Frustrated with Fed inaction... 7 Blue States to introduce State Wealth Tax legislation.

[WarGamer]

Great news. Hold them down and take the money out of their pockets. Hoarded money helps no one. Sitting on 5 billion? Consider charitable donations or spending some of it?


https://www.msn.com/en-us/news/politics/billionaires-in-blue-states-face-coordinated-wealth-tax-bills/ar-AA16rr8k

“The point here is to make sure we do at the state level what is not being done at the federal level,” said Gustavo Rivera (D), a New York state senator who is part of the seven-state group.

Some of the state bills resemble the “wealth tax” that Sen. Elizabeth Warren (D-Mass.) pitched during her 2020 presidential candidacy. It’s a form of taxation never before attempted in the United States, in which very wealthy people would have to pay taxes annually on assets that they own, rather than just their income that year. Other bills focus on raising money from more conventional forms of taxation, including capital gains taxes and estate

But Frame, the Washington lawmaker, argues that billionaires should still be taxed on such holdings even if they don’t actually have the money in their bank accounts. After all, property taxes go up when the homes are assessed for a higher value, even if residents don’t actually see that money without selling the house, she notes.

[WarGamer]

1. Thursday

Sponsors told The Washington Post that they will introduce their bills on Thursday in California, Connecticut, Hawaii, Illinois, Maryland, New York and Washington, and shared the text of their draft bills.

[live love laugh]

2. So they "move" to secondary residences and claim them as primary residences.

Easy workaround.

[spooky3]

3. I'm sure the legislators anticipated that and wrote rules

Last edited Thu Jan 19, 2023, 12:22 AM - Edit history (1)

To prevent it. At the federal level, the IRS has long had procedures to determine what is a primary vs secondary residence.

[brooklynite]

14. States cannot impose tax laws on residents of other States.

[spooky3]

15. I didn't say that they did. I provided an example of how this problem

Has been solved elsewhere.

[brooklynite]

17. You presented an example of what the FEDERAL GOVERNMENT can do...

The Federal Government can apply its laws to residents of all States. Individual States cannot.

[spooky3]

18. I said that the problem of DEFINING A PRIMARY RESIDENCE

Has been addressed by the IRS. The poster I was responding to brought up the issue of a second residence being treated as primary when it really isn’t.

You seem to be thinking of a situation where a person actually moves entirely or primarily to another state. That is a different matter.

[brooklynite]

19. It is the more likely oiutcome if this State-level wealth tax is applied.

[WarGamer]

4. They've thought of that

Bottom line, I applaud the battle even if the Courts frown upon it at first.

It's necessary.

Walczak points out that California’s wealth-tax proposal — which would stay in effect for some years after a resident moves out of state — would almost certainly be challenged in court. And more generally, any wealth tax that generates revenue from a small pool of the state’s richest people can easily unravel if just one or a few very rich people decide to move, he argues.

[MichMan]

11. How would California expect to continue taxing wealth on people that no longer live there?

[WarGamer]

12. If they don't pay, sue them?

I don't know all the answers, I Just know that the wealthy literally have a free pass and hoarded wealth isn't good for anyone.

[roamer65]

5. It won't work without capital controls between these states and the others w/o same tax.

The money will have to get taxed before it leaves these blue states and leave it will without a scheme to tax it upon departure.

These blue states are better off enacting progressive income tax and progressive property tax schemes.

For instance, Washington should enact an income tax on wealthier residents. Currently, they don’t have one.

https://dor.wa.gov/taxes-rates/income-tax

[WarGamer]

6. Income taxes are a TERRIBLE way to tax the rich.

Here's an example, similar to that used by Musk.

In 2023, take no salary from Tesla. You've got millions in spending money laying around from 2022.

You live in a pre-fab home on Tesla Austin property and fly around on jets owned by a shell corporation through SpaceX.

Elon Musk can pay ZERO Federal Income Tax as the second richest man in the world.

Hell, he can pay ZERO tax... including property tax.

Not to mention, Musk can take out loans using Tesla stock as collateral and NOPE that doesn't count as Income either.

The wealthy laugh at income tax proposals.

[Wounded Bear]

10. Yeah, too many loopholes to exploit and no will in Congress to close them...nt

[brooklynite]

16. Define wealth in a Blue State...

I have an investment account with Vanguard. They buy shares in stock and create mutual funds which I buy into.

Vanguard is based in Valley Forge, PA. How is NY going to apply a tax to that if I move out of NY?

[BigmanPigman]

7. I feel like all the previous replies were in Greek.

I understood the post but got lost soon afterwards. I'm glad DU has a lot of patience with my ignorance. Thank you, I always learn a lot here.

[lostnfound]

8. It's not really "hoarded money"

It’s a number that entitles them to certain control over corporations.

Not that I disagree with the concept. Their extraordinary level of control is-just as harmful.

[GoodRaisin]

9. The rich are the ones that bring up "state's rights" so often.

They should love this.

[brooklynite]

13. And it won't pay in any of the seven States...

Legislative symbolism is a waste of time.