California 'Billionaire Tax' Makes Ballot Despite Opposition From Tech Moguls (theguardian.com) 295
California's proposed "billionaire tax" has gathered enough signatures to qualify for the November ballot, setting up a major fight between labor unions and some of Silicon Valley's richest figures. From the report: The California Billionaire Tax Act, colloquially known as the billionaire tax, would levy a one-time 5% tax on any California resident worth more than $1bn. The proposal is backed by the Service Employees International Union-United Healthcare Workers West as a means of funding California's strained healthcare and education programs. The proposal has become one of the state's biggest political flashpoints as it gained momentum throughout the year, with prominent billionaires, such as the Google co-founder Larry Page, making moves to cut ties with the state and Newsom vowing to block it from going to a vote. Although it has gained enough signatures for the ballot, the groups backing the measure have until June 25 to decide whether to move forward or potentially strike a deal with the state.
While unions backing the group have framed the proposal as a way of getting the ultra-rich to pay their fair share, many of the state's tech elites have condemned the tax and spent millions attempting to crush it. The Google co-founder Sergey Brin has spent $82m alone on efforts to fight the tax, while joining other Silicon Valley billionaires in declaring he will leave California if it goes through. The Palantir co-founder Peter Thiel, crypto billionaire Chris Larsen and Ring founder James Siminoff are among the other tech moguls who have made huge political donations to groups opposing the tax. California has the most billionaires out of any state, many of whom have increased their wealth in recent years amid the AI boom.
While unions backing the group have framed the proposal as a way of getting the ultra-rich to pay their fair share, many of the state's tech elites have condemned the tax and spent millions attempting to crush it. The Google co-founder Sergey Brin has spent $82m alone on efforts to fight the tax, while joining other Silicon Valley billionaires in declaring he will leave California if it goes through. The Palantir co-founder Peter Thiel, crypto billionaire Chris Larsen and Ring founder James Siminoff are among the other tech moguls who have made huge political donations to groups opposing the tax. California has the most billionaires out of any state, many of whom have increased their wealth in recent years amid the AI boom.
Oh no.... (Score:3, Funny)
Top line revenue tax needed (Score:3)
California or another state needs to put a top-line revenue tax on corporations instead of a corporate income tax.
It could be a 1% to 4% top line revenue tax.
The income tax on corporations need to be instead a top-line global revenue tax so that corporations could not jurisdiction shop to avoid taxes, have phantom expenses (one company leasing equipment from another company, both companies owned by the same parent corporation), or other paper shuffling moves to avoid taxes.
The benefit would also preclude th
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"One time" (Score:5, Insightful)
>"colloquially known as the billionaire tax, would levy a one-time 5% tax on any California resident worth more than $1bn."
If it goes through and eventually becomes law, who really believes this will be a ONE-TIME ever tax on the UNREALIZED wealth of individuals?
Re:"One time" (Score:5, Insightful)
Re:"One time" (Score:4, Insightful)
"too many" being once.
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Do they still own the buildings? The land? They can still be taxed.
American citizens working in Canada STILL pay taxes to the US government. They government will tax you no matter where you are, if they want to. Of course, that only applies to WORKING people paying INCOME taxes, because governments loooove to tax labourers, and not the people extracting profits by underpaying labourers. (That's how billionaires become billionaires. Fundamentally, they have to under-pay everyone that creates actual value in
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....then tax the homes owned by shell companies.
Two can play at that game.
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Buddy. I don't know if you know where the funding to develop the technology underpinning the internet actually came from, but it wasn't business. Similarly, by the time business got their hands on the protocols they'd already been developed, tested and iterated on. You're crowing about being responsible for technology to the people who actually built it, and we have all seen what happens when a corporation tries to build a protocol and then force others to use it. Over and over we have seen this.
We can also
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Are you a temporarily embarrassed billionaire? Won’t someone think of the poor billionaires?
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>"Are you a temporarily embarrassed billionaire?"
If I were, would I be bothering to post on Slashdot as a pass-time? But, no, I wish I had such a problem.
>"Wonâ(TM)t someone think of the poor billionaires?"
So easy to "other" them and do whatever we want to them?
But this will just drive all the highly rich right out of the State and they will take all their spending, companies, employment, holdings, other taxes, etc with them. I am all for closing loopholes, like the creation of tax-free "income
Re:"One time" (Score:5, Insightful)
So far NYC hasn't seen a mass exodus of wealthy people due to their "socialist" mayor.
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Re: "One time" (Score:3)
Pretty hilarious that people who will fight tooth and nail against the idea that sexual orientation is anything other than a choice can't seem to wrap their head around the fact that it's pretty fucking easy to choose not to be a billionaire.
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If they were so flippantly able to break their own laws then why pass the bill at all? Just tax the money anyways right if the law doesn't have to be followed?
I like paying taxes (Score:3, Interesting)
I don't like members of the Epstein class ripping me off. I do like having universal Health Care and roads and schools and trains and the military to prevent my country from being invaded and my fellow citizens and myself from being slaughtered etc etc.
I know we don't like nuance around here because we like to think like 12-year-olds because we spend way too much time
Re:I like paying taxes (Score:5, Insightful)
I like paying taxes as long as those taxes are being put back into my community instead of into some rat bastard trillionaires pocket.
Cool. If you live in California you can voluntarily pay extra money to the state. Most of that money goes to pay for Medical, not billionaires.
Virtually no one ever does that so I don't actually believe you.
I don't like members of the Epstein class ripping me off.
I'm lost. How exactly has Jensen Huang (CEO of Nvidia) ripped you off? What did he trick you into buying for more than it was worth? How did Tim Cook snooker you into buying an iPhone you didn't actually want?
You know who's ripping you off? The California government. They can force you to give them money and squander it on overpriced low income houses, trains to nowhere, and numerous other boondoggles.
I know we don't like nuance around here because we like to think like 12-year-olds because we spend way too much time on nostalgia bait but yeah there is some fucking nuance to paying taxes.
Cool. Let's have an informed conversation about how much taxes Californians pay and what we get for it. Let's start with California's budget. Do you realize the inflation-adjusted California budget has roughly doubled in the last 10 years [california...center.org] while the population has been more or less constant? I don't see us getting twice the value from Sacramento compared to 10 years ago.
But perhaps I'm blind. I don't have a reference but my understanding is a huge chunk of that came from expanding MediCal. I'm not poor so perhaps I don't see how much that benefits people. But I find it difficult to believe that many people were able to get by without aid in 2016 compared today.
I'm also at a loss how a one-time cash infusion (this tax is a one-time deal, right?) will solve a long term budget hole. Spen toding is growing on an exponential curve. Seems we need a long term answer, not a one time patch.
Let's address the "fair share" argument. Huh. What exactly might "fair" mean? I found this interesting article [itep.org], breaking out tax burden by income bracket. We see that sales and property taxes already more heavily affect lower income brackets than higher income ones. This makes some amount of sense, especially sales tax. Income taxes are already quite progressive. The overall burden is much flatter than I expected (although the fine article points out that California is fourth most progressive of all states, go figure). Perhaps there's room to just increase the income tax brackets?
(Note, I think it's pretty important to look at these figures using income after transfers. If I pay $1000 in taxes and get a $1000 MediCal subsidy, I've effectively paid no tax. I don't know if this report accounts for that.)
Every time there's a recession and the stock market drops, California suddenly has a budget hole. Every time pundits point out that most of California's revenue comes from wealthy people and it's fiscally dangerous to so heavily rely on a volatile tax source. And yet we want to tax the wealthy more, making the state's income even more precarious. Is that really a wise plan?
I'm happy to have a nuanced discussion of taxes and spending in California. "Make the rich pay their fair share" isn't nuanced. Neither is "abolish all taxes" or "cut spending by 50%". But to have a nuanced discussion, perhaps we should both know the basic facts about what taxes California collects and what it spends it on.
You don't understand society or civilization (Score:3)
You don't get to opt out of civilization. Especially in 2026. You're going to pay your dues to the club of civilization whether you like it or not. In exchange for that you will get reliable access to food and shelter and medicine and education and transportation. You get to pretend you are a big boy who does e
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What did he trick you into buying for more than it was worth?
Speaking only for myself, a 4xxx series card. Their Linux drivers used to be pretty good, now they are real bad. When I do a driver update it's about 50/50 whether they will break sleep. For once I wish I had AMD graphics.
We need a max wealth cap in America. (Score:5, Funny)
Once you hit a billion dollars, the government sends you a silver dollar plaque and taxes all future wealth over 1bn at 50%.
Once you hit 10 billion dollars, the government sends you a gold dollar plaque all future wealth over 10bn at 100%.
We'll throw in a "You won the American Dream" flag plaque.
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Once you hit a billion dollars, the government sends you a silver dollar plaque and taxes all future wealth over 1bn at 50%. Once you hit 10 billion dollars, the government sends you a gold dollar plaque all future wealth over 10bn at 100%.
That won't work. Billionaires and their lawyers are way smarter than the legislators who will draft those laws. They will be worked around. A crude hypothetical: A CEO's $21 million salary could become $1 million and an annuity that pays $1 million a year for life. At these levels a CEO normally lasts 6 years. So rather than taxing $126 million you'll tax $27 million and the former CEO will retire to a tax free stated and collect $6 million a year from annuities. Again, just something unrealistic and crude
The Rubber Hits The Road NOW. (Score:2)
It's going to be really interesting to see how this plays out. I am absolutely sure that the unwashed masses will pass this bill and implement a punitive billionaire tax. 'Tax the billionaires! Make them pay their fair share. Eat the rich.' But, will capital flight strike California like so many have claimed.
The billionaires will need to get themselves, their businesses and their money out of California before November to avoid a dramatic tax penalty. How many run and how many stay and pay will be fascinati
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It's going to be really interesting to see how this plays out.
A number of the extremely rich have reportedly already moved their official residence out of CA just in case this law passes (Brin, Page, and Zuckerberg, for example).
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The wealth tax on Brin would amount to 67%, because it goes by percentage of voting shares or percentage of ownership, whichever is greater. I assume something similar would apply to Page, who also holds Alphabet class B shares. Of course they're going to avoid that.
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But, will capital flight strike California like so many have claimed.
No. For the same reason our businesses do not leave the EU over their regulations: The potential income from remaining vastly exceeds the cost of staying and paying.
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I'm hoping that some of these unwashed masses voting for this thing are employees of Google, Apple, etc. And I want to be a fly on the wall when the boss says, "Pack up your stuff. The company is moving to Wyoming."
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Fleeing with hoarded money
I see you seem to have learned your economics watching Saturday morning cartoons [wallpapercat.com]. The wealth isn't being hoarded. It isn't even sitting around in the form of money. What will be fleeing the state is capital to support existing businesses and create new ones. Which means jobs. And future tax revenue. The state is going to lose far more in recurring revenue than it will ever see from their one time tax.
Mixed feelings (Score:3)
IMO, the right thing to do here is to have an annual 0.5% property tax that covers non-cash financial implements, with an exception for the first ten million dollars or so, with the threshold automatically adjusted annually for inflation, tied to the CPI or some other standard inflationary metric. Require companies doing business with Californians to automatically report this to the FTB. Do not require individuals to do anything unless the value of their securities exceed that threshold. Send an assessment to anyone whose securities exceed that threshold.
There are five things about my proposal that make it superior:
Just saying. I'm not going to be upset if the bill passes, but I think there are much better ways to achieve the same goal in a fashion that will have a more meaningful, more long-term impact, rather than being a quick money grab that causes a short-term boost at the expense of potentially long-term losses.
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"It won't cause people to wonder whether the government is going to decide to do it again at some arbitrary date in the future"
Wrong. The government will spend the entire 0.5% and nothing to show for it but more government employees. Then the tax will go to 1% and the budget will still be short, so...
The ability of government to spend is infinite. You should have noticed that by now.
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"It won't cause people to wonder whether the government is going to decide to do it again at some arbitrary date in the future"
Wrong. The government will spend the entire 0.5% and nothing to show for it but more government employees. Then the tax will go to 1% and the budget will still be short, so...
The ability of government to spend is infinite. You should have noticed that by now.
Fine. Target the spending like this bill does.
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Economies of scale should be lowering tax expenditure over time. Not increasing it. I expect the government funded on 0.5% of revenue 500 years from now.
If you don't believe me look up how much it costs to build a road relative to the net worth of the population over time.
In theory, yes. In practice, that is true only if the government is not having to spend more and more money to counterbalance wealth disparity, e.g with social programs to feed the poor, house the homeless, etc. And as long as it is much harder to solve that problem than to raise revenue, you can safely assume that governments will choose to raise revenue. :-)
How this will play out (Score:2)
Let us imagine for a second that you are a billionaire. You have been told by the state of California that you must surrender hundreds of millions of dollars because you are worth billions of dollars on paper and they want this money and believe they can take it from you.
Rather than pay them anything you hire lawyers at the tune of tens of millions of dollars to fight this in court for years if not a full decade.
You spend tens of millions of dollars to fund their political opponent
Reminder of how this works (Score:2)
No one can possibly think that a one-time tax like this is a good idea. Even if you want higher taxes on the wealthy surely (a) you want recurring revenue not a one-off (b) you want to actually collect the taxes not just scare the tax base out of state.
But this is the key part:
Although it has gained enough signatures for the ballot, the groups backing the measure have until June 25 to decide whether to move forward or potentially strike a deal with the state.
The way the ballot process in California works is you can propose terrible legislation, pay for signatures, then get what you want in return for withdrawing it (which you can do even after submitting signatures, which is ridiculous).
I
Tax the PACs (Score:4, Insightful)
The problem with one time income in CA (Score:4, Insightful)
In California, the government is only allowed to save a certain amount of money in "rainy day funds" per year. It MUST spend any additional funds it acquires beyond this set amount.
A few years back, California had a large budget surplus from the stock market surging and people paying taxes on their capitol gains. The state maxed out its rainy day fund contribution... and then implemented a bunch of new services with the remaining money. The following year, when the state's income was back to normal there was a budget shortfall as they could no longer afford those extra services they implemented. People were pissed that the newly implemented services were cancelled.
Everyone saw this coming... but they still did the stupid thing anyway. The laws were written to leave no choice.
If we give them this money, the politicians will use it to dig us a deep hole that we won't be able to afford to get out of.
5% on $1 Billion? Oh nooooo ... (Score:2)
California ... would levy a one-time 5% tax on any California resident worth more than $1bn.
Then they'd only be worth $950,000,000 -- oh noooo ... !
Somehow, I think they'll be fine.
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You are not thinking like a billionaire. If you have 250 billion, you would pay 12.5 billion in taxes, which is about half of what you could realistically gain in a year before taxes. Now your options are:
1. Do nothing and lose 12.5 billion
2. Do something to avoid paying 12.5 billion.
Which option would you pick?
Texas, here they come! (Score:5, Insightful)
Wealth taxes sound logical but fail in practice for reasons that are structural, not incidental.
Modern billionaire wealth is not a pool of cash but unrealized appreciation in stock, private equity, and assets held inside foundations, trusts, and holding companies that never die and never sell.
The wealth is real in terms of power and influence but does not exist in any form that is liquid, personally owned, or straightforwardly valued.
Asking someone to pay 5% annually on a private company stake or a foundation's art collection requires first agreeing what it is worth, then finding the cash to pay the bill, neither of which has a clean answer.
Europe ran this experiment for decades. Sweden, Germany, France, Austria, Finland, Denmark and others all introduced wealth taxes and most have abolished them, citing capital flight, administrative chaos, and the fundamental impossibility of consistent valuation across asset classes.
France's ISF drove thousands of wealthy residents abroad before Macron scrapped it in 2017 explicitly because it cost more than it raised. Germany's was ruled unconstitutional in 1995 on valuation grounds alone.
The deeper problem is that the effective tax rate on a correctly structured fortune is already close to zero before any wealth tax is contemplated. You borrow against your portfolio to live, generating no income.
Everything is owned by immortal entities that never trigger a realization event. The rate on zero is always zero, and a wealth tax on assets that are not personally owned, cannot be objectively valued, and cannot be liquidated without market disruption is not a revenue solution. It is a political statement.
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False. While the ballot measure does not impose an annual wealth tax, it authorizes the legislature to implement one without further voter approval. It also lets the legislature set the rate and the floor.
buying politicians instead of paying taxes (Score:2)
many of the state's tech elites have condemned the tax and spent millions attempting to crush it. The Google co-founder Sergey Brin has spent $82m alone on efforts to fight the tax, while joining other Silicon Valley billionaires in declaring he will leave California if it goes through. The Palantir co-founder Peter Thiel, crypto billionaire Chris Larsen and Ring founder James Siminoff are among the other tech moguls who have made huge political donations to groups opposing the tax.
If billionaires hate it so much, it's probably a good idea. Further, this is putting in plain sight the fact that billionaires prefer to buy politicians than to pay their taxes. These selfish assholes would literally prefer to bribe politicians than chip in for roads, schools, fire departments etc. That should tell you all you need to know about the average billionaire.
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They have no problem taking out loans on unrealized assets so if they are worth it to the banks, they can pay taxes on them.
Re:taxing unrealized gains is problematic (Score:4, Insightful)
They have no problem taking out loans on unrealized assets so if they are worth it to the banks, they can pay taxes on them.
Be careful of this kind of rhetoric.
Billionaire trickle-down-fuck-YOU-pay-for-it-pleb economics will ensure retired homeowners on a fixed income end up losing their homes, because tax the shit out of those 'urealized gains' called home equity..
Re:taxing unrealized gains is problematic (Score:4, Informative)
Pretty easy to put lower limits on that sort of thing or even exclude a primary residence
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Billionaire trickle-down-fuck-YOU-pay-for-it-pleb economics will ensure retired homeowners on a fixed income end up losing their homes, because tax the shit out of those 'urealized gains' called home equity..
So what? There are millions of people within the USA that have never, and will never, own a fucking home. Let it all burn until we can learn to organize a society where people who are willing to work are treated fairly. What exists now is essentially slavery but without all the responsibilities of maintaining the slaves. Fuck that noise. That is no way to live. If you think what I am saying is unreasonable, that is only because of the social status of your parents.
Re: taxing unrealized gains is problematic (Score:5, Informative)
Eh, no. That would be land value tax.
Per wiki: Economists since Adam Smith and David Ricardo have advocated this tax because it does not hurt economic activity, and encourages development without subsidies., appealing to economist as diverse as Stiglitz to Friedman.
LVT is an in kind wealth tax.
Re: taxing unrealized gains is problematic (Score:3)
In Anglo-American property law, property taxes have historically been levied at the prerogative of the sovereign (in Britain, the Crown, and in U.S., the elected government of the states) from whom property rights in land ultimately flow and were historically used for things like municipal improvements and civil defense. Nothing to do with church tithes.
William the Conqueror's famous Domesday Book was compiled as part of an effort to regularize the recording of land holdings in order
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They never stop with "billionaires". That's not where the money is, not enough of it. It's going to be you; your house, your 401K, etc.
Huh? They already do this by updating the valuation of my home every two years. And 401(k) already are subject to some taxes (some at withdrawal based on your situation, some based on the investments themselves paying taxes, and some if you withdraw before a certain age).
Billionaires have already sucked way more than their fair share of the world's wealth into their own coffers. It's time they give some of that back.
People who care about their employees, who pay a fair living wage, who behave ethically
Re:taxing unrealized gains is problematic (Score:5, Informative)
They have no problem taking out loans on unrealized assets so if they are worth it to the banks, they can pay taxes on them.
Uh, no, you are missing the GP's point. (1) Their assets are not necessarily liquid. (2) Their assets can fluctuate wildly in value, that includes sharp declines.
The Net Worth numbers published in the press are a fiction. In the near future we will probably see a headline that is something like "Elon loses $200 billion". Elon will in fact suffer no such loss. There is no loss or gain until a stock is sold. A valuation based on today's closing price is a fiction.
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Ohhh That must be that risk that they keep explaining they take on board and therefore need either our respect for their hard work or financial concessions to get around.
We absolutely didn't realize that because their wealth is ephemeral it might go down quickly in a crash brought about by their own hubris, and it's definitely not skewing the economy to let them accrue unevenly without risk. No sir. We should just let them osmose the entire economy because the alternative is that finance gets disrupted and
Re: taxing unrealized gains is problematic (Score:3, Insightful)
It's not a risk. It's literally nothing at all. You're losing your shit over money that doesn't even exist.
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That must be that risk that they keep explaining they take on board ...
That is investing in a company, not unrealized gain in general. When you start or invest in a company you are at risk due to flaws in the business plan, flaws in execution, changes in government policy, unanticipated/unpredictable events, etc.
Re: taxing unrealized gains is problematic (Score:5, Informative)
Taxing unrealized gains is problematic. We've reached the point where not taxing unrealized gains is also problematic.
The very wealthy have pondered the question, "How can I enjoy my wealth without paying for realized gains?" They finally cracked the problem. The tax system now needs to adjust.
The legislature can get out in front of the issue and address it sanely. Or they can do nothing and wait for crack-pot citizen initiatives to fill the vacuum
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Taxing unrealized gains is problematic. We've reached the point where not taxing unrealized gains is also problematic.
There is another, and more important, area that is problematic. Spending. Unrealized games is just the politician's diversion from over spending.
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Taxing unrealized gains is problematic. We've reached the point where not taxing unrealized gains is also problematic.
The very wealthy have pondered the question, "How can I enjoy my wealth without paying for realized gains?" They finally cracked the problem. The tax system now needs to adjust.
The legislature can get out in front of the issue and address it sanely. Or they can do nothing and wait for crack-pot citizen initiatives to fill the vacuum
I have a simple solution to this - get rid of the "stepped-up" cost basis on such assets during inheritance. Example:
... once that $1 trillion goes
- You buy a stock for $1
- Stock appreciates in value to $101
- You die, your heir(s) get your stock
- If the sold was stock during your lifetime, you would pay tax on the $100 gained value
- Yours heirs acquire the stock at a "stepped up" value of $101, there are no gains, therefore there are no taxes on it
If we want to use $1-->$1 trillion as an example
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Bullshit (Score:5, Informative)
They live in an economic system completely different than the one you live in. It's not about money it's about power. They have it you don't and neither do I.
Re:Bullshit (Score:4, Informative)
I don't expect you to comprehend any of this, but here goes:
They don't do that for billionaires or other members of the ruling class. Those guys get to keep the leverage assets.
They absolutely do, especially for loans against shares. Not only will they do that, they'll margin call your shares just because the value went too low -- whether you were making payments on time is notwithstanding. If you don't have enough to buy your shares back, they take your shares and flip them, which then turns it into a realized gain that you get taxed on. And if they're RSU/ISO shares, then you have other consequences on top of that, particularly a loss of future income. But for the fact that you can't live in your shares, it carries a higher risk than a mortgage does because all you have to be concerned with in a mortgage is paying the thing on time every month.
The advantage of taking out loans on your shares is that if you're confident your shares will increase in value, then you get to forgo selling your shares, which means potentially higher gains later than you have to pay in interest. If those shares do increase in value, eventually they get sold, so not only do you have higher earnings, but the IRS also gets more taxes out of you in the long run, the only thing is it comes much later.
I personally have operated under a similar theory but without taking out a loan, namely I underpay my taxes and just eat the 7% interest the IRS charges me, because the share price increase will greatly exceed that percentage if I had accepted the share withholding, where I lose the shares outright. And guess what else? Both me and the IRS get more out of it than we would have otherwise.
Regardless of whether you take out a loan or not, taxes get paid on any proceeds as soon as ownership is transferred.
Trump went bankrupt multiple times and nobody ever seized much of any of his property.
Two reasons for this:
1) He never filed for bankruptcy
2) It wasn't his property to begin with
His businesses were all set up as corporate entities, which isn't unique to him or billionaires or your "ruling class". You can literally create an LLC for $100, which while a fortune to you, isn't to a typical wage earner. That LLC can then own properties. If the LLC is insolvent, it can file for chapter 11, which is debt restructuring, not asset liquidation. That's exactly what he did, multiple times, keeping creditors at bay until the businesses were profitable again. Individual wage earners can do basically the same thing under chapter 13, but Trump did not.
They live in an economic system completely different than the one you live in.
They definitely live in the same one I and everybody else does.
The fact that you don't comprehend how any of it works is why you're kind of off in your own little reality, which you share with exactly nobody.
Re:taxing unrealized gains is problematic (Score:5, Insightful)
By that logic, if CA took $200 billion worth of shares from Elon, he wouldn't actually suffer a loss?
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The counterpoint is that the valuation seems to be a fiction when it could represent a liability, and a real thing when they want to, say, take out a loan against it.
It's awfully convenient that it is selectively fictional.
Note that for more humble "wealth", folks are taxed. If you own the house you live in, even if you are not using it as a financial instrument but just a place to live, you get taxed on the unrealized "value" of the house. I don't get to say the market value of my house is a fiction since
Re:taxing unrealized gains is problematic (Score:5, Informative)
If they can borrow money against those "unrealized gains" - a major source of wealthy people's cashflow - then they can tax those "unrealized gains."
The tax is structured precisely because billionaires play shell games with their assets to avoid paying taxes.
> we need to change the rules to stop them from accruing the wealth to begin with.
And how do you do that, if not through taxes? Oh your stock/property holdings have a market value of $10B? Nope California law says they can only be worth $1B? That's just not possible to implement. The only realistic way is to tax those assets as they accrue and force them to exchange that "unrealized gains" for cash.
=Smidge=
Re:taxing unrealized gains is problematic (Score:5, Insightful)
>"If they can borrow money against those "unrealized gains" - a major source of wealthy people's cashflow - then they can tax those "unrealized gains."
That is the cart pulling the horse.
The problem is borrowing against unrealized gains to avoid income tax, so fix THAT. Then they will get taxed on that action, or on selling holdings which does create realized earnings and that will be taxed.
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Taxing the wealth is a better solution. It just IS.
I could explain the whole 'tax wealth, not work' thing, but I honestly don't have the time and I think if you're interested enough, you'll read about it.
Taxing wealth is not new, and at this point, it's necessary. Large amounts of wealth will sit and accrue value merely by existing, which is why billionaires that try to give away their money actually have such a hard time doing it. It gains in value faster than you can spend it because a billion dollars is
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If they can borrow money against those "unrealized gains" - a major source of wealthy people's cashflow - then they can tax those "unrealized gains."
Perhaps a tax against "income" from funds derived from borrowing against unrealized gains is a better and more fair alternative. It's real money derived from stock holdings, sort of like another form of dividends.
The super big problem with the proposed tax isn't the fairness question. The big problem is that it's a one-time windfall that might trigger recurring spending proposals. Locking in recurring spending based on one-time income is a super stupid financial decision.
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> The big problem is that it's a one-time windfall that might trigger recurring spending proposals.
No? This is purposely a one-time tax to fund with very clear and specific uses, and the law creates that fund entirely separate from the general government funding. The money raised is specifically to cover shortfalls in health, education, and food security programs due to lack of federal funding over the next few years (expected to last 4-5 years).
There are no recurring spending proposals. There are no spe
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You know even rich people have to pay back their loans right? How do you suppose they do that?
The US seems to have a problem with a very complicated income tax code that's full of loopholes. It might be a good idea to fix that first. You could adjust the upper brackets so a billionaire spending a few tens of millions of regular old income just on maintenance, staffing and debt servicing of his super yacht or private jet pays a higher rate than a peasant bringing in a mere $630k pay cheque to put food on the
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First off: In CA we have prop 13, which prevents CA assessor from taxing your home based upon current appraisal (it's limited to a rate increase based upon your purchase price.) This was done in the 70's because people were forced to sell their homes to pay taxes. I know this as fact because it happened to my grandparents in Los Angeles. Prop 13 remains law because even in CA, it is realized as completely unfair to homeowners whose only crime was they paid off homes and lived
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> First off: In CA we have prop 13, which prevents CA assessor from taxing your home
Aw gosh too bad there's no way to change a law with another law huh? Oh wait... this Act modifies Article XIII of the state constitution - the same Article that you refer to as "prop 13" - to allow the assessment and tax. Turns out it's rather easy to change a law with another law, 'cause the thing you cited has been amended at least nine times so far.
"The taxes levied by this Act are not "ad valorem taxes on real propert
Re: taxing unrealized gains is problematic (Score:4, Interesting)
They're not accruing anything other than speculative value. I honestly hope this bill passes anyway. It's better to perform these experiments at the state level before somebody tries it at the federal level. This might be for the best in the long run: This state's budget is fucked enough already, and the legislature will have no choice but to figure out how to do what the rest of us already have to do.
This is not the way. (Score:5, Interesting)
If we want billionaires to pay their fair share, we should start by eliminating some of the tax loopholes that allow them to avoid paying the taxes that less wealthy people have to pay.
These loopholes are many, they favor the ultra wealthy, they absolutely can be eliminated, and doing so is far less problematic than this wealth tax proposal.
I don't want billionaires to pay their fair share (Score:5, Informative)
You can't eliminate the loopholes. Because they will always just buy more. That's what happens when you give someone unlimited money and therefore unlimited power. It's only by the blunt application of direct democracy that you can short-circuit that process.
Remember billionaires don't use loopholes. Instead because they are the ruling class they are allowed to borrow money at below market rates against their assets without any risk of those assets ever being claimed. Imagine for example if you could mortgage your house at 3% and if you didn't pay the loan you got to keep your house. And because it's a loan you never pay taxes on it. That is how a billionaire does it. That is only available to them because they have power. It's not about money it's about power.
That's not a loophole that is a fundamental breakdown in our economic system because they exist outside of our economic system. You shouldn't be able to borrow money below market rates but they can. And you shouldn't be able to put your assets up for a loan with zero risk but they can. They are completely outside the economic system you live in.
Re:taxing unrealized gains is problematic (Score:5, Informative)
We don't, because government is the WORST allocator or capital imaginable. By far, and it's so bad I'm not even going to argue with anyone who thinks otherwise, because you might as well argue that stars are fireflies stuck in the sky.
Just because you've heard this repeated again on talk radio and conservative media just does not make it true, sorry. I know Republicans have moved past the idea of fact and truth but the rest of us still have to live in reality.
So why did DOGE, an office given unprecedented access, sometimes even illegal access to every government agencies records and information failed to find anything. They basically only "fed USAID into a woodchipper" and killed a few hundred thousand people and then fucked off having found close to nothing mounting to the billions or trillions of waste and fraud I've been told by people like you my entire life.
You have all 3 branches, you had them in 2016, you had them in 2003, 2005, 2015. So where is it? Let me guess. "Uniparty". "Deep State". "Other unknowable unprofitable enemy". It's so so boring at this point.
Re: taxing unrealized gains is problematic (Score:3)
Re: (Score:3, Funny)
Billionares are a more productive allocation of resources than the state
Can you support that claim?
You aren't a California taxpayer are you?
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the median conservative right here folks.
all talking points, zero brains. may as well be a parrot
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You aren't a California taxpayer are you?
the median conservative right here folks.
No, California liberals will say the same thing, in private, among friends.
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i say the guy is only talking points and he responds with more talking points.
When two California's are discussing something local they don't need to document the obvious that they both already know.
Saying the California state gov't wastes a lot of money is like saying California coastal waters are cold. They are local knowns.
Re:taxing unrealized gains is problematic (Score:5, Interesting)
No, they cannot support that claim. It's a absolutely stupid claim. Every single bit of state spending goes to ... people. The concern that states don't have balanced budgets (and California, by law, does) shows how much states spend. Governments spend. Billionaires? They often aren't even "real" billionaires. Their assets are tied up in imaginary faith-based market systems on which they are loaned money. They don't spend that money like a government does. They buy themselves some stuff. A super yacht, perhaps. But they don't say, "This economically deprived area needs a boost and let's just throw money at it." And frankly, the government doesn't do that nearly as much as it should, but that's the difference. It all goes back to Will Rogers quote that coined the phrase "trickle-down economics" in 1932: "The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night, anyhow. But it will at least have passed through the poor fellow’s hands."
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The concern that states don't have balanced budgets (and California, by law, does) shows how much states spend.
California has "balanced" budgets. They still issue bonds for various projects and pay back the money with interest, which is really not meaningfully different than the national debt, which is financed in the same way.
Sadly, California Democrats and federal Republicans all have the same mentality when it comes to spending: put everything on the government credit card and make the next guy pay for it.
A true balanced budget would not allow issuance of bonds for any reason except to cover startup costs for pr
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So you are one of those temporarily embarassed billionaires?
It's folks like you who think you'll achieve their level so they never have to do the right thing.
Your chances of being at their level are slim to none.
Re:Actual California Voter here. (Score:5, Interesting)
The point you missed is that the tax lower limit will start at a billion, then as the expected revenue fails to arrive the lower limit will begin a steady procession down.
Look up the history of the U.S. income tax. Is only 3% of the population subject to it?
Washington state is having the same issue. Raise taxes, spend even more than expected while revenue is less than expected, so now they are raising taxes again.
Cutting the bureaucracy never seems to be on the table even though AI should be a great opportunity to remove those whose job is to fill out forms proving compliance and submit them to other bureaucrats.
For an interesting take on this problem see here,
https://ecosophia.net/a-game-o... [ecosophia.net]
Except that's not going to happen (Score:3)
This isn't about getting revenue this is about curtailing the power that comes from having that much money. This is about saying, hey you Mr billionaire you can't order me what to do just because you have fuck loads of money because I'm going to take that money from you. You'll still have a lot of money so you can pay me to do stuff and I will do it but you won't have so much money that you can utterl
Re: Actual California Voter here. (Score:2)
Same. Look, the motivation of a corporation isnâ(TM)t the service or widget they are selling.
Itâ(TM)s not even to maximize shareholder value.
Instead, it is to maximize the wealth of the employees. That is to say each employee will do whatever they can to remain employed.
Their managers will do what they can to keep being able to manage people. typically by finding ways to hire as many people to manage as they can. And the executives will likewise do anything they can to keep their jobs for as
Re:Actual California Voter here. (Score:5, Informative)
I already proportionally pay more taxes than most wealthy people.
Spend everything collected and cry for more (Score:2)
I already proportionally pay more taxes than most wealthy people.
The top 1% of all income earners pay over 40% of California's personal income taxes. In other words, we already have a highly progressive tax system. The problem is not the taxpayers, the problem is the tax spenders. They will also spend everything collected and cry for more.
Income tax started in 1861 as a flat 3% tax on incomes over $800 (which today would be about $32,000).
This proposal will not stay a one time tax. It will not stay a tax on billionaires.
Re:Spend everything collected and cry for more (Score:5, Interesting)
Yeah, those are the doctors and lawyers and actors and all the people that WORK for a living. None of them are billionaires.
See, you're conflating the top 1% of income earners--the key word there is INCOME earners, not dirtbag CEOs that pay themselves $1 salary a year and take the rest in stock--with the ultra wealthy. The 0.1% and the 0.01%.
I'm all for lowering taxes on the top 1% too, if you start taxing the people that are hoarding the wealth. $10 million in assets? Whatever. Not even worth our time.
$100 million? Yeah, now we're talking. 1% of assets a year, minimum. They'll make that back so quickly they wouldn't even notice it. You could make it 2% or 3% and they'd never feel it. Man, we're paying 30% of our INCOMES, and somehow it's a hard sell to get 3-5%--TEN TIMES LESS--of a billionaire's wealth.
You're looking at the wrong numbers, the wrong population. Nobody cares about the working 1%, they're not relevant here. We're trying to get money out of people that don't pay income tax AT ALL.
Re: Spend everything collected and cry for more (Score:3)
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I did not expect to see this.
Do you think you are part of the majority on this vote? Or are you in the minority of so called 'clueless bootlickers unable to think for themselves'?
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You just don't understand how wealth works. When you see that first billion coming it's visible to you and depends on your actions so what these people will do is simply move right before taking those actions as any sensible person would or otherwise spend the money before you get to it in a way that lets them retain the wealth without looking like they do. It will lead to California becoming a place that serious people don't do business. And frankly the jabbering of the poors is worth less than nothing her
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If a society wants to reduce tax burdon on the poor or less wealthy, then you must impose tax on those that have wealth.
The burden of living is SIGNIFICANTLY less on those WITH money than those WITHOUT money.
A rich person is not giving the homeless a place to live, they are not giving them food, they are hording that money for no other reason than to flex.
Fact is, with a stronger middle class, a stronger e
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This post above brought to you by (Score:2)
It's not their money. They stole it.
And they're coming for your 401k too. You better start picking out your favorite flavor of cat food and you better decide on a dry choice because you're not going to be able to afford the wet stuff every week.
Or do you honestly believe that Elon Musk does 40,000 times more work in an hour than you do? Do you really think he invented rockets and the electric car? Are you genuinely unaware that he has an entire team of people at every com
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It's not their money. They stole it.
This is derangement. You're not alone or the only one experiencing it. But that doesn't change what it is.
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These dumbfucks should be on their knees thanking these billionaires for locating their businesses here. Let alone declaring residency here. California at the end of the day isn't that special. I can get a Mediterranean climate in many places on the planet.
Please fucking do then, California is full.
Even more seriously though, California natives both more and less native than me (my father and I were both born here, before that the history gets Mexican, but that covered a lot of ground once) would be perfectly happy if the Hollywood and the tourism went away, and California's economy was based on real things — or at least virtually real things. People would still want to live here, because it would still have the best weather in the continental US. Parts
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I'd rather turn this place into Monaco. Not Russia.
Monaco isn't on the table any more since this whole pedofuhrer thing has stained this country. Russia might be, though I would prefer to avoid that as well. Too bad. Good thing I don't have kids!
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Even if by some bizarre miracle you really think that Mark Zuckerberg and Elon Musk are geniuses we could not possibly live without
I think they are douchebags but they are irrelevant to my life. I really don't care about them at all.
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You'll never be a billionaire, man. Neither will I. But if I were, I would pay a mere 5%.
I'm paying 30% right now on my income that I need to live. 5% of a billionaire's wealth is NOTHING to them. Tokens in the game. They don't need that to live. They don't even need that to buy their next super-yacht. They only need that to hold over our heads and make us somehow believe that they EARNED it, even though for some reason those of us that work for a living don't deserve that? We didn't earn it?
It's ALREADY un
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Let's play pretend.
For a moment, let's say that a billionaire made their money by killing people. Straight up murdering them. They hustled hard, they made $1 billion.
Are they successful? Yes. Do they deserve that money? No. Should we take it? Yes.
Billionaires only get that way by exploiting workers that actually create the value. You work for Amazon, you make that company what it is. That guy at the top did SOME work, sure. He may have even have had the good fortune to be at the right place at the right tim