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California Set To Pass America's First Wealth Tax Targeting The Ultra Rich


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It was about about nine years ago when consulting company BCG first suggested that in a time of out of control spending and soaring debt loads, the only fiscally sustainable "solution" was to implement a wealth tax (see "There May Be Only Painful Ways Out Of The Crisis").

While the idea was well ahead of its time in 2011, and was quickly shut down in the court of public opinion, several years later none other than the IMF resurrected the idea of a wealth tax, which has only gained momentum in recent months, and despite widespread grassroots pushback, the concept of a "wealth tax" has moved front and center and most recently the chairman of Capital Economics, Roger Bootle, said that the world’s wealthiest could be subjected to higher tax rates as governments scramble to fund spending and repair their economies amid the coronavirus crisis.

Fast forward to today when the ultra-liberal state of California is now ready to take this "socialist" idea from concept to the implementation phase, with the SF Chronicle reporting that a group of CA state lawmakers on Thursday proposed a first-in-the-nation state wealth tax that would hit about 30,400 California residents and raise an estimated $7.5 billion for the general fund.

The proposed tax rate would be 0.4% of net worth (most likely ended up far higher), excluding directly held real estate, that exceeds $30 million for single and joint filers and $15 million for married filing separately.

Oakland Democrat Rob Bonta, who is the lead author of the wealth tax proposal AB2008, justified the wealth expropriation by saying that California is facing a big budget deficit because of the health and economic crisis brought on by the coronavirus, and "we can’t simply rely on austerity measures," to close it. It wasn't immediately clear why austerity doesn't work considering that California has never actually tried it, but in any case the Democrat's proposal was clear: "We must consider revenue generation."
 

More: 

https://www.zerohedge.com/markets/california-set-pass-nations-first-wealth-tax-targeting-ultra-rich

Some of the lefties / statists on HPC will cheer with delight but wealth taxes do not really work. They will just leave or find away to get around it. C'est la vie.

Edited by Warlord
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1 minute ago, ubuntu said:

He can be bit of a loon but Martin Armstrong also gives this warning, it's not just California also NY

https://www.armstrongeconomics.com/world-news/taxes/i-strongly-urge-readers-to-leave-california-new-jersey-illinois-connecticut-new-york/

They risk destroying the golden egg -- Silicon Valley.

The tech multi millionaires will leave and take the capital and jobs with them.

 

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7 minutes ago, ubuntu said:

He can be bit of a loon but Martin Armstrong also gives this warning, it's not just California also NY

https://www.armstrongeconomics.com/world-news/taxes/i-strongly-urge-readers-to-leave-california-new-jersey-illinois-connecticut-new-york/

His timings are sometimes out and I find his Socrates computer thing a load of crud.  However his view and insights as to what is happening  are on the money imo.

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1 hour ago, Warlord said:

They risk destroying the golden egg -- Silicon Valley.

The tech multi millionaires will leave and take the capital and jobs with them.

 

Surely they are all selling all their company equity to buy gold with?

Who would want apple or amazon share options.. Wont be able to barter for goats with them unlike old gold coins. 

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29 minutes ago, ticket2ride said:

+1.

We kept being told the banksters would f**k off if they were taxed.

Look how that ended. Or didn't.

The banksters are a protected class the rest of us are not so lucky! 

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4 hours ago, Warlord said:

They will just leave or find away to get around it. C'est la vie.

Sadly you may well be right.

The standard response is to threaten to leave and then if not pandered too, disappear to another location with lax regulation to allow their continued tax evasion minimisation.

Daft really as they need access to markets to make their profits and that could quite easily be withheld if enough governments called their bluff. There is the faintest glimmer of hope that given this is a global problem they may yet be pinned down and forced to pay their way, but I wouldn't hold my breath.

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3 minutes ago, Switch625 said:

Sadly you may well be right.

The standard response is to threaten to leave and then if not pandered too, disappear to another location with lax regulation to allow their continued tax evasion minimisation.

Daft really as they need access to markets to make their profits and that could quite easily be withheld if enough governments called their bluff. There is the faintest glimmer of hope that given this is a global problem they may yet be pinned down and forced to pay their way, but I wouldn't hold my breath.

The sword will always fall on the middle class when it comes to tax.. the protected class move around, have clever accountants, political connections, foundations, trusts  or whatever.  

 

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1 minute ago, Switch625 said:

Now that I totally agree with

One way is to have property taxes as a % of current value which I have suggested but people wont like it especially in the SE and London as bills will triple but if you want an NHS and schools etc. then it has to be paid for . 

However if you tax the properties too much they just put them into an overseas (Liechtenstein) trust or similar corporation. You have to rewrite the tax laws and it'll never happen because the special interests own the politicians.  Nice racket. 

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On 18/08/2020 at 18:43, Warlord said:

The sword will always fall on the middle class when it comes to tax.. the protected class move around, have clever accountants, political connections, foundations, trusts  or whatever.  

 

Sadly that seems to be the result in the end.

The risks the tech industry will just leave en mass is overplayed because Silicon Valley has a critical mass of the required people there and thats hard to move away en mass.  Here's a thought if the tech industry could be anywhere in the world through their own IT technologies why haven't already moved out en mass already?

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18 hours ago, nightowl said:

Sadly that seems to be the result in the end.

The risks the tech industry will just leave en mass is overplayed because Silicon Valley has a critical mass of the required people there and thats hard to move away en mass.  Here's a thought if the tech industry could be anywhere in the world through their own IT technologies why haven't already moved out en mass already?

Because the essential Silicon Valley tech operation is a parasitic monopoly that succeeds by imposing its own proprietary technologies on the US and then the rest of the world at the expense of its competitors. This form of predatory anti-capitalism wouldn't be possible without the active connivance of Washington. Nowhere else in the world would these predatory anti-capitalists enjoy such a favoured tax-lite status, amounting in effect to a unwritten covenant. Indeed, under Trump the US govt has gone even further and sought to penalise non-American tech rivals such Huawei and Tik Tok.

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  • 419 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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