California will subpoena cellphone location records.
They’ll query records from license plate scanners around the state, searching for those new Nevada plates.
They’ll consider you a resident just for having assets in the state, leaving the burden of proof on the defendant.
It’s particularly hard for executives whose companies are headquartered in California.
That being said, the new reality of remote work could be a paradigm shift that enables a mass exodus of firms moving their headquarters out of state.
California is big, and has a lot of stuff in it people find desirable. Moving from CA is to commit to moving hundreds of miles to get to another state, which is a pretty extreme ask comparatively.
Historically CA has managed to get away with high taxes and disastrous housing policy because it was desirable; good jobs, weather, etc. With remote work it’s yet to be seen exactly where the balance of desire and cost will settle back out to.
I can assure you that if that house gets frequently robbed or has large homeless encampment of heroine users and drunks on the same street you wouldn't be saying it.
Then again...if you're from SF that's your daily life. So yeah....sweet house in the beach woot!
One percenters often have multiple houses to move to so this isn't some major obstacle.
They made everyone register all their guns.
Then they came in and took them.
(change "guns" to "assets")
I dont know how high end finance works, maybe its an already solved problem, but it seems a lot easier to define incoming income (which is already challenging) than it is to define net worth.
They take another cut when you spend it, in the form of sales tax.
Now they want another cut even if you’ve already been taxed on making money and prior to you then spending it.
New taxes are a scourge on democracy. They implement yet another confusopoly designed to hide details and trick voters. Just add a new, higher income tax and CGT bracket already.
This is true, but capital gains tax is only assessed when assets are sold. So, asset-rich individuals can acquire massive wealth, and instead of selling it, just borrow against it and sidestep any capital gains taxes. A direct tax on wealth is an attempt to change this in a way that income taxes and capital gains taxes can not, no matter the rate.
(https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml...)
Does this mean that if you have paper wealth in the form of illiquid founder shares in a startup, you'd be subject to the wealth tax? There's a nontrivial number of people that have more than "$30M" in stock in their name, but that wealth only exists on paper.
If you are a co-founder with 20% ownership of a $500M company, that's an extra $280k a year of personal taxes even if your company doesn't make it to an exit.
This could kill the startup industry.
I am, on paper, a multimillionaire from my last company because of the restricted common stock I hold. However I cannot sell those shares, and the current CEO seems determined to run the company into the ground. My actual liquid assets are just enough to cover rent for a few months and I still work for a living. A wealth tax would kill me (although thankfully my paper wealth is below the $30m threshold).
The big issue is that schools are primarily funded by property taxes, which creates a system by which the children of rich Americans get better educations than poor children, reinforcing existing economic positions.
That being said, a state level wealth tax would go a long way to smooth these things out compared to property taxes.
This funding disparity isn't the case in California, yet it sees similar outcomes in terms of educational achievement.
There are also more direct arguments for property taxes - in many places they are used to fund municipal services so its a pretty direct way of getting the people who benefit from those services to pay for them. There is also the social benefit of ususlly space is at a premium in cities, so property taxes discourage people from hoarding space they are not using.
Sorry if I perceived incorrectly, but you are making it sound as if economic system before income tax was all hunky dory and people lived satisfying comfortable lives. From what it seems, system before income tax had much worse lives (on average) than the system after income tax.
So can you please clarify if you indeed claim that pre-income tax economic system was superior? If so, any citations?
How does it end? Probably with brittle systems that are unable to survive exogenous shocks.
Rich people have most of their net worth in assets afaik.
So, even "just" 0.4% of the net worth would be quite severe. Add to that, that the stocks of certain companies are inflated atm due to corona, they would have way more "net worth" than usual. So if they have to pay taxes on the inflated price and then the price falls they are gonna lose quite a bit of money.
If they can't cover it with liquid assets they would have to sell other assets at a, probably, below market rate.
This is gonna backfire so very hard.
I wish there was a threshold of ARR that you can stay under and not have to pay the FTB fees. That would really help tiny businesses.
Every time CA’s pension funds look shaky, why not just go back to 2012 and bump the rate again for that year, but only if your income is over $99M and your surname is Zuckerberg.
I don’t condone the practice at all. I think it’s shameful behavior from the state — I remember at the time it felt pretty scurrilous that CA were targeting Zuckerberg et al, albeit quite passively.
