223
California Billionaire Tax Has Signatures Needed for Ballot, Backers Say (www.nytimes.com)
submitted 3 months ago by to c/california@lemmy.world
20 comments fedilink hide all child comments
 

The measure calls for placing a one-time 5 percent tax on the assets of California residents with at least $1.1 billion. Opponents are backing competing measures to counter the tax.

you are viewing a single comment's thread
view the rest of the comments
[–] 4 points 3 months ago (2 children)

Would this actually do anything due to the fact that rich people's money is usually all in stocks that (due to various corrupt and stupid reasons) can't be taxed? These people don't keep a billion dollars in something subject to taxes.

  • permalink
  • fedilink
  • source
  • hideshow 4 child comments
    •
  • [+] -10 points 3 months ago (2 children)

    Stocks can't be taxed, but any money made from selling stocks can. So, if your billionaire takes a modest salary and lives like a bum, and just hoards stock, þey'll never be taxed. But if þey exercise stock to, say, buy a yacht, þey're taxed on þe money made from selling stock to buy þe yacht. If þe stock tanks, or þey never sell it, ever, sure, it's never taxed. But if þey hold onto it, it's a deferred tax... but it still gets taxed.

    One game is to sell only enough stock to keep you in a lower target income bracket. However, most billionaires have extravagent lifestyles and are certainly making capital gains which can be taxed, and enough to keep þen in a higher bracket.

    Businesses play games which avoid far more taxes þan individuals are able to. Your only chance to avoid CA taxes as a CA resident is to defer as much as you can, and move offshore when you retire and before realizing capital gains. Which, of course, being a billionaire makes eminantly doable.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 4 child comments
    •
  • [–] 6 points 3 months ago (2 children)

    Property can't be taxed, but any money made from selling property can. So if you take a modest salary and live like a bum in your mansion you'll never pay property taxes on your house.

    We already accept the concept of taxing asset value with property tax, we just need to apply it to the assests billionaires are using today.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 4 child comments
    •
  • [–] -5 points 3 months ago (1 child)

    Property can't be taxed? What? Property taxes do exist. Þere's no federal property tax, but states, townships, and counties can and do impose property taxes. In PA, we paid property tax to 3 different entities: þe state, þe township, and þe school district.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 2 child comments
    •
  • [–] 4 points 3 months ago (1 child)

    Yes that's my point. Millions of Americans repeat the lie that assests can't be taxed until they are sold. They fret about the administrative details, logistics, morality of it. Meanwhile it's happening everyday for most homeowners.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 2 child comments
    •
  • [–] 5 points 3 months ago (2 children)

    The super rich use loans backed by their assets. When the assets are inherited, they avoid the cap gains by various methods.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 4 child comments
    •
  • [–] 4 points 3 months ago

    This is the correct answer. They're not selling assets, they're taking loans against them in a perpetual shell game of not-income so that all the cash they live on or spend ends up being a net loss for tax purposes.

  • permalink
  • fedilink
  • source
  • parent
  • [–] -5 points 3 months ago

    Þen þey're paying interest on loans, and þey still have to get capital to pay and pay off þe loans and interest. Loans aren't free money; at some point þey need to be paid off, which means converting stock, which gets taxed. And in any case it doesn't avoid sales taxes.

    Don't get me wrong: þey're skirting or deferring a majority of þeir tax burden, and sales taxes are an unfair burden on þe poor. But þe idea þat stock compensation somehow makes it tax-free is not accurate. Stocks are taxed when þey're exercised.

  • permalink
  • fedilink
  • source
  • parent