....
Anyway, I am very friendly to the idea of a wealth tax. At a minimum it's more progressive than an income one.
What I don't like is all the attrition that comes from the government having to put price on things, and mandating liquidity. I also dislike government initiatives that increase the fragility of a society.
So, if one gets a proposal that doesn't suffer from those problems, I'm all for it. Until there I do think it's a great academic subject, but not viable on practice.
The Netherlands has had a general wealth tax since 2001 and there have not been many practical issues AFAIK. There are separate regimes for (1) primary residence (which get yearly assessments based on comparable sales/house price indices), (2) significant (>5%) business ownership (businesses need balance sheets/valuations anyway) and (3) all other assets taxed at around 1.2% of net asset value, first 30k exempt. There are no capital gains taxes. The value is assessed on 1 Jan every year. Whatever happens during the year is ignored.
For bucket (3) the vast majority are in practice held in financial assets (stocks, bonds, savings, loans) and non-primary residence) real estate, most of these are pretty straightforward to value. There are explicit exemptions for art and science artifacts, pension investments (401k), movable property for personal use (cars, furniture) [1].
There's a good degree of pragmatism is most of this. The tax authorities realize that trying to squeeze some drops of people with Picasso's in their basements is largely a waste of time and effort. Rich people typically don't hold a large part of their wealth in illiquid, difficult-to-appraise assets for obvious reasons.
[1] Here's a list in Dutch: https://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/...
Oh, the games they will play!
It would be like r/wallstreetbets but with everyone’s private property. That will end well.
There are several solutions to this hypothetical problem.
The parent said the owner decides the value of their premium item. The owner is claiming indifference as to whether it is sold at their chosen value or not.
If that's only fair market value (in the rest of the market), the owner is indifferent to owning the asset at all and is just inadvertently hoarding it. The economy works better for everyone if the owner is encouraged to sell to whoever values it most highly.
If the call option is called in (above the owner's valuation plus costs), an auction could be triggered, avoiding the arbitrage of first dibs.
Overall, this is a hair on the back of a nit. The law should be that you pay tax on your global wealth - avoiding and evading tax is already a choice that people make. It's nothing new.
This isn't my idea; this is an idea proposed by an economist and a lawyer, who have both thought through the implications of such a policy.
https://press.princeton.edu/books/hardcover/9780691177502/ra...
I'd like to see an argument explicitly from the calculus of option theory, which is the operative mathematics here. I am not saying that a compelling supportive argument does not exist, just that a credible argument must be presented in these terms because that is the central mechanic. Maybe there are some subtle arguments that make it a good idea in this context but on the surface it is quite apparently a really bad idea with a lot of literature to support that impression.
I don't know the specifics of this proposal. But I live in a country that has a similar wealth tax, and it doesn't work that way here. When you found a company, its shares remain valued at nominal value for tax purposes, until you sell or transfer them. Only after that they'll be taxed as wealth.
https://en.wikipedia.org/wiki/Taxation_in_the_Netherlands#We...
If you believe laws were totally fair in the past, then a wealth tax should be unfair now. Is that your stance? Has taxation been fair?
My stance is that the notion of private property is ingrained, we went to civil war due to private property of slaves, the french revolution was fomented due to financial problems due to untaxed private holdings of the church and wealthy people. Does having private property from the past mean it's ours and no one can touch it?
History has shown that oligarchies and massive wealth disparities lead to negative societal outcomes. IMO, Taxes should generate revenue for public works and lower negative societal outcomes due to negative externalities, therefore wealth tax is fine with me in principle.
Taxation of company shares depends on many things, such as the debt ratio and value of products the company owns. It's very possible to owe only a tiny amount, or none at all, while still doing business and making money. This is the superior approach which has proven to work if you look at history.
I used to as well, but now I flipped. I don't think you should be taxed for doing things, I think you should be taxed for wealth. I think there should be no tax for working ( income ), buying things ( sales tax ), etc. Activity which promotes economic growth shouldn't be taxed. But wealth should be taxed. House/assets/etc should be taxed.
It's insane that you get taxed at 39% for work ( income ) but someone letting his money "do the work" gets taxed at 20% ( long term capital gains tax ).
> I should be able to go live in the woods alone and not have the government take some percent of my net worth just because I exist.
But the government protects your ability to do so. So no. Though I'd be in favor of governments setting aside land internationally where people are allowed to live "in a state of nature". They are not allowed to form tribes/governments, but are allowed to live "free" as they wish untaxed without the help of society.
> If I start a company and it gets valued at 30 million dollars, why should the government be allowed to force me to sell my company to pay their wealth tax?
Cause the company exists in a society governed/protected/etc by the government? It's the beneficiary of the environment.
> Now the government is going to force me to sell my car?
Nope. You could always go out and work to earn money to pay the wealth tax too and keep your car.
I'd be in favor of removing all taxes for one wealth tax.
Reminds me of stories about people losing their homes for unpaid property taxes. I recall a story about some paultry amount of unpaid tax (<$100), but because the debt was neglected, the (a few) state's laws permitted the home to be siezed and sold to pay the unpaid amount, and the state gets to keep the balance.
Even owning a home in the woods isn’t safe.
Believe it or not, the bottom ~50% don't have enough money to tax. The next 30-40% have some but not enough to raise enough money to help. The taxes have to be focused on the top 10% and more likely the top 1-3% to raise enough to meet these demands.
I think the biggest problem will be trying to enact this on people who aren't California (or even US) residents who are now out of state. You can tax visitors for actions they take while they're in your state (sales tax, hotel taxes, even income) but when they're not there and haven't been there for years?
The State of California may get a rude awakening on this one.
It’s kind of a pain for someone living in say Kenya which doesn’t have a tax treaty with the US, but it’s not totally absurd to think you owe something to a country whose citizenship you continue to benefit from.
Medicare is much trickier as every American over 65 is entitled to it, but I'm not sure how that coverage works if you live outside the US.
This is because the US makes it illegal for families to pay ransoms.
As with most things international, not being American is an asset in such a situation.
https://www.newamerica.org/international-security/policy-pap...
I never thought about my born Country is going to help with anything as i moved away and pay taxes somewhere else. I rather be rescued to “home“
https://www.taxesforexpats.com/expat-tax-advice/us-tax-treat...
Yes it is honestly. The US is the only G7 county (and one of the only countries worldwide) to engage in extraterritorial taxation.
It is absurd. If you are gaining from services in that country, you should pay taxes to that country. If you have moved abroad and aren't gaining from any services if that country, you should not. Because you are effectively not a member of that community anymore and should be contributing your taxes to another society. To even have to handle the double taxation accounting is ridiculous. It's that simple.
Does someone gain benefits of being an American even when not living in America? Potentially, but many of those benefits could be connected to more targeted taxes than simply worldwide income tax.
This is clearly not about justice and is instead about the long arm of the IRS seeking their pound of flesh anywhere they can get it.
I know Americans who left the US 40 years ago and have lived and become fully integrated citizens of other countries. Yet simply to retain the right to return the US at some point, they must pay taxes every year in the middle? And trying to give up their citizenship isn't that easy either.
If we want to prevent tax havens, I'm totally fine with that. Force sensible global tax regimes and prevent countries from being havens. But the solution isn't extraterritorial taxation.
People have the choice of giving up their U.S. citizenship.
> Yet simply to retain the right to return the US at some point, they must pay taxes every year in the middle?
Yes? Or do we allow everyone who isn't participating in our society as a citizen would to come and go as they please?
Sure, but if you have more than $2MM assets then you must pay an exit tax.
From: https://1040abroad.com/faq/renouncing-u-s-citizenship/
“The Exit Tax that you, as a covered expatriate, would have to pay is calculated as if you have sold all of your assets at Fair Market Value on the day prior to your relinquishment, and the associated capital gains are subject to this tax. The Internal Revenue Code provides that the first $699,000 of this capital gain will not be taxed. The tax payment is due within 90 days after giving up your U.S. citizenship. Expatriation is considered to be effective for tax purposes, even if you fail to file the Expatriation Information Statement (form 8854). The exceptions from the main rule are certain deferred compensation items, specified tax deferred accounts, and non-grantor trusts.”
“You can still become taxable in the U.S. under the normal U.S. tax rules if you continue to have U.S.-sourced income.”
Letting people take advantage of all the US offers while paying no tax on their growing wealth, and then letting them retire elsewhere without having put in their fair share makes no sense. Of course, we could stop taxing capital gains so favorably, as an alternative.
I'll agree though that the reporting and other requirements are needlessly complex.
https://en.m.wikisource.org/wiki/Universal_Declaration_of_Hu...
> Article 15
> 1. Everyone has the right to a nationality.
> 2. No one shall be arbitrarily deprived of his nationality nor denied the right to change his nationality.
The US is one of the few countries in the world taxjng non resident citizens.
I lived and worked in country A, have citizenship with country B and the most amount of money when I worked in A was sent to the US, where I have no rights, no one would come for me to 'save me' when I'm held hostage or whatnot. Nothing. But I paid more taxes to the US than to country A (and nothing to my home country).
I relinquished my Green Card two years later.
if you are a Software Dev for a FANG or FANG like company guess what you are in the top 10%.....
Please tax the wealthy more. Send the tax man to my house and all my peers. We can afford it just fine.
Giving money to government is not compasssion, Helping people get food, shelter, healthcare,etc yourself is compassion. Voting for government to use guns to force people to pay what you have perceived as "their fair share" in order to provide those things to people is not compassion, it is self-righteous bullying.
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 bottom 95% know they'll experience a steady decline of income and purchasing power if we don't tax the wealthy more?"
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 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.
Money is not a resource like water, money is a medium of value exchange. In the case of income money is the medium where I exchange my Time, Knowledge, and labor for a given quantity of money which I then use for trade to obtain things others have used their time, money and knowledge to create
It is a simpler and more abstract instead of me having to grow wheat to exchange with a baker for bread
Given this, I do 100% believe I am entitled to 100% of my Labor, time and knowledge. You seem to have the belief that I am a subject or property of the government, as this the only conclusion one can draw in order for your world view to square with what money really is.
I believe it is unethical to take by force or taxation a persons labor, and thus by extension it is unethical to take a person income by theft or taxation
> Given this, I do 100% believe I am entitled to 100% of my Labor, time and knowledge.
If you produce a profit for your employer, you are not earning 100% of your labor, time, and knowledge.
Realistically, your labor produces some value X. The government AND your employer expect a certain percentage of X.
We both want the same ideal -- maximize worker wealth -- it's just that I see us getting there by decreasing employer percentages and accepting some taxes. You want to get there by decreasing taxes and accepting some loss of value to your employer.
I assume here you are implying I get something of value from my tax dollars, but this does not make it any less of a theft. If I come to your home, mow your grass then "tax" your car from you as payment for my services you would still call that theft. and rightly so.
Simply because the government "gave" me services I neither asked for nor consented to does not mean their taking of my labor / money is ceases to be theft
>If you produce a profit for your employer, you are not earning 100% of your labor, time, and knowledge.
This is false thinking, given your clear bias to socialism I can understand why you think that but it never the less false
My employer accepts my labor (at the agreed rate), then combines my labor with the labor of others, and their own capital investment / or other assets (like a brand) where by that is repackaged by them to be sold as goods and services on the market.
True the total value of the end product sold has to be greater than their purchase cost, that is how businesses work, and how a Value Add economy functions, that however does not mean I did not get 100% of the value of my labor, on the contrary.
I will ignore the attempt the slide in the government as a valid and ethical actor in the transaction, they are not. A market transaction consists of the buyer and seller that is all, the government is an unethical 3rd party leech on the system
Keep in mind I am not opposed to all government finance, at the end of the day I would even support a UBI, in fact I would support a UBI over all other forms of welfare. I however would implement such a system using Georgism Single Tax model on natural resources, not on income, wealth or labor.
Well, such is the price of citizenship. You certainly are free to exercise your freedom of exit to move to a country where the government behaves otherwise.
This is aside from the fact that is a clear logical fallacy [1]
So indeed, you can’t leave- because unless you move to no man’s land and set up your own government, you will always be betrayed by your own principle, no matter what country you live under.
No, I just do not accept the idea that the terms of the "Social Contract" can be changed on the whims of a Majority / democracy, or worse on the whims of an elected officials
I believe in the Lockean principle of natural rights, on which I believe the terms of said social contract are written and are unchangeable
I believe what Authoritarian Democrats and Republicans call the "social contract" is a complete perversion of the concept in order to justify their own unethical power driven political ends.
IMO, this is a false equivalence -- governments are uniquely different from other entities.
> This is false thinking, given your clear bias to socialism I can understand why you think that but it never the less false
I don't see how you can say that this is objectively false. It's ok to say you disagree and you see it differently, but just telling someone their opinion is false isn't going to further a constructive dialog.
I suspect our end goals probably align in many ways. I also support a UBI (though I think some forms of welfare may still be required. For example, to assist people who may need help getting access to their UBI, and to provide some mechanisms for collectively bargaining for things like health care if we keep it private.)
This is another difference on our world view. I do not believe they should be. The foundation of the American style of governance is "For the people by the people".
The government is the common organization of individual natural rights. Any legitimate force the government has comes from the common organization of the natural and individual right of self defense. We the people ordain and establish governments to protect our individual rights. As such the common force is to only do what the individuals have the natural and lawful right to do, to protect our rights.
So if it would be unlawful or unethical for me to enter your property, mow your yard and take our car as compensation it should also be unlawful / unethical for the government to do the same
Granting government special powers is how government abuse occurs. Just look at all the police abuse, this occurs because we have given the police immunities, protections and powers not afforded to the general public. This power will, is, and always will be abused by those that hold it
This was the fundamental problem with the Monarch system we revolted from over 250 years ago, and as we granted the government ever increasing levels of power far above what a normal citizen could ever dream of the resulting problems are clear, evident and predictable. Including the resulting Wealth inequality which I can and have made a case is cause by government regulations not by capitalism or lack of regulations
I don't think that's what syshum is talking about. You said, "Send the tax man to my house and all my peers. We can afford it just fine".
There is no need for the tax man to come to your house. Go to https://fiscal.treasury.gov/public/gifts-to-government.html. There's a link there, you can even use PayPal if you want. Figure out what the additional amount is that you think you should be paying in tax, and make the payment. You can do it this very minute.
Be the change that you wish to see in the world.
I invite you to consider:
If my stated goal is to increase the tax on wealthiest folks with the intent of distributing more to the lower class and reducing wealth inequality.
Should I:
a) Spend 100% of my surplus income on gifts to the tax authority
or
b) Spend 100% of my surplus income on organizations that will organize community efforts to achieve my goal.
It's a concept called the 'opportunity cost' -- option A is acting in the spirit of my goal, but does nothing to achieve my goal. If I am a rational player (and I'd like to believe I am), to achieve my goals it's considerably more effective for me to spend my money giving to charities that align with my objective.
Therefore, I spend my surplus income on community organizing, land trusts, and other efforts that will build support for my goals.
Edit:
This is the same reason why I don't ask people who care about the national debt to just open their pocketbooks. If that's a cause you care about, I'd expect you to advocate for it and give your time/money towards groups that make it happen. I happen to think it's a ludicrous thing to care about.
We can aggressively disagree about policies and still agree that we are acting in a rational way respective to our worldviews. There is room for both of our opinions here, but we should be able to discuss them without relying on these sorts of goofy strawmen.
That's not exactly "Send the tax man to my house" now is it?
You want the government to take my money and use it for your ideological purposes that I do not believe in, to implement socialism in America, that's what I think you're saying. Am I wrong here? Sending the tax man to your house vs. doing that, those are two very different things.
We can find common ground here, send the tax man to your house, we can agree on that at least can't we? And you can do that right now, this very minute, PayPal over what you think the correct amount is.
This is actually a tactic that climate change denialists push for (accuse people of not doing enough personally so they don't go after the real source of the problem and blame themselves instead)
It's a milquetoast argument intended to defend the status quo by attacking the people that want to change it.
It’s around 3.2-3.5% of our budget. That we know of. That’s close to a trillion/year.
https://en.m.wikipedia.org/wiki/Expenditures_in_the_United_S... : this is the United States federal budget. What is it that we couldn’t do with this much money can we do by increasing tax by a minuscule minuscule percentage that is nothing for the govt budget but makes such a massive dent for families, disposable income, consumer index, business development and investment.
Where is the accountability. The taxes are to run the govt. the job of the govt is not to manipulate taxes to impose laws to cancel inequalities. This is thuggery by taxation. Govt should be small and efficient. Big bloated govts with access to unlimited tax monies will only get bigger and bloatier. Until their expenses will explode like Mr.Creosote in Monty Python’s Meaning of Life. It is that ‘wafer thin mint’ that was the last straw that broke the camels back resulting in the Silicon Valley exodus.
Making public goods into voluntarist things like charities isn’t benevolence. Robber barons have no problem giving a pittance to the poor, I’m sure, as long as that keeps them from being “bullied”.
please be generous. the world needs more people than you. immigrants have a different mentality when it comes to familial responsibilites. i have two sets of grandparents and three dozen aunts. and i dont even know how we are related. extended families are really really really extended. and i derive so much pleasure in making their lives better and happier. why should i trade my pleasure for your philanthropy disguised as milking me for tax dollars.
hundred dollars fed half a dozen people in my indian home state for a month. californians complained that $1200/month isnt sufficient. i know where i want to send my money. i feel like what i do is real redistribution of wealth. so..no to your idea.
if you really want to help people, reach out to me..i know where you can send your extra dollars to other parts of the world where people have no job, no means of feeding themselves and their families and their govts are too powerless to take care of all their millions.
People who look out for themselves and their family only and who wants to make public goods into a voluntarist thing through charities are the problem. They are of no use to anyone except their immediates and are only holding progress back.
The question I think you are asking is, "If you give your money to the government, you don't know where it goes. Perhaps it is wasted. If you give it to people you know need it locally, you can have immediate results. Why push for the former?"
If I've understood you correctly, that's a totally valid question, and it's one I think about quite a bit. I could, for instance, really focus on helping people in my immediate area. I could buy a lot of meals for a lot of people.
But ultimately, I think I can achieve more by organizing. If I can spend some money on mutual aid to help out some folks locally, and spend some on building coalitions and participating in collective action, I think I ultimately achieve more.
Example: We have a homelessness industrial complex in California. Our taxes go more towards paying activists and those who work with the homeless rather than building homes. The only way to get rid of homelessness is to build homes. It’s not like you can talk your way out of street living with talk therapy. While a portion need help..all of them need to be off of the streets. When California shows some results, I will consider supporting more taxation.
We also need crisis intervention, counseling, drug programs, and support.
I want to share more re problem statement/solution strategy..but a little busy now. I hope to revisit this at some other time. I just have to find it for a quick cut and paste from where I had written earlier. Cheers.
By all means, continue to aid the organizations that bring you happiness. I will continue to try and make a positive impact on the sphere I am familiar with (generally the Pacific Northwest.)
I regularly do give up money and time, in multiple ways. From purchasing land and reforesting it then protecting it with conservation easements, to giving to social housing efforts, to giving aid to overseas organizations.
That said, I don't view raising taxes as philanthropy. To me it's about maintaining the minimum set of societal standards that anyone should be able to enjoy -- housing, healthcare, food, etc. should be accessible to anyone, no questions asked. If that means that those of us at the top need to operate with less income, then I see that as a good tradeoff.
That said, I'm only interested in folks who really are at the very top of the income brackets.
The first order of business is to find accountability and trim the excess and make the current dollars work. Before instituting new taxes.
Are you aware that top tax rates are a fraction of what they were decades ago? Perhaps, the more accurate lens to view things is that the wealthy/business has lobbied for less and less.
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 falls apart when they pull out their calculators and realize that Jeff Bezos entire net worth wouldn’t come close to paying off everyone’s student loan debt or solving climate change.
Meanwhile, completely false Tweets about how Jeff Bezos is about to become a trillionaire or how he could simply solve the entire student loan crisis himself gain 100,000s of likes, some of them from prominent politicians or their campaign managers. People don’t care about the facts right now.
Frankly, many people don’t really care if this solves anything or if second-order consequences result in a net decrease in tax revenue due to people simply moving (as is the case with some wealth taxes in other countries). For many, this is more about punishing their bad guys than generating tax revenue to accomplish something.
The fact that the state can also use some of this money to help with the funding of social programs is a secondary benefit.
If his money gives him political power, the solution is to fix the political system, not steal his money.
My own business began this year with $0 and I'm way past $100k. I had to live in my car for two months, absolutely worth it though, it helped me focus like never before. I created excellent product and then spent a lot of time both online and offline finding customers.
And now imagine you do this, and after all the shit you went through people start saying you don't deserve your money, completely ignoring the huge risk you made and the opportunity cost behind you, and that YOU MADE THE THING. What would you think?
a special right, advantage, or immunity granted or available only to a particular person or group.
A car? Access to the internet? Their mental and physical health? No dependents? It's unclear how emteycz fed, cleaned, and clothed themselves while they had debt and no home, but plausibly there's some assistance there.
And the parent poster was talking about their privilege today in any case.
$200 one
> access to the internet
McDonalds and KFC
> Their mental and physical health
Both nope
> how emteycz fed, cleaned, and clothed themselves
Black market jobs, and sometimes not much to eat. I had clothes from before. Zero assistance, that's how it is in our little social democratic republic.
And if you are making $100k, you aren't the target of anyone's tax plans.
While yes, at 100K you can probably afford to pay some taxes, it's not where we should be looking to solve any real meaty problems.
The value that a machine imparts to its end product is equal to the portion of its total value which is used up in the process of production. Same with other forms of constant capital like tools and raw materials. So if a shirt machine costs $500 and can produce 1000 shirts before it wears out, then it imparts $0.50 of value to each shirt produced. When the end products are sold on the market, their price always covers the cost of replenishing the constant capital.
Constant capital is merely "congealed labor" meaning that labor had to be performed to produce it in the first place. When workers utilize the constant capital they unlock that value and also impart the additional value of their labor to the final product. The sum of the value of this labor plus the value of the constant capital expended equals the total value of the end product. When this end product is sold on the market as a commodity, its exact price fluctuates based on supply and demand and other factors, but its center of gravity is always the amount of labor required to produce it and all its components at a given level of technology.
Capitalists are the people who own the machines, tools, and raw materials. They pay workers a wage to utilize that constant capital and produce commodities for sale. This wage is determined by the conditions of competition in the labor market, but fundamentally it is anchored to how much it costs a worker to provide for his subsistence (e.g., food, clothing, shelter) and not the amount of value that his labor imparts to the commodities he helps produce. The difference between the value a worker's labor imparts and his wage is what the capitalist appropriates as private profit.
The development of automation like the robots you mention is incentivized by market competition. Automation enables capitalists to produce more commodities with less labor. Any competitor who can't match the level of production is driven out of the market. But because automation reduces the amount of labor required, it also necessarily reduces the rate of profit on each commodity. Thus to maintain the previous level of profit, production must be increased and/or wages and labor conditions must be suppressed. Over time, at the scale of the whole economy, this leads to crisis as neither the capitalists nor the workers can consume all the commodities produced (the capitalists are too few and the workers' wages are insufficient by definition).
But if the investor diversified well his investments, he's likely to have lower risk than an average worker.
Ownership requires management and the steps which were required to achieve that ownership. Somebody maybe had to work hard to own, while others inherited.
I'm not talking about his worth as a human being, but exactly about his contribution to the wealth he now owns. His individual contribution to that wealth is not 188 billion times greater than that of any of his employees. It's just that the entire economic and political system as it exists today allows him to extract much more wealth from the enterprise he initially financed, proportionally, than 99.99% of the others who contributed to it - millions of times more than any engineer, marketing wizz, analyst etc. that has worked for him.
Is it normal and fair that he get the biggest slice of the pie that he helped finance and risked a lot for? Absolutely! Should his slice really be billions of times greater than everyone else's? No. But since it happened, the only chance to bring this back in line with the reality of his contributions is to tax him and others.
Ideally in the future, other measures, such as encouraging unionization, fair wages, even profit sharing instead of fixed wages, would make it so that everyone gets their fair share of the work they are contributing to a company like Amazon. Until then, taxes are one of the few instruments to balance the scales a little bit.
> If his money gives him political power, the solution is to fix the political system, not steal his money.
Now that is a fantasy. Imagining there could be a political system that would give equal power to someone who owns ~100k $as someone who holds ~100B$ is a bigger utopia than even communism.
It's all in the realm of "numbers to big for our primate brains to comprehend" anyway, but Amazon as a whole only pulls in as much _revenue_ as 13 million warehouse workers, 14 thousand times less than you're implying.
Beyond that, Amazon has over a million employees. Using a simplistic model of their contributions that Bezos is irreplaceable and each worker is fungible, you'd get Shapley values for the whole organization along the lines of Bezos getting half and the workers splitting the rest. In terms of profits before wages the workers are getting far more than half, and even in terms of revenue before expenses they're only getting a few times less than half. As a crude ballpark, compensation doesn't seem to be disproportionate.
Valid counter-arguments include Shapley values not being an appropriate way to allocate payment (which necessitates choosing which one (or more) of their payout properties you'd like violated, e.g. symmetry among equivalent workers or that payment should depend on value added), my model being so simplistic that it can't possibly be right even to an order of magnitude, declaring that even a factor of 2 is actually important in examining Bezos's income, etc. Appealing to a gut reaction based on numbers that are "obviously" too big is misleading at best.
One is that I don't think it's anywhere close to true that Bezos is completely irreplaceable while all of his workers are not. I have little experience on the differences between a good warehouse worker or manager and a bad one, but I know that at least for software, the difference between a good software engineer and a bad one; or between a good software manager and a bad one; can make or break a business. I'm sure the same is true in many others domains of Amazon's activity (B2B sales is another obvious ones, as are marketing and market research; but I'm sure there are many less obvious ones).
The other point where I think your analysis is flawed is basing the "fair" compensation only on replace-ability. Even if 2 warehouse workers are perfectly replaceable, as long as they are doing the job and their work is absolutely required for the business to function, they should also be getting a large proportion of that business's success. This is where Unions can really improve things - by allowing collective bargaining, they help people who are interchangeable but whose jobs are crucial to get their fair share of the pie they are contributing massively to.
To your first point about Bezos' irreplaceability, that's definitely a potential sticking point, and one we don't have much data on. You'll find one side pointing to how there's only one Amazon (or one Tesla, etc) and to how all other attempts before and after have failed, but that confounds enough variables to not really be useful on its own. I would _love_ to see some good data on how much the choice of founder/ceo matters.
To your second point about how fair compensation is treated, replaceability mattering at all is an artifact of simpler premises. Shapley values are fun in their own right, and if you have time you should definitely read up on them. In any case though, here's a brief overview of the most pertinent characteristics to your replaceability point:
The Shapley values are the unique distribution of funds satisfying all of the following:
(1) All the gains are distributed.
(2) If two people have identical contributions they get an identical pay.
(3) If you mix and match activities you get the same answer (e.g. if you just analyzed contributions to Prime Video or just to AWS and combined the payouts relating to those two divisions you'd get the same value as if you treated them both together).
(4) The payout to people not in the group being analyzed is 0.
(5) For a specific mathematical formalism of the idea, if the whole venture profits then each contributor profits, and if the whole venture takes a loss then each contributor takes a loss.
(6) There is no dependence on the names of workers (similar to 2, but just different enough to need to be explicitly stated in the underlying mathematical formalism).
(7) The result can be expressed in terms of marginal contributions.
They aren't perfect for describing salaries (see #5 for example in the event that a business is losing money), but they're not a bad starting point, especially when we're talking about fairness of large salaries, because other frameworks like examining employee needs or market rates will determine that everything is sufficiently fair if some kind of minimum threshold is being hit (an open question in itself, but seemingly not the point of criticizing Bezos' large income) and because in a profitable business #5 isn't out-of-line with how salaries work -- everyone gets paid something.
Anywho, onto how all of that pertains to replaceability: Shapley values for large organizations are horrendously painful to calculate even with perfect data. They're much easier when you can invoke the symmetry properties, and in the context of a HN comment it seemed prudent to use as few distinct classes of people as possible to consider the problem at hand (Bezos vs workers).
Assuming Bezos is _irreplaceable_ is an easy way to estimate his marginal value -- without him the business makes 0 and with him it makes what it does. If his role is important then that's not actually such a bad estimate because if an alternative founder only created, e.g., a fifth of Amazon then the rest of the calculation works out that the other workers would split a twidge more than half the profits rather than half exactly. I.e., rounding most alternatives down to 0 is a good enough ballpark estimate.
Anyway, _replaceability_ doesn't play into the workers' values at all. The word I used was _fungibility_, and all that means is that I can treat them as having the same value with respect to each other (not with respect to an outside world ready to replace them). It's really not that important in the calculations though and just served as a concrete example. If you assume the rest of the workers have literally any other distribution of value contributions then Bezos' payout remains the same, and the only thing that changes is how the other half is allocated amongst the workers.
According to wikipedia:
> He accepted an estimated $300,000 from his parents and invested in Amazon.
I know literally zero people whose parents could afforded to have given this type of loan, let alone willing to.
If you don't see the choice factor, I think two things happen: 1) you stay where you are because you think, nobody is in fact successful, they only had it given to them, and 2) and you think it doesn't matter what you do, so you will not navigate your path with choices, and see yourself as an agent, but instead see yourself as basically a helpless leaf in the current, tossed this way and that by fortune and fate.
Personally, I feel it's really important to take personal responsibility for my own path, and see where I am as a result of choices. Not just for things like business, but for all of life. I think that's perspective puts me in a position of power, and taking that perspective is something I can control. Even in the context of things like harassment, or accidents, or childhood abuse and trauma, I don't think about it as, "I chose for this to be done to me," but rather as, "I choose what I make this mean, and I choose how I respond." I feel if I give that up that perspective, I willingly take on a disempowered perspective, so I see giving that up as giving myself a disadvantage.
I understand if you and other people want to see things that way, and I myself have the reflex where if I see someone successful I immediately ask myself, "Yeah, but who did they know? Who gave that to them?" and I try to let go of that because I see that as a trap that will make me feel better (by comparatively telling myself, it wasn't my fault, I just didn't get so much given to me, and also by letting me bring down in my own estimation the significance of their success, and thereby their capability, by eroding its legitimacy, since it wasn't them, it was just what they got given) -- and I try to remember that such notions won't help me get anywhere. So I try to emphasize to myself how inspired I feel about this, as in, "I like this. How can I get some of that for myself?"
One way I try to remember this to myself is, "If I can't get from where I am to where they started, how would I ever get from they started to where they go to?" And "win from any position". All the same, I'm not suggesting these are appropriate attitudes for you or others, since everyone has a different path and purpose, and we need a diversity of people who believe different things...but I just hope that sharing this, can give you some insight into the other perspectives that are out there about this. I know how hard it can be to hear even a simple set of ideas like this, because these ideas, if you entertain them run the risk of removing the comfortable distance you put between your own path, and those of others, by being able to explain it away as not having any responsibility yourself. It's a lot easier to psychologically deal with knowing about "people more 'successful' than me" if I can tell myself "it's not my fault" and even "they are not responsible for their success". Taking that responsibility, even just in a perspective sense, prompts you to look at where you are at, which can be very painful. It's not my intention to initiate this sort of response in you by sharing this, and it's not an attack on your position, just sharing my relationship to that kind of thinking, and how I understand it can be a very difficult type of thinking to try. I hope it was insightful and worth your time reading, but if not, at least you have the perspective you already know and like.
However, when taking political and social decisions and analyzing the world around us, we must also look at how people are influenced and how their chance of success or failure is affected by conditions outside of their personal agency. The fact that we are each responsible for our own happiness should not preclude us from observing that there is no downwards mobility and increasingly little upwards mobility in European and US society. It should not preculde us from observing that while productivity is increasing at all levels, wealth for middle and low income families has been stagnant for decades, while the top earners have exploded in their wealth.
Basically, each of us in our own lives should seek to be the best we can be. But we should also realize the limits of our individual powers and seek to collaborate and organize to achieve more than we can alone. And we shouldn't care just about our own personal well being, about climbing up to be the next Jeff Bezos, but about the well being and success of everyone around us. You can't build a cathedral alone, but you can inspire many people to build one with you.
I think we both agree there are bonds of slavery on society, and we both agree that there are both mental bonds, and institutional bonds, and that these different types of chains require different methods of attack to free oneself (or one's group) from such. For the mental bonds, I believe an adjustment of perspective is all that's needed to free myself, and for the systemic bonds, I think you believe that collective action and organizing is how groups free themselves. I think we simply differ in thinking the degree of importance and effect of each of these. I think the mental bonds are more prevalent, and I believe you feel the systemic bonds are.
Not that it's really important that we agree, or not, but it's nice to draw the outlines clearly I think. And we can both be right, I believe, as there are different situations where mental or systemic bonds are more prevalent, not that "both right" is the most important thing either. I think it's just important that each of us enjoys the beliefs we choose to have.
I also feel that collective action and "asking the system" to change is a position of powerlessnes, and futility. Perhaps you feel the same way about trying to adjust your perspective, in order to free yourself.
The final things I'll say about all this is: 1) I want no part in the social-political "battles" of this age. The ideas in these battles are not my ideas, and I don't really understand them (not the ones that I speak of here, but the majority of the ideas in currency in the "culture wars") even as I watch myself partaking in that discourse and using the language of it, and I don't want to become an instrument of the will of whoever's ideas these are. And 2) I think privilege, in its common contemporary usage, is a made-up, woolly concept that muddies the waters and is not a useful lens to address either mental nor institutional bonds.
The reasons are, first because privilege lumps together unrelated things: advantages, and special rights and immunities, granted or available to only some. If I have special rights and immunities over others, that's the definition of unfair. It's a real thing, like diplomatic privilege, but it's rare on the whole. Advantage is much more common, like money, genetics, country, family. I am advantaged, but I'm not privileged. But such a distinction and nuance has become verboten in the current fascist doublethink speech controlled discourse. The term privilege as used lumps together these distinct things. Second, "privilege" is a way to pretend someone is your enemy and justify attacking them, by conflating whatever advantages they may have been given or have earned, with the made up concept of them having special rights and immunities over others. And if one is so independent to "resist" this "group judgement" you, the "tolerant and inclusive" group decries you are "privilege blind", and therefor doubly guilty. So in its common usage, it's a made up concept, that has no basis in reality, and is simply abused, in the vein of terrorism, to create enemies and spread fear and shame. Third, privilege elides over the importance of personal responsibility, and captivates people with the compelling, but false, fantasy that "it's never your fault", which traps people in a powerless cycle of fake victimhood, learned helplessness and hostility towards others acted out via blame displacement. It teaches people that the way to deal with their frustrations is to blame someone else, instead of reflecting and creating improvements. This is such an addictive thing to do, it is misused. Of course, "privilege" is not the only tool in the arsenal of social control that contributes to these maladies, but it is one of them. In short, I denounce "the contemporary concept of privilege" as part of the mental enslavement of people that traps them, under the guise of freeing them.
I want to share more of my story. I'm advantaged, but not privileged. Some of those advantages I earned (most, these days), for example the experiences I've given myself that were broader than my upbringing, and my skills and critical thinking abilities, and some were given to me, for example, I came from a rich background, which is an advantage, because even tho I earned scholarships to school and college, my parents could pay, and I never had a lack of money or shelter, until my early 20s, when, deciding that my advantaged background was also a disadvantage (rich family was also abusive, comfortable life was also narrow: completely heterosexual all boys school, life in the suburbs in a Western country, and so on), I gave myself all types of new experiences over many years that were broader that where I came from, because I knew there was more to the world, and I knew I wanted to be more, than where I came from. And I wanted to make sure that what I was choosing, or wasn't, was not due to the conditioning of my narrow upbringing, but was authentically me. So for me, it wasn't only about what I was given, it was what I chose to do with it, with which I created the life I wanted. I followed the mantra, "follow my heart", and "use what I have to get what I want," and figured out ways to travel and live overseas, even tho my parents didn't support that. After years of trying to get them to "understand" me, at some point in my mid-20s I simply realized that my parents were not "in my way", that the only thing stopping me from doing the life I wanted was myself, and that (if I cared, or conceptually if one were to honor the idea of the best wishes of "good parents") then the best way to honor my parents was to do what would make myself happy, and be truly fulfilling, because no matter what they might say, why would they really want anything else for me? And if they did want me to simply only suffer as they felt they had themselves, then why should I care what they think? So, either way, I could free myself of this one, small, but for a time, very significant bond, by adjusting my perspective.
My parents, my school, even my peers were always focused on money, getting a job, a career, getting married, all of the normal things (even, bizarrely, as they tried to get me to stop computer programming because they saw it as a "waste of time"). I just thought, I don't want to be stuck in one path, and it scared me I think to see everyone of my peers enthusiastically (leap off that cliff) go down that road. And the more "alternative" people I came across in my journey I could never felt really aligned (as interesting and valuable as there company was to me) because they seemed too crazy, or too far gone, and I knew I wasn't like that, either.
I wanted to know how could I ever decide what I was going to do with my life, my one valuable life, if I didn't understand myself and didn't understand the world? So I set out to understand my own limits, and the limits of the world, and I did that, and then figured out what I wanted to do (at least to a first approximation, or for this stage in my life). And even through the long years since my mid-20s I've held true to my vision of following the life I want to do, and the biggest lesson I've had is, "always back yourself and trust your instincts and stand up for that." Even tho I learned that lesson early on, it's been the times where I have not done so, that have been most painful to me. Sure, there's been many others things I've had to learn, very important, but that has been one, central theme. Follow the path I want for myself. No matter what. And tell my own story, don't let anyone tell it for me.
I'm already pretty successful relative to my peers.
He might be a billionaire instead of a millionaire because he "made personal choices" but his first million is much better explained by his handouts than by personal choices. "Personal choices" is such vague shallow and useless advice, it only tells me that he was smart enough not to blow it all on cocain.
They only water I can glean from this rock of a comment is that I should have chosen to be born in his family instead of mine.
About personal responsibility and choices, if you don't believe that then that's not something you can benefit from.
I'm not giving you advice, it's your path not mine, and I don't want the karma nor responsibility for affecting yours, I'm simply sharing my feelings about these things. If it inspires you or if helpful, that's good. If not, still good for me, and you still have the way you like anyway. So there's good their for you, either way, i think.
One last comment i thought of it i think sometimes if you have a very specific idea of what you need to get, you don't see the value in other gifts that show up along your way.
It would be completely idiotic if someone beat me in a marathon by starting on the last mile and then I look at that then say to myself "hmmm, I guess that guy just runs really fast."
I see that's your perspective, and i also feel glad for you that you hold it confidently, because that must make things easier for you.
I'm not telling you how you should think or feel about this. Just trying to offer and share my own perspective.
I don't want to challenge your ease. I just thought this different perspective could make things easier for you, and now i see you don't want that. That's okay. At least you have the way you like.
For other people reading here i will give a reply to what this person said to share how i feel about it.
I can't glean any meaning or value from your paragraphs of rambling about feelings.
What you find there is what you bring to it. What you make it mean, and any value you get from your interpretation is your responsibility. I see now that this person cannot benefit from this because to them these comments are ramblings, without meaning, nor value.
I think they just don't want to believe it, because they already have the way they like, they don't want to hear something different, so they choose to see it as without meaning and value them, and maybe pretend it's without meaning, or value for others.
For me these ideas are very meaningful and valuable. For this person, zero meaning and value. That's okay. Everyone likes and chooses different things.
"Jeff Bezos received massive handouts" is not a feeling or a personal choice. It's a fact.
It's both. The fact is he received help. The magnitude ( the meaning and significance of ) of that help is a subjective feeling and interpretation that this person chooses to make about it.
you can observe the extent to which the subjective feeling and chosen interpretation distorts the fact by the subsequent example this person gives
It would be completely idiotic if someone beat me in a marathon by starting on the last mile and then I look at that then say to myself "hmmm, I guess that guy just runs really fast."
Here we have a loose analogy being made between 300,000 loan from parents and 100 billion dollar fortune and 25.2 miles out of 26.2 miles.
So one measure of the objective significance of the fact is 300,000 / 1 billion which is three parts in a million. but a analogous measure of the significance of the subjective interpretation and chosen feeling is 25.2 / 26.2, which is 96 parts out of 100. Comparing these two ratios you can find the subjective feeling and chosen interpretation is around 320,000 times more important than the objective fact to this person. I think this is interesting, a little sad, and a little funny that, while someone pretends to exist only in a fact-based reality, they allocate 320,000 times more importance to interpretations and feelings than to the facts. but I think this is a natural part of being human because our emotions and chosen interpretations are extremely important to us and not just in a distortion sense but they are what help guide us I think it's useful and important to acknowledge that. And I do believe it can be harmful to deny that but I think in this case the person genuinely seems happy and safe in his belief and that's its own kind of utility.
I'm not saying that what warehouse workers are being paid now is "fair" or "reasonable", but I do think that trying to establish some fixed ratio between what a warehouse worker makes and what Jeff Bezos makes is sort of a silly exercise. Additionally, if you think that comp shouldn't reflect value added to an organization, then I would be interested in hearing what you think it should be based on.
From the original comment:
> taxing the top ~1% is to simply bring their wealth more in line with their contributions
The comment above yours is just pointing out that Bezos may contribute more, which would be an explanation for Bezos' outsize wealth. Whether it's true or not that Bezos contributes more is subjective, of course.
> It’s not healthy for society to have Bezos level wealth in one person.
That's an entirely different point unrelated to the "contribution" question/attribute.
If we assume that it's illegitimate for someone to prosper that much behind growth and optimism that growth will continue (ie he didn't sell his stock), then the legitimacy of the net worth of every single direct or indirect (eg via ETFs) investor in Amazon, every single indirect beneficiary of investments in Amazon (eg recipients of pensions whose funds hold Amazon), and every single employee with an equity stake needs to also be questioned.
Sure there are some differences here such as stock options, but even if we divided Bezos's net worth by 2 or 3 to account for this I don't think it would make much of a difference.
My only point is when you're talking about his growth in wealth, you're always de facto talking about his stock holdings and their growth and the idea of objective compensation goes out the window. In fact, even if you're talking about straight compensation, it still is part of the discussion because clearly in this case, he is willing to take a paltry salary because he is benefiting from massive stock value growth.
As for this point:
>If we assume that Amazon is fairly valued and that Jeff Bezos's holdings of Amazon are in line with his contributions
He is not being 'compensated' via stock nor is the total amount of stock he holds fluctuating based some sort of objective analysis of his contribution. He could contribute nothing and retire and still hold the same amount. So I don't know how you can assume that.
Still, one way to go about this is to assume that workers and employers are rational economic agents and look at their incentives and bargaining power. Obviously, an employer will never employ anyone for more money than they believe that employee will contribute to the company (assuming no nepotism, fraud, corruption etc). However, an employee may well accept to work for less money than they are actually contributing, since they have ~0 visibility into this number, and much less bargaining power than the company, especially at the lower end.
So, in for a large company without powerful unions, we can virtually guarantee that employees are each receiving less money than they are actually contributing - with shareholders correspondingly receiving more money from the profits accrued. Additionally, shareholders also have more money based on how over-valued a company's stock is, which employees gain nothing from.
Now, the real question is of course "how much more wealth are they getting from the company"? I don't have an exact answer to this question. However, one way to look at it is that Amazon has ~800k employees who at MOST could collectively own the ~20% of amazon stock on the open market, while Jeff Bezos owns ~10% of the company directly. This would mean that Jeff Bezos personally would have to contribute as much as ~400k people to the company for his contributions to be in line with the value he extracts. I just don't believe that Amazon could be where it is if it replaced ~400,000 employees with a second Jeff Bezos. Honestly, I don't believe that Amazon could be where it is if it replaced 1,000 employees with a second Jeff Bezos.
Also very important would be to ask how many of those 800k people would have similar or better payed jobs if Amazon didn't exist at all. Would there be an Amazon-shaped hole in the market, or would there actually be more economic activity if instead of one giant corporation there would be thousands of smaller ones? I believe the second is more likely to be true.
In any case, high comp for executives would not be such an issue if money didn't translate so fluidly to political power. If wild success just meant cushy living, you might not see so much blowback, but when profits translate to power which translates to using that power to shield your profits, then claims about a rigged game are not so crazy.
its not a question of "fair" or "reasonable". such jobs shouldnt exist. i come from the side of ag jobs and there are a lot of repetitive manual jobs that should simply be automated.
in the place of low paying jobs, new higher wage jobs should be created. eventually, with more people being skilled and having good earning potential, the number of work hours will also come down leaving people to do other things than just work 40 hours/day and wasting 2 hours in commute.
this is how we should live. we should live our lives and work a little bit to support that life style. life shouldnt be drudgery where work is how we survive. creating high value items and high wages with robots and automation taking care of menial tasks will also bring out the creativity and potential of human beings. there will always be those who will fall through the cracks and thats when the social net should catch them.
current system is the expectation of the social net to catch everyone on a low wage. for example, you cant increase wages for ag. it would mean cost of food would go up. so we end up making cheap food, cutting corners, having a low wage worker class and then subsidising them through welfare paid through our taxes. its messy and complicated and inefficient.
my fav example is that of automobiles replacing horse carriages as the preferred urban transport system. it erased all the jobs like the guy who drove the carriage, the kid who picked up the horse poop on the streets, the stablemen, the horse groomers..the farriers...i mean..how many people want to take up equine hoof care as a profession these days. all those jobs. gone. in its place, came a new set of jobs..the factory worker, the mechanic, the gas station owner (and with it 711)...not to mention the sweet relief for the poor overworked horses. and our lives are better.
of course, the flip side is the pollution, dependence on fossil fuels, exponential population growth ..but we grow by leaps and bounds. and we fix our missteps as we move along. but some jobs..it is inevitable that they will disappear. they have to. or we will become stagnant.
that amazon doesnt give out as much dividends and ploughs back all the profits to create new companies and new jobs shows that jeff bezos is more socialist than any self declared socialist. its going to back as wages! and benefits of society are for everyone. if this isnt more than fair, i dont know what is...if the wealth redistribution people ever lived in any other country other than california(i wouldnt include the rest of the usa), they would realise how socially responsible and beneficial ca's billionaires have been to california by contributing to not just california but to the rest of the world. if anyone is 45 or above, they'd know how it was in the 80s and early 90s. if anyone has lived anywhere else and shelled out double digit VAT, they'd know that the europeon mixed economies and social welfare states place a higher tax burden on the middle class for far lesser quality of life materially than in california.
i wish i can air drop the proponents of 'eat the rich' into any one of the dozen countries..not even third world countries..for about 3 months. they'd realise how good we have it here in CA. or rather..how good we have had it...all that is going to go.
it's ironic that the same people crying for blood and redistribution are the ones fleeing to tax free or low tax states. thanks for nothing.
Not to mention, at the rate people's productivity has gone up, we should probably be working 3 or 4 day weeks at most, or earning almost double our wages. Instead, all of this extra productivity has been pocketed by Jeff Bezos and his ilk.
> Jeff Bezos is worth more than his warehouse workers because he creates jobs for the workers to survive. if the warehouse workers were worth the same, they would have come up with AMZN.
First of all, I didn't say he wasn't worth more to the company than 1 warehouse worker - of course he is. Is he worth more than all the warehouse and IT and sales workers combined? No. And please don't attribute to personal worth what is mostly a product of good luck - the fact that Jeff Bezos's move from books to everything else happened to be wildly successful doesn't mean it was a guaranteed success or that no one else could have done it. And after it started snowballing, pretty much anyone could have run Amazon and it would have still become a big success - especially anyone who doesn't care about the welfare of their workers, willing to cut corners, willing to extract massive subsidies from the state more or less directly (food stamps, the Amazon HQ bidding), willing to use their position and information to destroy their competitors, and so on.
If Amazon didn't exist, it would have been replaced by a thousand other smaller enterprises that would have hired more people. Centralization and concentration of wealth and power are always a net negative for everyone who isn't very near the top of that concentration.
Why do you want to take away decision-making power from people who know how to make [a lot of] money?
Wealth taxes (if they can be enforced, which is a significant problem) are especially powerful in this area, as they reduce the incentive for rent seeking behavior - it stops people from simply sitting on their accumulated wealth, at least when it's producing less than the taxed amount for them.
I don’t see in what universe a wealth tax could be effective, given that people can simply move. Wouldn’t it just cause large-scale capital flight, as it did in France?
Not literally sitting on them, but they are certainly not spending anywhere near as much of their money as someone who makes ~1M$ a year. A large part of their wealth is usually tied up in long term investments such as property or bonds, where it is safe but not productive.
And as I said, enforcement is a real problem, capital flight being a possible consequence. I don't know exactly what the solution is, but surely there is some better balance to be struck than today. Especially if the US government wanted to - they have enough financial and diplomatic power to enforce this type of tax almost world wide, even if California or France don't.
And for renunciation of citizenship, there's a one time liquidation tax where you pay taxes on all of your gains (so Bezos would have to pay a flat ~20% on his Amazon holdings to renounce). So the U.S. is the only country in the world that could get away with a global wealth tax on their citizens (they already tax Americans' incomes irrespective of country).
Move somewhere with even higher taxes or move somewhere with no infrastructure?
Why should people who chose to take on massive debt to go to private colleges get debt relief? Many many people made sensible decisions to go to lower cost schools, in-state schools or community colleges to avoid debt. Then there are people who chose to avoid college altogether to avoid debt. Some people religiously are forbidden from taking on debt and they oblige that by avoiding expensive schooling.
And forgiving student debt is a punch in the face to all those people. If we forgive student loan debt we HAVE TO give the same amount to people who were prudent enough to avoid that debt in the first place or else it's all a sham.
Rather than forgiveness, we should make the debt dischargeable via bankruptcy. It should've never been made non-dischargeable (though it did help reduce interest rates, and enable more people to get them, that also upped the amount schools could charge, and made it so loan officers didn't have to consider the creditworthiness of the applicant, and their plan for repayment). It should be something that passes a need bar before essentially foisting the cost on society, and bankruptcy is a mechanism for doing exactly that.
Use the money toward making public universities free, and expand the public university system, as well as trade schools. That’s really how you save all those future people tied to those tracks.
So, basically, just more trolley victims, or people that decided to risk not being hired for the best jobs that usually required at least a 4 year track-tying, because there was a trolley running people over.
If it’s actually about raising revenue, you will need to actually look lower, to the top 10% and broader middle class. But this isn’t nearly as compelling as a populist message to fund the various proposed unicorns...
Consider your example: 1mm is an average. You need about 300k/yr to be in the top 1%. So you make it a marginal tax on income above 300k? To actually collect 10% more taxes from that group, you would need strictly more than a 10% marginal tax. In practice, your marginal rate is probably 20-30%, since you would barely collect from the first ~0.5% (too close to 300k). If you have a marginal increase of 30%, you’re going to start to see significant changes in behavior, since dollars above 300k would be taxed at ~65%. (Since we’re talking about people taking in > 1mm/yr, that probably just means more retained earnings.)
The top 1% is already likely paying the full federal marginal rate on their income (or AMT at least), so even if you tried to take every last cent above 300k/yr you probably wouldn’t be able to increase revenue by more than 10%. (But this is a hypothetical only, as such a move would obviously result in less revenue than today, since no one would bother earning the dollars that are taxed at ~35% right now.)
So yeah, maybe you could squeeze all those people for a few % more revenue, but there’s not a ton more juice than that, and I’m skeptical that it would even work at all. But “taxing the 1%” is certainly not a game changer the way it’s spun.
>That’s why we need a tax on wealth. The Ultra-Millionaire Tax taxes the wealth of the richest Americans. It applies only to households with a net worth of $50 million or more—roughly the wealthiest 75,000 households, or the top 0.1%. Households would pay an annual 2% tax on every dollar of net worth above $50 million and a 6% tax on every dollar of net worth above $1 billion. Because wealth is so concentrated, this small tax on roughly 75,000 households will bring in $3.75 trillion in revenue over a ten-year period.
Are you saying this is wrong if I 'pull out my calculator' and run the numbers? The reality is it is not. Wealth is massively concentrated at the top in this country, and from a purely numbers perspective, if it were 'redistributed' it could cover a lot of basic costs that occur in this country.
I actually think our country can afford to tax the rich more than we have done, but there are a lot of people who reach the same conclusion by utterly farcical reasoning. Relatedly, there are a lot of people who rail against capitalism for making us slaves as though there is an alternate system that doesn’t impoverish and ultimately kill billions.
When they are in office, they try to string along as long as they can. Like this bill will probably not pass, but some damage could be done and the next time they have to give more ridiculous promises.
Who are you addressing? The Democrats who “demand more more more” are likely to be the same people who are fine with taxing the rich more.
If you're going to move where you live or significantly alter where you spend you time because of 0.4% of things above 30M, that's a real sign of just how far American greed has gone. The rich will drive themselves right into another french revolution unless they start realizing that taxes need to return to where they were from the 1930's-1970's. Trickle down economics is a known failure and at this point it's a question of when the pendulum will start swinging the other way.
What these people will come to terms with is a pretty age-old lesson - there are things more important than just how rich you are, and most of those are human. So long as they can maintain their lifestyle, I think many will want to stay. Needing to find 20K in a couch cushion to pay for your 5M in assets each year that you make 300K on won't be the thing that makes you move.
Of course, the rich today also have many legal shields and layers that will protect them from real french revolution violence. But I think anyone can feel the shift right now. Go on Tiktok and see just how many young people are getting real into eating the rich :)
https://www.seattletimes.com/business/rich-americans-increas...
https://variety.com/2020/dirt/moguls/ex-google-ceo-eric-schm...
If we're comparing high-tax states, I think NY is better run, and more interesting overall than California. The only think Cali has going for it is tech (relatively unimportant to the super rich), and warm weather.
I think this is probably true once someone has a career and a family, but the college part doesn't pass the sniff test for me. the "just graduated college" group is probably the most mobile slice of the overall population. especially if you chose a college away from your hometown, you are pretty likely to either move back home or pursue a career somewhere else entirely at the end. I think other folks are also more mobile than you give them credit for. unless they currently have children in school, I find people are pretty likely to move if they see an opportunity for a significantly better combo of salary/COL/taxes.
I know that the uberrich get away with dodging taxes all the time, but there are potentially high costs, like having your assets confiscated, or having to hide out in your island fortress and never return to the US lest you end up in prison.
I couldn't find what the tax was supposed to go towards but I also didn't make it beyond the paywall.
Gas tax is the most cited counterexample, but even there roads get money from general revenues.
Where is the explanation for how the money was spent, why it hasn’t paid off, and what would be different?
As far as I can tell it’s not ‘earmarked’ it’s just more tax for the general fund.
Also, Earmarks have never been trustworthy so it wouldn’t matter even if it were earmarked.
Reports here go back over 10 years, so there's plenty of data to analyze.
People want to know how their tax money is going to address society's problems. Is that so much to ask?
It doesn’t have any data about what the goals of spending that money was, not what the outcomes have been relative to those goals.
On it’s own it’s essentially useless for determining whether more or less money should go to any of those departments, let alone the state as a whole.
If California was well run, clean, and had otherwise lower tax, then .4% might be easy to ignore. But if you’re already on the fence, and not happy with things, and have been talking to real estate agents in Seattle, Austin, Miami, or Singapore, then this just the kick in the butt you might need to go through with leaving.
https://wallethub.com/edu/states-with-highest-lowest-tax-bur...
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.
That's like citing the average rent in San Francisco. Great if you've been living in a rent controlled apartment for 30 years, but irrelevant if you've moved there recently.
That cohort of Californian is dying off now, and it may be better for all involved if companies pull out and disrupt the status quo. California’s incompetence shouldn’t drag down everything.
just stopping foreign investment in california real estate will make an enormous difference. removing the prop 13 waiver for those who inherit property with the old tax rate will also help. with older people on the clock to die sometime within the next decade, ca will see a flood of plumped up property taxes when the homes change hands. but just the two measures is a good short term relief. million dollar homes are bought sight unseen and then flipped for 40-60% markup by foreign investors and people who dont even reside in california. making it a speculative rodeo circus. let the Gov. fix THAT first.
California can be California, but the problem is more than some junk ranch house is selling for $3M. It’s bullshit that the whole country is essentially held hostage by “too big to fail” California mortgages that homeowners cab just walk away from.
Property taxes are paid EVERY year. What asset do you own that you keep on paying sales tax on?
The real estate market should be stable and for free market forces to aid that, we have to make many more fundamental changes before even touching prop 13.
1. Starting with children and grandchildren who inherit property not benefiting from the prop 13.
2. Secondly, a moratorium on all foreign investments in the real estate market in California.
3. A tiered tax rate for homes left empty while enjoying prop 13 benefits. Additionally, the primary home can also be entirely tax free wrt recurring annual taxes.
California’s problem is not low taxation. Our problem is our state budget and gross mismanagement of our tax dollars by our elected representatives.
I would like to see how they manage our current levies and with more transparency before we hand over a bigger portion of our pay check. If people don’t have disposable income to spend, the economy will crumble and collapse.
An owner with an identical property should be paying identical tax.
California property values rose dramatically. NY and NJ are the worst places to own property. The whole housing depends on landlords and rent controlled apartments. Where they make money from insanely expensive utilities by strangling the poorest people. It’s a different kind of scam. Upstate NY is a whole different kind of hell with seven months of gray and knee high snow.
This is why there was no Silicon Valley in NY. This is why NY didn't create as many millionaires out of middle class and provide upward mobility to citizens as well as opportunities to immigrants. What’s NY’s GDP? What’s NY’s population? What’s NY’s total state tax revenue?
I’ll tell you. NY’s GDP is comparable to South Korea and is at 1.7 trillion. CA’s GDP is comparable to Great Britain and is at 2.97 trillion(highest in USA) NY population is 8.5 million vs CA’s 39.5 million. As an aside: our Ag income alone is in excess of 50 billion and that’s just 2% of our economy. We also have non millionaires and retired people on fixed income. NY’s taxes were around 73 billion vs CA’s total taxes were close to 450 billion.
NY is swimming in red ink due to deficits shortfalls ..2.8 billion in 3 months due to covid. Our tax income increased. I don’t think NY’s budget modeling is something for CA to emulate ..with all due respect. NY should do what it does and leave CA to Californians to vote and decide. CA is not NY. We are a country on our own. Our problems can’t be solved by anything that works for other states. The struggle is real.
Blind comparison is not useful or helpful.
Note: California’s government probably could be leaner, but there is also broad bipartisan support for more prisons, police and firefighters. The California republican party’s focus on cutting spending overlooks the deeper problem that we aren’t getting good value on a lot of the spending and budget cuts only exasperate the problem. More meaningful institutional reforms are needed.
SF is expensive for sure, but that expensive? Where is the money going to?
https://www.reuters.com/article/us-california-rent/palo-alto...
It sounds dumb but IIRC it's an attempt to have teachers and police and city employees able to live there...
I live in SoCal so I thought you would even see more homeless migrants because of the weather. However, from speaking with homeless I would say in my experience most have lived in the area for a long time, with only one beach bum guy I spoke with who actually was "fresh off the bus". Until I saw the statistics though I was also under this misconception.
Anyway, hospitality isn’t really a question of weather as Alaska for example has relatively high rate of homelessness and NYC one of the highest. Mississippi on the other hand has the lowest rate despite mild winters and significant poverty.
The stigmatization and criminalization of not paying taxes to lease a deed of property is a big problem, this planet as a whole belongs to all forms of life inhabiting it, not just the primates that choose to play that game.
This problem was working much better in the 70s and 80s when their was a national framework for it. While SF and LA's government is flawed, this blame state/city is like blaming the individual ushers when the fans run on the field after a football upset. It was more of a structural failure than a local.
From an accounting standpoint, gross money in be money out is what matters. Per capita makes sense to compare relative benefit, but realistically Montana is small potatoes on the Federal Balance sheet. Measuring per sq mile seems like some ludicrous ploy by Alaska’s senator to screw over New Jersey.
Or, the same data with a very hard to read circular bar graph visualization:
https://howmuch.net/articles/federal-budget-receipts-and-exp...
The numbers are actually pretty straightforward. "Expenditures is a broad category and covers a variety of things, including direct payments to people like Social Security, contracts for local governments, wages for federal workers and sub-contracting work."
Infrastructure costs are U shaped where extreme density is expensive, but so very low density. Mail delivery is a clear example where ultra low density just makes things more expensive.
The selective "my tax dollars would never" is anti-american
Unfortunately I don't believe something like that is practical unless it's done on a national level.
See this recent documentary by KOMO News in Seattle about their problems, which are pretty similar to Portland's, SF's, LA's and a lot of other major cities with larger homeless populations. Crime is soaring. Most are homeless due to drug addiction. Until that part is solved and they can think clearly and rationalize normally again, giving them cash will likely only fuel the problem and keep them right where they're at. And with everyone walking around with $50k cash in their pocket, because they don't have bank accounts, crime would be even more rampant as they steal it from each other.
I don't really buy that money would fuel the problem, is there any study that indicates that? They'd still be drug addicts, but they'd be more comfortable, well fed drug addicts which makes things better for everyone.
If anything I think money for a place, clean clothes, and food would make it much easier to get off drugs.
Anyway, saying it's a mental health problem is really reductive. Plenty of people with the same problems aren't homeless; some of these people can potentially dig themselves out if given a chance, most importantly a place to live.
A commonly repeated falsehood. Is totally incorrect. https://www.sfchronicle.com/bayarea/heatherknight/article/Bu...
San Francisco absolutely has a Homeless industrial complex that isn't trying to solve the problem but just keep their cash flowing.
It seems pretty fair to say that being off by 10x is "totally incorrect".
More money isn't always the answer. Maybe the answer lies elsewhere...
Getting arrested is a bit much, but what's the redeeming quality of spitting on the sidewalk?
California has problems, but individual liberties and lives are treated with respect.
city states are like sleek yachts while nations are like ferry shuttles.
So move to Texas or the south east. They clearly need an influx of ... something.
> On the one hand, the people who live there are genuinely horrible.
> So move to Texas or the south east. They clearly need an influx of ... something.
No, we don't. Please stay the fuck out of Texas. Its clear that what you really mean is, "These people don't share my radical political and social viewpoints, so they're bad."
Don't come anywhere close to our state. Californians are already fucking up Texas, starting with Austin. I've only met one California couple that were likable, and he grew up in a desert city of 317 and she grew up in Northern California.
(I say this as someone who doesn't live in Texas, and doesn't actually know. It's just my impression from afar. Add the appropriate amount of salt...)
I believe one of the differences is that in California, this would be on top of federal and state capital gains taxes, whereas in Switzerland, there is no tax on investment gains (from stock gaining value - dividends do count as income, and once ETFs with dividend-paying stocks get involved, it gets messy but TLDR you still pay the income tax on dividends).
> that's a real sign of just how far American greed has gone
Glib support of expropriation shows just how far American collectivism has gone. Naked envy and resentment hiding behind a fig leaf of public mindedness.
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 effort put into the homeless problem is also wasted, as there is no affordable housing for these people to inhabit even if their mental health issues are dealt with.
More money won’t fix these things. It will probably go into the pockets of the people who created these problems.
Note that much of what I wrote applies to the USA broadly. We are taxed not much less than Canadians, but have the infrastructure and social services of a “developing” nation.
Give me either low taxes at e.g. Costa Rica levels OR shiny infrastructure, free college for my kids, and universal healthcare.
Oh wait Costa Rica has universal health care...
We are great at setting money on fire in this country.
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.
I highly doubt it's that rather than the fact special interest are prioritized over 'effective government' in large parts due to some conservatives and neoliberals promoting the idea of corruption == freedom. When there's a thousand ways to legally bribe politicians, of course there's no incentive for effective government.
More money won’t fix a broken government any more than more revenue fixes dying companies.
IMHO one of the roots of all evil was proposition 13, which created a kind of property owners caste with a vested interest in actually making the housing problem worse. From that flows the homeless crisis, as housing costs start at upper middle class income levels anywhere in the state that also has jobs.
The problem is that proposition 13 is a hole from which it would be really hard to dig the state out from. Any politician who challenges it is voted out instantly by the landed caste as well as by the financially vulnerable younger folks who over-leveraged themselves into unaffordable homes and would be ruined if housing fell.
The infrastructure problem is also partly related to the housing problem. Nobody dares change anything because it might pop the housing bubble.
Prop 13 was a Republican thing, which shows that this isn’t just a Democrat or “too much liberalism” problem. It’s deeper than that.
Can anyone remind me what the rich when ending this racket is on the ballot?
At some point the most rational thing becomes to leave California if you are not a homeowner, or to never go there in the first place, and to geographically diversify the industries that are located there. All these things seem to be happening already. Ship may have sailed.
california is huge. if they fixed transport problem(HST failed), we have plenty of space to build homes. its not like we are the australian bush or something..these are perfectly buildable areas..its just not san francisco or the bay area or wherever there is high density and everyone want to flock to the nicest place to live as cheaply as possible.
Eliminating deductions for high-income earners while reducing tax rates on that income is revenue neutral, and generally preferable as a policy.
Many people, especially at HN for some reason, don’t realize that the Tax Reform Act of 1986 made tax rates more transparent which is why the “sticker rate” was lower.
Interestingly, the former tax rates often times screwed the middle class much more, because they couldn’t afford an accountant and/or engage in the wide range of financial maneuvers that could substantially reduce one’s tax burden.
No higher earner ever paid sticker price tax rates when they were that high.
Source: My mother. She has been a tax accountant since the 70s. The Tax Reform Act changed the field considerably.
https://turbotax.intuit.com/tax-tips/small-business-taxes/is...
It's not because of a .4. As you said, barely anyone will pay it. And still people are leaving.
It's because it's now a fact:
That California politicians are unable to spend wisely.
That California politicians have great appetite for raising taxes, and inventing new ones.
So it's not a .4 that drives people out. It's because they know what's next.
It's good for Californians to enforce their values. They'll keep their country unique, while the rest of the world homogenizes into a capitalist dystopia.
Confiscationist: “he’s attacking me!”
Hatred towards the ultra-rich is not based in jealousy but in a moral stance. The argument is not "I want your 30M" it is that "people having this much wealth is bad for all of society".
See: https://www.nytimes.com/2019/02/06/opinion/abolish-billionai...
There's much debate to be had over where that line of "too much wealth that it can't possibly be moral" is, but this is where the cultural conversation is. You're missing the point if you think it's jealousy.
As an example, I never plan to have more than about 2M (in today's dollars) of personal wealth. I'm not supporting this tax because I want the 30M, I'm supporting it because I think it may have positive effects on reigning in the human instinct for greed by aligning societal incentives with personal ones.
I'm trying to keep this narrow as I'm not trying to claim I'm correct that this specific iteration of the tax will work, or even of the form, but hopefully my point about the targeted issue is clear!
This idea that poor people need to shut up and stop complaining because "you have TikTok!" when there are tens of millions of people who don't know where their next meal will come from is, frankly, sickening to me.
I don't understand your perspective at all, and I don't know how you can look at the lives of the millions of people in the in the richest country in the world who can't afford medicine, food, safe housing, good education and say that "they should stop being so jealous."
Please, please change my mind. Tell me how your point makes any kind of moral sense.
"Eat the rich" is not about jealousy, as the parent comment explained, and as the replies all immediately ignored.
"Wealthy people create good things, so why are you mad at wealthy people" is a phenomenally backwards way of looking at things. People who create good things often become wealthy in our capitalist society. That doesn't mean that the accumulation of literal mind-boggling generational wealth is somehow a good and natural thing.
I am so tired of this idea that the natural goal for everyone in the U.S. should be to become a billionaire. If you wanna get radical about it, in my opinion there should not be billionaires. I think the accumulation of that much wealth is inherently immoral. No one person could ever, ever, ever spend that money on themselves, so why should it be theirs?
He's just highlighting a fact of life.
You can't have people starving next to people having 7 course meals.
I can't complain about my financial situation and this is precisely why I would support a fairer redistribution. I'm willing to sacrifice a bit so that others have a decent life, too. Because otherwise you can step on others only for so much, and at some point losing your possessions is the least of your concerns.
If you're a true conservative (not in the US sense of the term), you should understand this. Heck, Bismark, the grandfather of conservatives understood this.
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.
Sorry, but this stance is outright ignorant. What do you mean return to society ? His wealth is Amazon, the company, dozens of warehouses and an incredible logistics chain.
His wealth currently provides a pretty damn good service to society, in the form of being able to get items delivered fairly quickly and contact-less in the time of a pandemic.
Are you proposing we take his Amazon holdings after his death and give every person in the county a fractional share? Or however many shares it comes out to?
That's certainly a possibility, but the realistic outcome of that is that most people try to sell their shares for cash right away, thereby crashing the price, and most shares ending up in institutional investment banks and funds within the first year.
I'm not against a stronger estate tax either, but you have to be real careful when you're trying to divvy up massive amounts of wealth on a short time scale and think of the second order effects.
That is not an easy question to answer. The approach you suggested is certainly one that could be considered. You mention that most people would sell those shares for cash.. well that is cash in their hands then. That is money they didn't have before that they now have, that they can then spend on goods and services correct? Is it not redistribution of the wealth of the deceased within society?
It sounds like you agree with the principle, but are worried about the implementation. I would likely consider myself to be in the same boat. However, I am not even seeing any public conversation about it, or an attempt to move in that direction. I think the conversation should be
"This is what we want to do, this is fair wealth redistribution.. now let us come up with ideas on how we can make this work".
Because if sold quickly, it will crash the price of shares. So instead of a share being worth $3000 like it is now, it could cause a short term event where the people that need cash the most would only be able to get $100 for a share, which will get swooped by people who have disposable income to blow on investments.
It would just re-consolidate the wealth in the hands of wealthy people.
Sure, that's probably somewhat better than having it in the hands of 1 person, e.g Bezos, but is it better than other alternatives? Like just giving people stimulus checks in cash?
the kind of A type personality who is a wealth creator..by luck or intent..is likely uber A type that will not submit to dictatorship by legislation. if Jack Dorsey was forced to pay more taxes, he'd probably leave CA for Austin too. (twitter was in SF only for the time they have the tax break. right after it elapsed..coinciding with the covid SAH order, Jack was more vocal about going 100% remote..but the plan to move out of SF was always there even before pre-covid).
A type personalities like to follow rules because it makes it easier to compete in the game. because when you have rules for the game, it means everyone who is playing with you also acknowledge the rules of the game. there will be less conflict, more order and they thrive in such environments because it offer sufficient stability to focus on their goals.
they also want to be recognised and feted. some humbly and others crave it openly. even those who dont realise it enjoy it. california's environment will no longer foster what it did before.
have you ever been pickpocketed? have you ever given money to charity? which feels better? we are still pleasure seeking, rationalising apes. we like to say the words but we will still act with our ape instincts.
california should eliminate ALL taxes. and institute a flat consumption tax. and stop their dirty politics of turning their people against each other. inequalities exist for a reason. i have seen beggars in india with one limb and living in a shack with three children boiling pebbles for soup who are happier than millionaires in california.
We've got yachting communities in the US where some of the natives are surviving off of food banks and charity too because of high taxes, and they're still happy compared to the perceived grumpiness of California billionaires.
So i guess it's all relative, extreme inequality can be so unfair.
There are essentially 4 ways to spend money:
1) You can spend your own money on yourself.
2) You can spend your own money on someone else.
3) You can spend somebody else’s money on yourself.
4) You can spend somebody else’s money on somebody else.
All this is not to say that inheritance and wealth taxes should not be collected. I think they should and should be done to help fund the essential functions of government, but I think dialing that percentage up to a 100% of someone's wealth when they die would be a mistake.
What a bullshit idea. Different people start with different advantages in life. Some with wealth, some with looks, some with none. In your bid to make an equal society, will you throw acid on attractive people so they become less attractive?
Attractive people, men and women have a significantly higher advantage in life, maybe call it an asset. Looks are an asset.
Wealth tax is a tax on your fucking assets. You gonna tax looks too?
If I consume less, I should pay less tax. A tax on wealth is a tax on hardwork and savings. People should be rewarded for spending wisely, not penalized.
Once you have a solution for other inherent advantages in life apart from money, and how to account for them, come back.
What makes you so sure of that? Texas has a huge middle and working class. If asked I bet majority of Texans wouldn’t mind taxing their upper class. I think it is only a matter of time before politician is able to win over this vote share by targeting the state’s richest for taxation.
You could kill SV and create five more.
The most likely thing isn't five more valleys, it's that the valley gets { Texas, Boston, Utah, Minnesota, DC Metro, ..}-ized and there is nothing like it again.
* (I _hate_ "entrepreneur"; I've founded and exited a company but as a term it is not in-line at all with the freewheeling, let's-do-this, let's-do-it-better-than-anyone way people who drove the valley in the 70s and 80s thought of themselves. The rise of "entrepreneur" as the way of thinking about founders correlates well, imho, with the decline of the valley as the center of technology.)
[1] https://en.wikipedia.org/wiki/Kansas_experiment#Jobs_and_gro...
California is our state.
I wasn’t being sarcastic with my previous comment
The end of Silicon Valley’s dominance could have come much sooner had China continued its trend of opening up pre-Winnie the Poo’s reign, but that threat is gone for now. China is crippled under a dictator again
> Bill No. 2088 would have created a new annual tax of 0.4% on individuals with worldwide annual wealth over $30 million;
The people who would actually be subject to kind of tax would not, in an actual monetary sense, be adversely affected by this kind of tax, and we're really falling back on to crying BUT IT'S THE PRINCIPLE OF THE THING. And, fine, but also ironic -- after all, that's also the rationale for imposing the tax.
You might be interested in this nice lottery the state also offers. Some call it a tax for those who are bad at math.
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.
$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.
This is like the conversation over signing NDAs, where one party pressures the other by saying it doesn’t matter...
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.
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.
The way I see it, it is small for the taxpayer. It is not insignificant for the state.
Personally, I don't own any land and I'd be pretty happy if we stripped property tax from local government and made one uniform federal property tax set somewhere between five percent and ten percent of the market value of the property annually with the goal that you will pay about the sticker price of the property in taxes every ten or so years. In return, the state will grant a housing allowance to every eligible resident over the age of eighteen which covers two times the cost of a modest two bedroom somewhere in the US. It won't be enough for a two bedroom in mid-town Manhattan but we will have guidelines that enable you to live somewhere habitable (access to decent road/transit options, running drinking water and sewage, electricity, reliable wired Internet access).
No allowance is available to or for anyone under the age of eighteen. No provision shall be made for regional differences in cost of living. No exemption shall be made with respect to tax-exempt status or any other reason. All agreements made with local governments (like the ones corporations like Walmart make to not pay any property tax for a hundred years or something) will not affect the property tax they pay under this new tax regime.
If we implement this and close income tax loopholes, we won't need to have a wealth tax. We will also not need to vilify corrupt officials in the CCP government in mainland China and other investors for "parking" their money in empty properties in the west and driving up the cost of real estate. We will instead thank them for their contribution to our communities through property taxes.
The most important thing is there should be no loopholes in tax policy. I really think most people in the US will agree that we shouldn't be driving policy issues through tax credits/deductions. It makes no sense to me to give tax credits or deductions for buying a house, selling a car, having a child, saving money in a health saving account, investing money for retirement, or donating to charity. All credits and deductions (going forward) in personal income tax should go away forever. All of this is basically a human shield for the wealthy to hide their tax loopholes.
Liberal politics turn everyplace into a disaster. CA was at a high bar so it is taking a little longer.
a.k.a. the Slippery Slope.
You do know that the US taxes its citizens living abroad, right? I know someone who was born in the US, moved back to their home country at the ripe old age of 1, and chose to keep his citizenship when he turned 18, thinking that an additional passport won't hurt. Whoops! When he started making money, suddenly the taxman came calling! Even though he had not set foot in the US for 20 years!
Libya I think. Nope, sorry, even worse: Eritrea [1]
[1] https://www.taxesforexpats.com/expat-tax-advice/Citizenship-...
Federal tax. US citizens living abroad can still vote in federal elections. People who haven't lived in California for ten years can not vote in California elections.
This would be taxation without representation. If you're an American, you probably were educated on the proper procedure for dealing with that.
People who haven't lived in California for one year can't vote in elections. So why the additional taxes for the next 9 years??
This is taken from www.irs.gov
This kind of thing just looks american to me.
That’s scary.
- Cali has concentrates most of the entrepreneurship... of the entire world for the next century, so a bit of decentralization would be a trickle-down equivalent,
- There is already an exode to Texas,
- This rule will make people move,
- And also cancel all their meetings in Cali, to avoid reaching anywhere close to the 2 months per year threshold.
No, you fix it. Law is code, and needs tuning.
When people as so inclined to give up on first failing, then I feel it says more about their underlying worldview than it does about what's possible in the world.
Entee is just outlining why this approach probably won't work, not saying we shouldn't adjust laws at all to serve all people. TBH, I think your comment says more about your worldview than his.
> Thing is we’ve done the experiment and it doesn’t work.
My main reaction was discomfort with one observation of a legislative failure being used to advocate discarding a hypothesis * shrug *
EDIT: But thanks for reply to my lazy and poorly framed comment!
Meh, as a French person, the number of people who did this is pretty low. People hid their assets sure, but the FTB is a bit better at this than the fisc is ;-)
Put another way, the more complicated the tax, the easier it is to find loopholes. It’s basically impossible to write a simple wealth tax. If you do, you end up capturing people who shouldn’t be captured (for example a founder with illiquid stock and purely paper wealth). I’m actually all for taxing income pretty heavily especially in a progressive manner. Better yet, tax consumption. I think a luxury consumption tax, especially one that penalizes things like expensive cars, jets, boats, and similar would be a more effective way to tax the rich.
Couldn't they just limit the amount you can emigrate from the country with.
So if you emigrate, you can only take a maximum of, say, €10 mill.
i.e. earn it in France, using French laws, a French education and French infrastructure, it stays in France.
Obviously it clashes with EU free movement, but basically the problem seems to be we can't tax the rich because they take advantage of globalism to move their money around.
Isn't the solution to stop them moving it, rather than giving up?
The problem is that different places have different values and policies and compete with each other? The problem is that people have the audacity to disagree with governments and seek out different ways of living? Sorry but any proposal that disincentivizes or punishes free movement is atrocious and totalitarian. And I mean that literally.
Is a tiny distillation of one of the most difficult problems facing legislators intending to mitigate wealth inequality across their society: if the rich get upset, they can just take their toys and leave.
This is, from the perspective of legislative generations, a very new problem that has crystallized in the past 40 years with the expansion and standardization of international trade law.
Hardly a comparison. Can't do an easy commute to the office with that. Most people with that wealth won't burn the money on uprooting their companies.
I find that a hard statement to square with the founding principles of American culture. The USA was a country that declared independence and fought a war over taxation. The colonies as a whole were a magnet for opportunistic pioneers -- in fact, for much of history, "opportunistic pioneer" (for better or worse) was and is what people think of when they think of American.
So while you're correct that it is a certain kind of greed and self-interest, where I can't understand what you're trying to say is "how far X has gone." What does how far mean? The greed has been at this level since nation's conception. And ostensibly, it was the whole /point/ of the nation.
I would say this isn't any different than any other greed at any other place or time. It's simply a cost-benefit tradeoff decision. If people perceive that being in California makes more money than the wealth tax costs, they will stay. If not, they will leave. There doesn't have to be any moral or principled component to this, just simple self-interest.
Also don't overlook the deterrence factor. The wealthy currently in CA may stay there if moving represents a greater overall cost. But anyone not currently in CA would have a great disincentive to never move there.
This is a bandaid over Prop 13. We should tax land more instead of having high income taxes, economists agree the land value tax is the most efficient tax.
https://www.mcsweeneys.net/articles/i-will-do-anything-to-en...
San Francisco has a city budget larger than most other countries. This election, it voted to pass all nine measures for new taxes!
https://sfelections.sfgov.org/november-3-2020-election-resul...
The difference, however, is that today's rich people can easily move their residence, and with remote-work; maybe their companies.
In the old times, it was not quite easy to move to another country. I can imagine the difficulties (selling your assets, taking your fortune, figuring out the new kingdom, wars and instability, etc...). This is no longer an issue with city-states like Dubai or Panama; and the fact that your wealth is floating online on some stocks, banks, bitcoin, derivatives, or real-estate scattered around the world.
This doesn't concern the average joe, however. Which is why he continues to carry most of the tax bill and is cash-strapped.
California issue, however, is not the rich are greedy; but that its government is corrupt and inefficient. Raising taxes doesn't help but only grow the corrupt bureaucracy.
The 99th percentile wealth vs 99th percentile taxable income suggests that many very wealthy people are making lower returns in fact.
If people are generating those returns, however, there is no need for a wealth tax: the returns are already taxed (and could be taxed at a higher rate without a whole new invasive tax regime).
What? Y-combinator takes in lots of people for more than 60 days and they're on track to make a lot of money given the success rate of YC startups.
>> When people are getting 5-6% returns on investments (minimum), 0.4% is still not even stopping the rich get richer effect.
How is that relevant to taxing people who dont live there?
The Dutch equivalent is 1.6% tax on wealth above €1m.
The number of Ultra High Net Worth Individuals in the Netherlands is still increasing.
CA is imposing a tax on the TOTAL wealth of a person over the limits and excluding real property.
The Dutch impose a tax on the increased value of the wealth in the year, even if it was not "realized", which is more like our Capital Gains.
So an example, if you had Stocks worth 100 million, and they increased in value to 108 million in 2020
Dutch: 108-100: 8 million taxable, you owe $128,000
CA: 108 Million, you owe $432,000
Pretty large difference
and the Dutch Model is better in some ways when your assets DROP in value, which does happen,
so if we are in recession your stocks go from 100 million to 90 million, under the Dutch Model you would not owe taxes, under the CA model you still would
Edit: just found out that in California capital gains are regarded as normal income. So you'd have to pay that 1 million already, but now you'd have to pay another additional 432k... so tax increase of 50%.
Same scenario, 100million in stocks but due to a bad economy you they are now worth 95 million
Do you believe CA should collect $380,000 from someone that already lost 5 million that year?
There is always risks in investments, it is not always gains. CA does not properly account for that IMO
Further you will not get me support income based taxation either, I find income based taxation to be more immoral and unethical than wealth based taxation. It is literally stealing a persons labor
I am a proponent of Henry George's Single-Tax System
As for losing money, yeah in that scenario it's worse. The dutch system sounds better in the regard that it only taxes gains, but of course you'd here have issues as well with volatile valuations where you have gains in one year and losses in the next.
Regarding your potential loss scenario, hypothetically if you've owned 100 million one year and then over the course of 3 years it went down to just 1 million. Wouldn't it be beneficial for society had you contributed a little piece of those 100 million to society when you still had it? Other than you just holding onto it, benefitting nobody, not even you, as you lost it :). In the scenario where your money is stable or increases in value, this is no issue.
That being said, I'm not the greatest fan of estate taxes. My main issue with them is that they basically force you to have some degree of returns otherwise your money disappears, which is IMO kinda sad as it encourages people to invest in even greedier ways. You can e.g. buy a rental property and come up with shitty reasons to evict the tenants. Or you can buy it and keep them around for as long as they live.
Further your position requires one to assume the government will inherently spend the money better than allowing a person to keep the money to invest in a business or blow it on expensive cars yachts (and yes even though things are a net good for society) , your scenario of 100million just vanishing is not realistic as people will move investments in response to losses like that. We can however look at history and see clearly that government does not always spend money wisely
Just look at this comment thread for the cognitive dissonance the surrounds government spending. People asking for CA to justify more taxation in the face of their failure of public policy are simply meet with arguments that even more money will solve the problems
You see government programs are never bad, and never fail because they are bad policy, it ALWAYS because we did not tax or spend enough, no matter how many times this pattern is repeated it is never enough. They could steal 100% of all wealth over 30 Million, and when the problems are not resolved (and they wont be) the supporters of the programs will demand more money, say taking all wealth over 20, then 10, then...
Remember the original income/wealth tax only applied to the top 3% of incomes now it applies to 50%...
Government taxation on income only ever expands, that is the big problem here.
Your taxable amount on €100,000,000 is (approximately) 1.6% of the total, not of the gain. You would pay €1,600,000.
This does replace capital gains (I'm not sure to what extent): it is presented as an assumption that you will gain a fixed amount of [edited: 5.28%].
This site[1] seems to refute your assertion
[1]https://firetheboss.eu/personal-finance/dutch-wealth-tax/
For example, the main table has a column "Tax as % of Wealth"
It may be more comparable to Norway’s wealth tax, which is 0.85% of everything above 200K€ (With some provisions for primary residence and illiquid shares IIUC, discounting these somewhat)
A Norwegian tax professional I had a chance to talk to a few months ago claimed that wealthy people were leaving Norway because of the wealth tax. Are there any Norwegians in the forum that can say more about this?
They present it in the Netherlands as if you are paying 30% "capital gains" tax on an assumed-fixed gain of 5.28%, your actual gain becoming irrelevant under this system. You also pay this earlier - annually, not at the point of realising the profit.
Overall, the Dutch total tax on wealth is still going to be considerably higher.
Another democratic agreement is that you are allowed and encouraged to own capital. (That's why it's called 'capitalism', to distinguish it from other possibilities)
Statements like that never augur well for what follows.
> Why not call it what it is, a pre-death estate tax?
Do you have a cogent objection to estate taxes? Many would consider them the fairest of all possible taxes, since your property rights - past, present, and future - evaporate at death.
> it should be done at the time of use or income generation/realization
Why? What's the rationale, besides personal benefit/preference? Taxing money in motion reduces motion, which is hardly a good thing except when the motion itself is illusory arbitrage (e.g. HFT).
> double jeopardy laws
Double jeopardy is a concept of criminal law applied to humans. It's certainly the wrong term here, and arguably the wrong concept. Even your own "time of use" standard leads to the same money being taxed multiple times. Why should it be any different when assets are held instead of exchanged (see above about money in motion)? Henry George and others have made eloquent arguments for taxing wealth - especially land - instead of income. It has been tried many places and times, generally with good results. Do you have any substantive counterargument, or just random phrases plucked from a pseudo-libertarian website?
> 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.)
But who knows who'll pay for the extortionate rents if the whole thing falls apart
California should eliminate its income tax through ballot initiative. Moving it, from the highest in the nation to zero. Thats right. Zero.
Can you imagine how awesome California would become with no income tax? Everyone would instantly get a 10% raise. The quality of everything would go up and the cost of everything would go down. Standards of living would instantly go up.
Other states provide a much higher standard of living with zero tax. California can do it too.
40 years on I was right.
How do you explain a state like Florida?
Property taxes: 2.74%
Incomes taxes: 0%
Sales and excise taxes: 3.82%Wow. That's nuts.
This is basically an act of desperation which will be wrapped under some fanciful class warfare and sadly also rife with cut outs to avoid offending specific groups. If they would clamp down on industries rife with funny money accounting, namely the music and movie industry, they might not have to go after individuals.
However people always think this will stay at certain income and wealth numbers don't fully understand who exactly is paying the bills. While it easy to point to this percentage of people paying half the money the rest is equally important.
Example, in NYC it is estimated that eighty percent of taxes is from less than twenty percent of people earning a hundred thousand per year. While skewed to the much higher end the fact is this eighty percent on income taxes is twenty two percent of the total tax revenue in the city.
Finally, all of this that is happening in California is on top of a thirteen percent marginal rate which is highest in the country being over half again as much as New York.
How many people do you think have $30M and spend >= 60 days a year in California, that do not benefit from business/property/services/educated employees in California? Very, very few.
From the bill itself: http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml...
"... percentage of days in the year such taxpayer was present"
"... the portion of a taxpayer’s wealth subject to the tax imposed by this part shall be multiplied by a fraction, the numerator of which shall be years of residence in California over the 10 last years, and the denominator of which shall be 10"
So taking a contrived example of someone most affected who visited for the briefest of 60 day visits one time in 10 years, we would have 60/365 * 1/10 * 0.4% = .006%/yr tax. That seems pretty reasonable for a CEO/movie-star/whatever who visits (most likely to earn more money based on in-state activities). Even over the ten year period this amounts to 0.06% which is TINY. For someone with $100M net worth, over ten years it would amount to $42K of state tax (note that the first $30M is not taxed).
I think most people object to the idea of taxiing people who pass through for 60 days then keep taxing them for a decade of their life to support a state doubling spending with no real improvement in infrastructure, health, education or our citizens well being.
The highest taxes in the country to support what? San Francisco for exampple, has doubled it’s budget in 10 years with the population growing only 12%. The California legislature keeps passing highly creative yet extreme anti wealth measures while massively increasing spending.
Can anyone say life in San Francisco has improved in the last decade? By any objective measure it's far worse. Not just for tech but for small business in particular- the regulation, taxes and cost of doing business in the state are oppressive.
Yet we want to enact more policies to drive out the tax base? Brilliant. The top 1% of taxpayers supports half the budget of the state. Instead of speeding this exodus up, why not enact real reform. The state needs a revolution- a massive reset in spending from ground zero- not a bunch of new taxes that force even more companies out.
E.g., are there any Constitutional barriers to one state charging income tax on someone merely passing through?
Or, e.g., could CA tax the income of someone who is no longer a resident?
What mechanisms if any proscribe that kind of money grab?
Ask yourself who owns the most guns, and you'll get your answer.
This is insane. That 1% will simply pick up and leave and the state will end up in a long expensive legal battle to collect from them all.
And then who will be left to pay for everything?
> For most taxpayers, the cost of compliance would far exceed the amount of the tax. A resident with a net worth of $31 million would be subject to a wealth tax of $4,000. The cost of an annual appraisal of each of that taxpayer’s assets could easily exceed $100,000. The state would have to hire auditors to chase people all over the world.
Not true. I just gave another reason - to offset the built-in drivers of disparity. Transfers between wealth and income (i.e. labor) always favor the wealth holder. It's the very nature of capital, part of what makes it so great but also with not-so-great consequences that must be compensated for. The problem is not the progressivity of taxation, but the fact that it's primarily on the wrong thing - income and consumption instead of wealth.
I'm not sure if a wealth tax is the answer.
Personally I'd like to see taxes on negative things. Taxes invariably have the effect of discouraging the thing taxed. Which is why taxing income sucks. Let's tax pollution, traffic congestion, advertisements, and social media. Ok, well the last two are half joking.
I'm still hopeful for a Carbon tax. I think I'd be more likely of seeing that in Saudi Arabia before the USA though with the political climate being what it is.
Get on the scale and pay your taxes!
I'm no "hope to be rich" enabler. I'm a realist who understands that if California drives away all the wealthy people, the economy and business climate will be worse, not better.
You can have your utopia where every man earns the same meager living working in the commune, I choose to live in the real world.
Thanks for the laugh.
[1]https://lao.ca.gov/reports/2019/4093/ca-geography-wealth-090...
Undoubtedly, everyone benefits from the government in ways that are hard to quantify (e.g. what percentage of Joe Random's assets is due to the stability caused by the existence of the Federal Reserve), but at the same time there is something fundamentally unsettling about policy that boils down to "regardless of why you have a lot, you have a lot, so we're going to take a lot".
Not trying to start a flame war, and I'm not advocating any particular taxing strategy, but I am trying to understand the rationale for progressive tax rates. In some ways it seems regressive tax rates are arguably 'fair' in the most objective sense, but that simply doesn't generate enough revenue, so a flat tax rate does sort of seem like a pretty good compromise, and proportional taxation seems like it helps even out benefits that are hard to quantify. But is there really a fairness argument to be made for progressive tax rates?
Long live the libertarian oligarchy.
This illustrates to me that the 1st percentile receives vastly more net income than the 2nd highest percentile (and that the stats should subdivide the 1st percentile further).
Is this really unfortunate for you? I don't think so.
That some people make a lot of money is a good thing.
The bad thing is those who make too too little money.
We can all get wealthier at the same time.
I'm a lead for a company that sends engineering teams into CA for probably 3-4 months total spread out over a year. Now we would have to totally reconsider how that will go. God forbid one of the team got sick for an extended hospital stay. Their travel costs are reimbursed, but what if they accidentally fall victim to the wealth tax (more like wealth trap), would the company be liable to cover it for a decade? How absurd does that sound.
Anecdotal story: I was born and raised in CA up to 2005 when I left for college, so was my father and mother. My entire immediate family has since left for either CO, FL or TX, and more extended family are following. We were all high net worth and have small business's or well paid STEM jobs. My uncle is about to move his entire business out of the state because the level of regulation and taxation is getting ridiculous. The other week he visited my parents in TX and marveled at how well maintained the roads were and how cheap the gas was, with no shanty towns along the freeways. The mismanagement of CA is out of control. Everyone I know that has left is so glad to have left at this point and hasn't looked back. The exodus of high net worth individuals to other states who don't think they are evil money hoarders will simply keep occurring until CA wakes with no money and a federal government refusing to bail them out.
You can't vote NO on proposition bankruptcy.
My wife and I plan to travel extensively in retirement. We have traveled a lot so far in life, but only one week here, two weeks there, limited by vacation time. When we travel in retirement, we plan to stay two to four weeks in each place we visit, away from home for months at a time. Except that if you are in your home state for less than six months plus one day, residency becomes and issue (in almost every state) and can have tax implications. Most people never have to face that situation, but I have one close acquaintance that has dealt with this issue for the last five years as a resident of Florida. He says that if the state suspects that you are skirting the edge of your residency requirements, they can request your non-specific state-based cell phone data for the calendar year, and it will be provided to the state. It won't be fine grained location data, but it will say how many days you were in that state.
If California were to ever make such a dumb move (I'm 99% sure they wont'), they are going to create tons of opportunities for nearby states as all the rich folks will move elsewhere with their capital.
Please, California, keep on taxing the goose with the golden eggs.
Politicians should be playing more Sim City.
There are 50 states, many of them nice places to work, live, and have a family. We moved to Utah from California this year and have loved it.
California is experimenting with higher state income taxes. Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming are experimenting with having none.
I think distributed work will win this decade so people will be much more mobile than before. There will be a tighter feedback loop for policy makers to learn what works and what doesn’t.
The UK has discussed the idea of a "Universal Inheritance", provided to young adults, from a dedicated sovereign wealth fund. Their proposal was that the whole thing should be funded by inheritance taxes, but I don't see why a wealth tax wouldn't be just as appropriate. California already has CalPERS and CalSTRS. https://www.independent.co.uk/voices/universal-minimum-inher...
If the motivation of a wealth tax is to decrease actual inequality, that goal might be more tangible putting cash into the hands of a 20 year old kid than being poured into some mismanaged capital project.
This already happens routinely-- look up the various cases of people who left California, and then the state came after them under the theory that they never really left. Here's a case[1] where they spent 25 years harassing a guy who moved out.
Even if you leave the country, you can be extradited since failure to pay tax is a felony. Unless you went to Russia, which doesn't extradite.
[1] https://reason.com/video/2017/10/23/gilbert-hyatts-25-year-b...
The cost of even figuring out your net worth is substantial and would still be borne by people nowhere near the threshold... in fact, in the case of this bill everyone is required to report their assets to the state. The aggregate cost just from the reporting would probably dwarf the revenue.
Regardless of your politics or your views on taxation this is plan and simple a bad law.
https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm... (Bill text)
A better option for California would be to make it a tax free haven. And institute a flat consumption tax.
I never live in CA, does not use its transportation/police/schools, why do I need pay for this state income tax shit just for remote work?
Well according to this proposed law it is over $30 million in wealth.
>How do you grantee that tomorrow they will not tax every IT worker who is staying bit longer in California?
There is no way to guarantee that a hypothetical won't happen.
Not to mention, with the government’s famous lack of efficiency and accountability, all the stolen wealth wouldn’t accomplish much. California already has an enormous public bureaucracy and has nothing to show for it. There isn’t a single public amenity or service that is any better in California than states that have lower taxes, smaller governments, and higher efficiency. Washington is a great historical comparison point for this (although the politics of WA have changed significantly in the last decade and it is turning into CA).
I’m also concerned that this is going to reduce the attractiveness of CA as well as the US more broadly for economic activity and innovation. Why would the next wave of builders trust in an environment and government that could take away what they’ve worked hard to build and earn?
California is going to be massively insolvent and in default within in a decade.
What else?(real question, not rhetorical)
Does this warrant the taxes collected + the raise?
This year the Federal Reserve bought bonds of Apple. Why?
Taxing wealth is trying to fix the system at the end point instead of fixing it at the source of the problem.
https://www.cnbc.com/2020/06/29/the-fed-is-buying-some-of-th...
For those who disagree with me, please make an argument that in the U.S. making $120k is not an "honest" living...
Where is the line? And how have we not crossed it already?
How many americans have to go bankrupt or die from medical debt?
How many people need to be evicted and live on the streets? How large do the homeless camps need to become?
How uneducated and ignorant do people need to become?
How desperate and unstable do the lives of the not-upper class have to get? How full do our prisons need to be?
How wretched do our forests and streams need to become before we change?
But you know what? This a beautiful country and it would be shame to limit yourself to one place.
This doesn't bode well for California.
Pretty sure there are enough people making low wages that would be happy to report these folks if they suspected their bosses were dodging a tax.
E.g. people who commute between NJ and NY or somehow do their work in both often have to justify to one (or both) state why they shouldn’t be taxed there.
Stiglitz has mentioned a 2% wealth tax for over $50M and 3% over $1B. https://www.cnbc.com/2020/09/17/economists-stiglitz-and-pike...
Elizabeth Warren's proposal was 2% for over $50M and 6% for over $1B https://elizabethwarren.com/plans/ultra-millionaire-tax
Bernie Sanders had a proposal that started at 1% for values over $32M, 2% for $50M-$250M, 3% for $250M-$500M, 4 percent from $500M-$1B, 5% from $1B-$2.5B, 6% for $2.5B-$5B, 7% for $5B-$10B and 8% for >$10B. https://berniesanders.com/issues/tax-extreme-wealth/
Piketty suggested phasing in much earlier and more aggressively, at 5% beginning at 2M Euros. https://www.cnbc.com/2019/09/12/billionaires-should-be-taxed...
People should save their panicked pearl-clutching for when a real wealth tax proposal comes. 0.4% almost sounds like not a serious number.
Yes, California's bill is at a state level. But then, California is larger than many countries. Is it really so inappropriate for California to consider taking even small steps towards ... well at this rate not decreasing inequality, but marginally slowing its rate of increase?
To me, the crazy part of this isn't the idea of a wealth tax, nor the fact that it includes a prorated tax for part-time residents. (If anything, it's weird that ordinarily we expect that the first 89 days per year of your involvement in any state are "free" for income purposes, but not for consumption taxes.) To me the crazy part is that we're willing to begin this conversation without first getting rid of prop 13. If the motivation is to decrease actual economic equality, how on earth do we justify this policy that allows people to pretend that their most valuable assets are worth far less than their actual value?
What does this proposal achieve for the second point??
Even if you give up US citizenship, which requires something like paying taxes on all unrealized gains and ten years of projected earnings before they let you out of the US, the feds still go after your estate for estate taxes when you die no matter how long you have been gone from the US.
And good luck getting back in for a visit after relinquishing your citizenship.
This all started with laws passed after the Dart family, wealthy for styrofoam cups, gave up their citizenship and left the US (how dare they!), see [1].
[1] https://www.latimes.com/archives/la-xpm-2008-jun-15-fi-perfi...
https://www.irs.gov/businesses/international-businesses/unit...
>And good luck getting back in for a visit after relinquishing your citizenship.
Sadly all too true. There must be a list somewhere because everyone I know who has done this has gotten fucked very hard every which way they could get fucked by the govt.
"That point was echoed in a brief by the National Taxpayers Union, which pointed to California’s threats to seize bank accounts of out-of-state companies that do not pay the tax."
https://www.azcentral.com/story/news/local/arizona/2020/02/2...
Not an abstract “rich” category anymore.
The anti-tax rants here are just the usual run-of-the-mill white-knighting for wealthy people.
It would be better to do a wealth tax at the federal level. It really isn't conceptually different from a property tax on real estate, it just applies to all wealth.