Hacker News Reader

Comment by daveFNbuck | Hacker News Reader

I think that's why they put in the provision that you have to keep paying the tax for 10 years after you move.

That’s why if the tax gets implemented they’re gonna move away before the tax is implemented. Imagine being a slave to a state you don’t even live in for ten years. What a load of garbage, I’ll bet any other state will refuse to enforce it.

Slaves work for no pay and cannot leave. You are suggesting a tax on (massive) wealth you already have is the same?

> Bill No. 2088 would have created a new annual tax of 0.4% on individuals with worldwide annual wealth over $30 million;

While I'm dubious about both the legality and wisdom of this proposed tax, I confess I'm having trouble seeing "paying a 0.4% tax on wealth over $30M" as being "slave to a state." Yes, metaphor, but it's a metaphor of "reducing my $50M estate to $49.92M might as well be forced servitude," and, uh, no. C'mon. Put that $50M somewhere that averages even a modest 4% annual return and you could pay the tax, draw out $600K a year (I mean, you can live on that, right? Not a hardship?), and still have another $600K left over.

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.

$50m * 0.004 = $200,000.

You might be interested in this nice lottery the state also offers. Some call it a tax for those who are bad at math.

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

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

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

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

$20M * 0.004 = $80,000

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

If it’s so small as to not be meaningful, why collect it? How could it benefit the state to have so little money? If the state professes a genuine need for such a small marginal increase in its revenue, then shouldn’t the individuals being taxed be able to make a similar case?

This is like the conversation over signing NDAs, where one party pressures the other by saying it doesn’t matter...

> If it’s so small as to not be meaningful, why collect it

You're mixing up to whom it's meaningful. Rich individuals will be unaffected, but it will benefit the state as the tax is collected from more than one person.

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

> If it’s so small as to not be meaningful, why collect it?

Well they aren't collecting it from just one person, so the number's really big on one side (in aggregate) and it's really small on the other side.

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

> If it’s so small as to not be meaningful, why collect it?

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.

Taxes are not punishment. It's not meant to impoverish individual rich people. It's meant to get some money into the state coffers which pays for the infrastructure they use.

This thread is about the marginal utility of the money for the state vs. the taxpayer.

This is the camel's nose in the tent. If this is adopted, the threshold will move down and the percentage will move up and eventually will touch everyone.

Liberal politics turn everyplace into a disaster. CA was at a high bar so it is taking a little longer.

> camel's nose in the tent

a.k.a. the Slippery Slope.

https://www.logical-fallacy.com/articles/slippery-slope/

Well, the US federal government thinks this is fine. Citizens still have to file, and often pay taxes if they move out of the country. If one renounces their citizenship they are liable for up to 10 years of exit taxes.

> Imagine being a slave to a state you don’t even live in for ten years. What a load of garbage

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!

There was another country that has the same dumb policy of taxing their citizen's passport.

Libya I think. Nope, sorry, even worse: Eritrea [1]

[1] https://www.taxesforexpats.com/expat-tax-advice/Citizenship-...

>> You do know that the US taxes its citizens living abroad, right?

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 ten years can not vote in California elections.

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??

> Do I still need to file a U.S. tax return? Yes, if you are a U.S. citizen or a resident alien living outside the United States, your worldwide income is subject to U.S. income tax, regardless of where you live.

This is taken from www.irs.gov

This kind of thing just looks american to me.

That's probably the stupidest part of it, because then you convince all the people who imagine they're going to be Elon Musk in ten years that they should leave California immediately.

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

But that has a related cause and effect. The reason these things have happened in California isn't the geography. If you drive a large fraction of the same people out and into places like Austin through excessive housing costs and high taxes, then the next Elon Musk can build it there instead. Because it's the people, not the place.

You can see why that's obviously a chicken-and-egg circumstance though.

Texas Instruments was probably not founded in California, so the center of mass could easily shift again.

Don’t be surprised if Texas (in particular Austin) adopts similar tax measures. I bet there is just as much public support for it—if not even more—then in California.

If Austin adopted it, people would just move two miles outside the city limits. And the state of Texas as a whole is not going to do that.

> The state of Texas as a whole is not going to do that.

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.

It doesn't matter the changing makeup of the state when the republicans have gerrymandered it to be unwinnable. Sure, it might go blue a few presidential elections, but for policies that actually come from the statehouse it will be blood red for the foreseeable future.

Do you know many conservatives/Republicans?

I guess socialists crave what conservatives fear. My prediction is that as Texas becomes more democratic (lower case and capital D), the conservative’s fear will be increasingly realized.

Yeah could be. I just disputed your other comment that lots of middle class people wouldn't mind taxing the rich. Whereas most of the conservatives I know are ardently against tax increases by principle even if the tax wouldn't affect them. But sure if Tx changes politically then ya.

I guess your right, I’m sort of ignoring the existence of the conservative middle class (which I believe is kind of big in Texas). However I wouldn’t be surprised if we were to witness the political left winning over this vote share in less then a generation by targeting the wealthy elite. And I think this is even more likely to happen in Texas then say California.

But if you drive a large fraction of those people out, they don't all go to Austin. Austin therefore winds up with a lower concentration of those people than Silicon Valley had. By doing this, you can kill SV without creating a new one.

That depends on how much concentration you actually need.

You could kill SV and create five more.

It's easier to destroy the Valley than to create a timeline where a new Valley evolves. It really isn't an inevitability that anything like SV exist, and in fact, there are tons of reasons why it's unlikely a new one would evolve, chief among them the hostility to individual entrepreneurs* like regulatory capture, enforceable non-competes, and so on, as well a lot of the margin and efficiencies have been driven out of the business in favor of defensible moats and network effects.

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.)

There should be efforts to to build new Silicon Valley’s. Putting all of tech’s eggs on one metro located near massive faultlines is just poor planning. There ought to be multiple redundancies.

How do you "drive" people out someplace they have no desire to live? I feel like the Kansas experiment[1] is a good example of the limits of tax policy as it relates to growth in employment and innovation.

[1] https://en.wikipedia.org/wiki/Kansas_experiment#Jobs_and_gro...

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

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

_You_ go to Idaho and Wyoming.

California is our state.

I’m sorry, but you have me confused with someone else who is fantasizing about “a California with population levels pre-Gold-Rush, pre-Dust-Bowl and pre-Silicon-Valley”.

I wasn’t being sarcastic with my previous comment

VCs prefer investing in companies in NYC and the Valley. So Paypal would have probably had to be built in one of those two markets. Once he had a successful company, I suspect he could have gone elsewhere and still received investment and convinced enough talented people to come join his projects. So I think for Elon in particular the answer is yes, but there might have only been a single other place he could have started in the USA, and we're specifically talking about Elon.

You only need a state with an Austin adopt a ban on noncompetes, or a state that currently bans noncompetes that miraculously develops an Austin. Once either happens then it’s game over for CA.

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

Strongly agreed on all points. If WA, TX or NC ban noncompetes its basically over for CA. All of these areas have some great universities, major airports and a solid tech base already.

How many people actually believe they will become the next Musk, to an extent that they are willing to move out of state in preparation to maximize their greed in the off chance they will succeed in this impossible task?

Probably a decent fraction of founders hope to reach the point where the tax would come into play. Maybe some other locale can use this to finally convince VCs and startups to cluster somewhere else.

Yeah this is a "don't live here if you plan to ever be rich" law. Fortunately that part of the law is unlikely to be constitutional.

Kind of a lot of people in the Gold Rush State. Between the dreamers of Hollywood and Silicon Valley, a lot of folks go there to become wealthy. And even if only a small fraction do, it's still more than almost anywhere else in the world.

Do you know what the "ycombinator" in this site's URL is a reference to?

Are you talking about the startup accelerator or the functional combinator used to achieve recursion without naming a function that calls it self?

How is that possibly constitutional? It seems like giving states the right to tax the wealth of residents in other states is a really bad door to open.

So if one year I spend 60 days in California, I owe the tax for the next 10 years? That seems indefensible. In fact, if they implement this, I'm pretty sure there's going to be a Supreme Court case, and IANAL, but I suspect California will lose.

The best bet of each other state is NOT to send this to SCOTUS, because then they will all benefit from an accelerated exode:

- 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.

It doesn't have to be the states filing suit. It can be the rich taxed individuals. They can buy the kind of lawyers it would take to effectively run that lawsuit.

There's zero chance that gets enforced.

Maybe. But the point is someone thought of it. And we elected that genius.

That’s scary.

Yeah, I can understand the debate for higher taxes in some cases but 60 days will make you liable for 10 years is a bad joke. This means people from other states won't even risk visiting

Would it not make more sense if the law was, move _back_ within 10 years and you need to pay the whole lot? I've seen that sort of thing in a lot of places before.

I have a feeling that portion will be struct down in court.

Ha, my cold dead hands

That sounds a bit like taxation without representation.

Reply on news.ycombinator.com