Thing is we’ve done the experiment and it doesn’t work. France had a wealth tax (called the ISF, impôt sur la fortune) and it never actually garnered the expected revenues. This is because wealthy French people moved to Brussels, where you still have a pretty nice city and you can still speak French. Macron got rid of it and there was a mini-crash in Brussels real estate as people move back. There’s nothing stopping me or anyone in CA to move to CO or UT or TX. Sure I’m further from the ocean but those are still pretty nice places to live. I love CA and I’m very far from the $30M threshold, but if I did have this sort of tax it’s hard to justify not moving for lower taxes AND cheaper cost of living with very little downside. With the rise of remote work, there’s even less of a downside.
> This is because wealthy French people moved to Brussels, where you still have a pretty nice city and you can still speak French
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 ;-)
I can’t say what percentage of wealthy people did this versus just regular asset hiding, but it happened enough to be visible among Belgians (my family lives in Brussels). Either way, hiding assets is relatively easy if there are millions of dollars on the line. Also, moving to CO or UT is even easier than moving to Belgium from France.
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.
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.
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.
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.
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?
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.
> 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.
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?
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.
> 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!
>> 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.
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.
> 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.
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.
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.
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.
> 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.
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.
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.
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.
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.
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”.
Ok. Are you a Californio old enough to remember Silicon Valley when it was mostly farmland? You’d have to be around 70-80 years old right?
If we’re talking about the conquistadors, can’t we lump them in with “Just very greedy overly ambitious and pretentious people”? They weren’t kind to the indigenous people. Even slavery wasn’t out of the question.
“Prior to contact with Europeans, the California region contained the highest Native American population density north of what is now Mexico.“
Native Americans settled in California 19,000 years ago or earlier, at least 18,500 years before the arrival of the conquistadors.
Given your own ignorance of history, I really doubt you’re even old enough to remember Silicon Valley when it was just a bunch of orchards.
If you really want to live in a place similar to California before Silicon Valley, there are plenty of states within the US that can offer that experience right now. You don’t need patience, you just need courage to experience it; that is of course if you were pining for less development and population density. Reading what you’ve previously written again, if what you really wanted was ethnic purity (which I misread as wanting to live in less developed areas) then I have other words for you. That type of post is not welcome on HN
California indigenous who settled and mestizos who colonized share the same haplogroup d dna.
They are the same people.
And for what it's worth the massive anglo/white immigration into California has been tantamount to ethnic replacement - not just in California but all over this continent.
So excuse me if I don't cry a river over fewer transplants.
So we're playing the semantics game now? Let me guess, you didn't make a racist comment. Instead you made a comment about ethnic pride? If we're playing this game, let's be clear on the definitions:
settle - to establish in residence
colonize - come to settle among and establish political control over the indigenous people of an area.
> They are the same people.
According to the Californios article you referenced, they are not the same people as the Native Americans who first settled in CA.
"Californios included the descendants of agricultural settlers and retired escort soldiers deployed from what is modern-day Mexico. Most were of mixed ethnicities, usually Mestizo (Spanish and Native American) or mixed African and Amerindian backgrounds."
Otherwise, (using your own language), the Californios wouldn't have colonized California
> And for what it's worth the massive anglo/white immigration into California has been tantamount to ethnic replacement - not just in California but all over this continent.
Thank you for confirming my suspicions of your comments being racist and no, I am not white yet I do find it ironic for one descendant of colonizers to complain about the descendants of other colonizers. I wouldn't be surprised if you considered Asians and Pacific Islanders as "invaders" as well. Also you're proving your ignorance yet again. Since you've mentioned your imagined "ethnic replacement" of Hispanics in CA (which the majority of I'm pretty sure are not as prejudiced as you - and let's not confuse ethnic cleansing with population changes from immigration & migration), let's go over CA's current or near current ethnicity statistics ordered by the largest:
* Hispanic 39.29% (This has increased from 36.6%)
* White, non-Hispanic 36.64%
* Asian 14.525
* Black 5.51%
* Pacific Islander 0.36%
* Native American 0.35% (they are not Californios, and they are still here)
* Other
> So excuse me if I don't cry a river over fewer transplants.
I'm not going to excuse and condone what I feel are posts from a racist reminiscing about ethnic purity in California. You do NOT post this type of garbage on HN.
> Why do you think there are so many posts about people wanting to leave California? Do you think it's really all about taxes? It's not.
From your initial post, I just thought it was about over-development. I didn't expect to be about demographics and ethnicity, specifically maintaining your idea of CA's racial "purity". Consequently, I was very confused when you asked me to leave CA.
> The prevailing rhetoric of California being "bad" is mostly political and has racist anti-liberal roots. By shutting down counter views you're allowing those racist viewpoints to prosper
Let me get this straight, by calling you out on your racist viewpoints, I am allowing racist viewpoints to fester? That totally makes sense.
Who cares if other racist viewpoints have white, conservative roots? Racism is bad, period, regardless of its origins, the ideology of the people holding those ideas, and whether or not it's systemic. As shown by your own comments, conservatives do not have a monopoly on racism either.
> And by the way, none of your rhetoric counters what is historical fact.
That's great counter-argument with no details or facts, other than the slivers you've previously provided that I've quickly shut down. I guess your newest comment isn't rhetoric either?
> The plurality of California are not Hispanic by pure accident.
Yes, CA promotes diversity, yet you lament not having a more homogeneous population. The only difference between your views and "America First" proponents' view is the ethnicity being supported.
> Lastly, it should be possible to have a rational discussion about demographics on this site without people over reacting and name calling.
Forgive me for pointing out thinly veiled racist comments on HN. It's a natural conclusion to assume that racists comments are made by a racist. I am not over reacting. I initially assumed good faith and gave you the benefit of the doubt for too long. You're just downplaying your BS.
Let's revisit your BS before you delete it:
"_You_ go to Idaho and Wyoming.
California is our state."
So apparently according to your view point, California is only for "Californios", Hispanics who originated from Mexico?
"My qualms are more with the demographic changes these massive migrations brought.
Just very greedy overly ambitious and pretentious people.
To me they make terrible neighbors and have zero regard for the land, nature or the people here.
Some I assume are good people but I haven't met any."
I don't even have to comment on this one. It speaks for itself, especially the last line. Since you're really into semantics, let's define racist:
racist - a person who is prejudiced against or antagonistic toward people on the basis of their membership in a particular racial or ethnic group with the belief that groups of humans possess different behavioral traits corresponding to physical appearance
What does this non-sequitur have to do with anything written so far? With you alluding to be a liberal, you've just proven that racism transcends American politics of left and right.
> I hate racists too which is why I prefer not having them in my state.
I am sorry that somewhere along the way you were hurt so much that it would push you to blame all of your misfortunes on another race or ethnic group, similar to poverty stricken members of neo-Nazis and the KKK; but you need to have a hard look in the mirror and do some serious self-introspection.
Let's re-read your comments.
"_You_ go to Idaho and Wyoming. California is our state."
I didn't understand it at the time, but you were telling me that CA only belonged to members of your own ethnic group.
"My qualms are more with the demographic changes these massive migrations brought. Just very greedy overly ambitious and pretentious people. To me they make terrible neighbors and have zero regard for the land, nature or the people here. Some I assume are good people but I haven't met any."
Your comments in just a single thread, really just this specific comment, already meet the textbook definition of a racist. In fact, I can attribute what you just wrote to a white supremacist, and it wouldn't seem out of place.
racist - a person who is prejudiced against or antagonistic toward people on the basis of their membership in a particular racial or ethnic group with the belief that groups of humans possess different behavioral traits corresponding to physical appearance
If you can't reconcile this and change, then I agree with your statement. I also prefer not having racists in my state and I like diversity because life is richer with it, so it would be nice if racists like yourself left California or the United States entirely, regardless of whether they think they are conservative or liberal. In fact, please leave HN. People with your ideology need to either change or leave.
Liberal by definition is anti-racist. A major tenet of liberalism is egalitarianism and it's what allows free market capitalism.
Maybe you should go educate yourself about what Liberalism is before appointing yourself the racism police on Hackernews.
I'm a liberal and I've said I prefer not having more racists in California with illiberal sentiment. That is the opposite of racist.
There is a long history of America enforcing white racial integrity which you seem to be naive to. As a native Californian I think it's fair to be weary.
I stand by not wanting more transplants in my state and it's not just me.
Tit for tat flamewars like this are not welcome on HN. Worse, you've been using the site exclusively for political battle for a long time now. The site guidelines explicitly ask you not to do this, and you've been posting so much of it that I've banned the account. I hate to ban a 10-year-old account, but the pattern here is egregious.
If you don't want to be banned, you're welcome to email hn@ycombinator.com and give us reason to believe that you'll follow the rules in the future.
1. Just because you feel that you're liberal does not mean that you are actually a liberal.
2. You can identify as a liberal and still be a racist. e.g. your ideals of "egalitarianism" only seem to apply to you fellow "Californios" and no one else
> Maybe you should go educate yourself about what Liberalism is before appointing yourself the racism police on Hackernews.
I've already proven based on your comments alone that you hold racist views. Let me remind you the definition of a racist again, since you keep forgetting and ignoring it.
racist - a person who is prejudiced against or antagonistic toward people on the basis of their membership in a particular racial or ethnic group with the belief that groups of humans possess different behavioral traits corresponding to physical appearance
How do you not fit the definition of a racist based on your previous comments? Let me remind you that your very first comment for me was essentially, "Leave my home, it only belongs to my people (who are racially / ethnically similar to me)". How is that much different from "Go back to your own country?"
Maybe we should have HN decide who is right and who is wrong? Your views do not belong here.
> There is a long history of America enforcing white racial integrity which you seem to be naive to. As a native Californian I think it's fair to be weary.
You're not wrong that America has a long history of racism in favor of white Anglos. I'm not disputing that. However, I think you're the one who needs a history lesson, instead of believing in your revisionist version. While the Calfornios were mixed, being multi-generational descendants of both conquistadors and indigenous people, they were by and large culturally still the same as their conquistador ancestors. They served European royalty to take and subvert land and native peoples for the Spanish crown by any means necessary. The first Calfornios were soldiers. All of this is well documented.
"Spanish and Mexican rule were devastating for native populations. 'As the missions grew, California’s native population of Indians began a catastrophic decline.' Gregory Orfalea estimates that pre-contact population was reduced by 33% during the Spanish and Mexican regimes. Most of the deaths stemmed from imported diseases and the disruption of traditional ways of life, but violence was common, and some historians have charged that life in the missions was close to slavery."
The Spanish conquistadors' descendants were no better than their English counterparts when it came to colonization and brutality. "Californios" are also not the same people as California's native population.
> I stand by not wanting more transplants in my state and it's not just me.
The popularity of a belief does not guarantee that it's actually moral or ethical. Your views are not acceptable on HN and they do not belong on HN.
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.
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.
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.
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.
Is this also your perspective on something like unit testing when your first regression slips through?
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.
I'd say taxes are less comparable to something that would justify a unit test and more comparable to UX. There's a huge human element that you're just never going to be able to fully control.
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.
Sorry, "unit tests" prob made it sounds like I think more stochastically than I actually do. Was just trying to use jargon of this place. As a longtime community organizer, the messy human stuff is def where I prefer to operate :)
> 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!
Genuine question, as that doesn't sound like a a fair experiment.
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?
You mean something like a Berlin wall to stop the people leaving the paradise or a new kind of serfdom, where one should be tied to the land in which he was born?
I dunno why this is downvoted. This phrase: "the problem seems to be we can't tax the rich because they take advantage of globalism to move their money around"
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.
> the problem seems to be we can't tax the rich because they take advantage of globalism to move their money around
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.
