If you tax them, will they leave?

https://www.theatlantic.com/economy/2026/01/california-wealth-tax-billionaire-migration/685779/

by JumpCrisscross • 6 months ago

115 355 6 months ago

carlosjobim8• 6 months ago

The tax system is made with large incentives for all business owners (from billionaires to small businesses to shareholders like retirees) to invest all profit into expanding their business.

If an owner takes out profit, they are punished with high income taxes. So they reinvest in their business, and this is what the government wants because it creates jobs, innovation, products and services, and tax income.

So they've been doing what they have been forced to do by the government. And as a consequence their companies are worth a lot.

Now the government wants to tax them on the company value?

michaelsshaw2• 6 months ago

I guess I just totally imagined that $1 trillion pay package for Elon Musk.

carlosjobim8• 6 months ago

It's not in the form of salary, if you look it up. So the money is still locked within the company, not taken out as profit.

ricardonunez• 6 months ago

In most recent years they stopped doing part of that equation.

_1• 6 months ago

Taxes are not a punishment.

wiseowise3• 6 months ago

They are. Look at the Netherlands, they want to implement taxes on unrealized gains.

dolni• 6 months ago

When a significant share of the taxes you pay are mishandled or lost to fraud, yes it is a punishment.

That's been happening for a long time in the US. Staggering military industrial complex. Tens of billions lost in COVID relief. Billions lost in Minnesota due to unchecked privatized social welfare fraud (which has been known about for a decade).

Some mistakes will happen. What we have is unacceptable. If the government can't handle the money responsibly, it has no business collecting the money.

w4yai• 6 months ago

say that to trump

lucaspm985• 6 months ago

Taxes are often used as either incentives or disincentives for certain behaviors. Examples of incentives are the Child and Dependent Care Credit and EV Tax Credits. An example of a disincentive is a Mansion Tax.

softwaredoug• 6 months ago

Arguably these and billionaires have become a social menace. They undermine democracy, destroy our environment, and prioritize shareholder value over long term well being of the economy they live in.

If they all had unified in one voice against the administration, Trump might be more constrained. They might not be so hated. If they realized, like Henry Ford, that a strong middle class actually is good for THEM too, all this could be avoided. Instead they’re showing up at Melania screenings while average citizens are getting shot in the streets.

I don’t think they realize the fire they’re playing with my stomping on the social contract that made them so wealth.

yetihehe• 6 months ago

I don’t think they realize the fire they’re playing with my stomping on the social contract that made them so wealth.

Some of them do: https://news.ycombinator.com/item?id=42335797

But the pitchforks are coming for 12 years already. They got accustomed to the sight and even put some measures to redirect the masses so they fight each-other.

Grisu_FTP• 6 months ago

I just googled confused what a "Melania screening" (Thought it was like a sort of security screening, maybe all the ICE is messing with my head) is. First time i heard about the Movie. This feels like one more step the Trump fam. took to become some sort of celebrity-king thing.

cucumber37328423• 6 months ago

Arguably these and billionaires have become a social menace. They undermine democracy, destroy our environment, and prioritize shareholder value over long term well being of the economy they live in.

Sadly, I'm far more worried about a thousand people who make a million bucks than I am about one guy who makes a billion.

You don't get to the B number by not being pretty darn shrewd and sociopathic so those guys must be pretty evil but man have the "upper middle class" or "professional managerial class" or whatever you wanna call the "comfortable enough to not think about the harsh economic realities of their ideas" class been an unmitigated disaster for western society over the past 20-70yr depending on how you wanna measure.

RGamma4• 6 months ago

And not investing in society has some consequences as well... Increasingly it seems big business is bad business (again).

mhitza• 6 months ago

The double irish, single malt, capital allowances for intangible assets.

If everyone would be able to play these tax avoidance schemes I'm sure society would collapse. For big players these are easy schemes and somewhere this untaxed wealth must be recaptured. Just favoring the rich further accelerates the wealth imbalance.

carlosjobim8• 6 months ago

That of course depends on what you mean by "society".

But everybody is able to reinvest profits into a business they have, whether that's an industry giant, or a tiny one-man shop. There is no government on planet Earth which considers that to be "tax avoidance". Governments want profits to be reinvested and not paid out to owners, even the most socialist governments you can find.

If you're against this, then you shouldn't talk about taxes. You should rather talk about abolishing private property completely.

cucumber37328423• 6 months ago

If everyone would be able to play these tax avoidance schemes I'm sure society would collapse

Would it? Or would it just shift demand around? I mean the money is still there, and I don't see any reason the entities with money would lock any more of it up in a "static" manner (e.g. gold bars and piles of cash) than they do now.

zbentley4• 6 months ago

Now the government wants to tax them on the company value?

I’m genuinely baffled at the incredulous tone here. Yes, that is exactly what should happen: laws, subsidies, and incentives enable a company to grow and flourish. Then, as the company grows, other laws incentivize it to give some of its state-sponsored affluence back to benefit the country.

Like, sure, the execution of that process is often dysfunctional, but the fundamental contract there does not seem like it should be surprising to people: we don’t have (many) socialist state-owned businesses, but the point of a functioning country is still to provide good things to the people living in it. Not to benefit businesses or a tiny sliver of the population.

That’s why we have everything from income taxes to interstate highways: to distribute wealth and resources to (a flawed approximation of, but it’s still the goal) everyone in the country. That’s just how non-corrupt governments are supposed to work!

carlosjobim8• 6 months ago

give some of its state-sponsored affluence back

Then why not tax the military? They are surely the most affluent company of them all, if you take a tally of all their inventory.

If you tax companies based on their size rather than their profits, then you're not going to have any big companies. Any investor or entrepreneur would be a fool to invest in making a big company.

But many endeavours need big companies and big investments. For example power plants. That's a whole lot of value to tax, such affluence! Better redistribute this wealth, and instead have a hundred thousand non-affluent hot dog stands.

That’s just how non-corrupt governments are supposed to work!

In practice, every government in the world does not tax companies reinvesting their profit into growth.

igogq4253• 6 months ago

Ultimately, an economy is all about the side effects you describe (goods and services for the population). The fact that, while producing these side effects, the machine also leads to massive wealth accumulation among a small number of people is another side effect that basically has nothing to do with the core tasks of the economy. The question now is how to evaluate this additional side effect. If it does not have any negative consequences, it can be ignored. If it does, it should be counteracted.

It's like in a combustion engine. Oil has to be added for the engine to work. But over time, dirt particles, metal abrasion, soot, and combustion residues accumulate in the oil, overwhelming the oil filter and reducing its lubricating ability. If you don't reset it to a “healthy” basic state at regular intervals, it gets so bad that it prevents the engine from operating and ultimately even destroys it.

Does the massive wealth inequality we see today cause problems that lead to the erosion of society itself? I would say yes, definitely. Of course, it is frustrating for these people when the money they have generated is taken away from them. But let's look at it realistically: if someone has $100 billion and $99 billion is taken away from them, they are still in a situation where they lack nothing financially.

At some point, you've played capitalism through to the final level. And then you should put down the controller and go outside to listen to the birds chirping instead of frantically chasing after the growth of a number that, due to its sheer size, no longer has any concrete meaning, apart from the fact that there may be two other people whose numbers are bigger or who are hot on your heels.

carlosjobim8• 6 months ago

Does the massive wealth inequality we see today cause problems that lead to the erosion of society itself? I would say yes, definitely.

On a side note. Yes, the massive wealth inequality is eroding society. But billionaires aren't the source of this problem. They are outliers, freaks if you so will.

The real problem is the massive wealth inequality is the gigantic prices of real estate and rent, created by the monetary system being based on real estate instead of productivity. That means it is very hard for a person to claw and scratch her way to equality if they're not born with real estate or gets that benefit at an early age. For most, their irredeemable mistake in life was choosing to be born in the wrong decade.

At the same time a huge percentage of the population who has never made any effort in life and generally have no talent or any admirable qualities, get great wealth and comfort by having been born at the right time.

For every billionaire there is a a hundred thousand of the kind of person described above. Most of us have them not far away, and they have a hundred fold bigger impact on our lives than any billionaire. And at least many billionaires have at least accomplished or done - something - in their life.

At some point, you've played capitalism through to the final level. And then you should put down the controller and go outside to listen to the birds chirping instead of frantically chasing after the growth of a number that, due to its sheer size, no longer has any concrete meaning, apart from the fact that there may be two other people whose numbers are bigger or who are hot on your heels.

Wouldn't building a rocket to go to Mars for example be such an endeavour, which is bigger than chasing the imaginary dollar number? Or the philanthropic endeavours of other famous billionaires? Or even exacting political influence in the shadows, which is probably something all known and unknown billionaires do?

rvz3• 6 months ago

TLDR: yes.

Case study: New York City, United Kingdom, France, Germany, Denmark…

The list goes on until they choose; Texas, Florida, Singapore and Dubai.

ReluctantLaser• 6 months ago

Perhaps I missed it, but your TL;DR seems like a personal view rather than what is in the article. Do you have sources for your claims?

coderjames• 6 months ago

Not OP, but one example I can think of: Jeff Bezos moved from Washington state to Florida two years after Washington enacted a 7% capital gains tax "on the sale or exchange of long-term capital assets such as stocks, bonds, business interests, or other investments and tangible assets"[1] which "reportedly helped him save $1 billion in taxes."[2]

[1] https://dor.wa.gov/taxes-rates/other-taxes/capital-gains-tax

[2] https://finance.yahoo.com/news/jeff-bezos-moved-florida-impa...

rvz3• 6 months ago

It’s not really hard to see such a migration if you simply follow the money. See [0] and [1]

[0] https://www.forthcapital.com/uk/articles/2025-wealth-migrati...

[1] https://www.henleyglobal.com/publications/henley-private-wea...

lucaspm985• 6 months ago

There's plenty of studies on this. There's unsurprisingly a modest but statistically significant migration of millionaires from high-tax to low-tax jurisdictions.

https://www.asanet.org/wp-content/uploads/attach/journals/ju...

jdiff3• 6 months ago

People have been saying it about NYC forever, but last I checked the millionaire+ population of NYC had grown, not shrunk.

lucaspm985• 6 months ago

Of course the number of millionaires has grown on an absolute basis given inflation and the strong stock market.

To control for this look at NYC's share of the nation's millionaires, which shrank from 6.5% in 2010 to 4.2% in 2022.

https://cbcny.org/research/hidden-cost-new-yorks-shrinking-m...

chipgap982• 6 months ago

Ah yes. There are famously no billionaires who live in New York City

zipy1242• 6 months ago

I mean, net millionares are massively up in the UK, not nearly as many left as are created, so it's not really a good case study there.

rvz3• 6 months ago

I assume you have a credible source for that (baseless) claim and for what year exactly?

charlieyu13• 6 months ago

And it is just inflation. Does a million quid even last a lifetime now?

michaelsshaw2• 6 months ago

Here's a better question: do we need them? I'll answer it for you: no. Let them leave. We still have the resources and the productivity. The fact that some asshat that doesn't do fuck all doesn't get to scrape profits for himself is just another advantage, aside from just not having these annoying billionaires around. People need to open their minds to the idea of us just taking their shit for ourselves.

TheChaplain• 6 months ago

I believe the level will simply be adjusted then, the middle class end up being heavier taxed.

But that is usually a fairly large group, and if they feel taxes are too much, they will listen to any politician that promises a solution.

Then it can become pretty nasty...

meekrosoft42• 6 months ago

They certainly have had that effect in Norway: https://www.brusselsreport.eu/2024/09/11/the-failure-of-norw...

mcny4• 6 months ago

Meh. Good riddance.

WithinReason• 6 months ago

$146M expected increase in tax revenue turned into $594M loss, good riddance to taxes as well I guess?

dv_dt4• 6 months ago

Norway also ranks as seventh happiest nation in the world. Correlation or causation?

https://worldpopulationreview.com/country-rankings/happiest-...

antonymoose• 6 months ago

Small, homogenous, a generous welfare system, and with a massive sovereign wealth fund thanks to wise oil exploitation.

tetris11• 6 months ago

I do wonder still if the country is better off. Billionaires investing in an area tends to skyrocket rent, housing tax from greedy councils, and skews food and utilities upwards too.

The loss of the richest man in the village might mean the baker now has to kowtow his prices to his less well-to-do neighbours again

ericmcer• 6 months ago

Seriously as someone who grew up in the Bay Area. I am here for the weather, family and friends. I don't care if billionaires leave and real estate prices normalize at the cost of a bunch of tech jobs.

That said I wish we would take a look at spending before we just keep raising taxes and then a year later saying "how are we gonna get even more money?". California has an insane amount of wealth per person and one of the highest state tax rates. Can they really not figure out how to operate with their current budget?

actuallyalys• 6 months ago

I did notice that the writer says he was commissioned to cowrite a report that will be the basis for a lawsuit against the tax:

Four Norwegian entrepreneurs have commissioned yours truly, Dr. Laura Melusine Baudenbacher and Professor Dr. Dr. Mads Andenas to write a comparative law study on the Norwegian wealth tax. This report will be the basis for a class action against the Norwegian state.

I assume the fact it’s submitted to a court will dissuade the authors from making totally unsubstantiated claims, but it still seems like there’s a strong financial incentive for them to reach negative conclusions about the tax.

koe1232• 6 months ago

This question is always strikes me as a false dichotomy, i.e. "we have to tax them, or else they leave". The issue is in my view is that constructing a system where the existence of such a rich class has become necessary to raise enough tax revenue. Organizing your country with more sustainable growth where income disparities aren't so high means you don't have this problem to this extent.

chipgap982• 6 months ago

Who said "we have to tax them, or else they leave"? That doesn't seem to be what anyone is saying. The issue is that this group is threatening to leave if they are taxed.

I agree you should want to avoid having an income disparity like this, but we are where we are. The goal of this tax is to help correct that disparity.

oklahomasports• 6 months ago

Not a legitimate goal. But yeah if the government needs revenue they should raise it.

drorco9• 6 months ago

Then the next question is why does wealth, in practically all industrious countries seem to distribute disproportionally and not uniformly?

One argument could be that maybe entrepreneurial personality traits aren't normally distributed, and unless you find a way change people's personalities in mass, the imbalance in wealth attraction will remain inherent.

Then you might ask, if that's true, do you I want to enforce equality, potentially dragging down the economy to mediocracy (for example many stagnating European economies) or maybe accept that current nature does not meet our societal desire for equality.

mcntsh3• 6 months ago

Then the next question is why does wealth, in practically all industrious countries seem to distribute disproportionally and not uniformly?

It's simply because money is compoundable. The more money you have the more you can make, and the more you make means less other people have.

mcny4• 6 months ago

Not to be too glib but my mom would ask counter questions like this:

Why is it that we have to trim out nails when they grow? Why not leave it natural?

Why do we remove the weed in between the pavers in our backyard? Why not let it be natural?

The fact is the world around us needs constant work. Our capitalism is no different. It needs constant pruning or it becomes gluttonous. There was a book I think which said most people involved in illegal drug trafficking are barely getting by, most of the income is soaked up at the top. I don't remember the point the bio was trying to make but it feels like that way for any enterprise these days.

The richest people in the US have reportedly increased their net worth by over 1.5T over the course of the last year or so.

How is this sustainable?

vladvasiliu• 6 months ago

I think there's clearly a question of envy which doesn't seem addressed.

I'm not particularly in favour of high taxation, but I think that the argument is a bit more subtle than that. The general point is that "the ultra rich" are able to benefit from a whole host of loopholes which allow them to pay proportionally less than the plebs.

Now, this specific point seems somewhat debatable, judging by the fact that people don't seem to agree; I personally have not looked into the matter to form an opinion.

Maybe our tax code hasn't kept up with the financialization of the economy. In any case, this whole tax increase thing, at least as I see it in France, since to spill over to "regular rich people", as in engineers or similar who "just" have a relatively high salary.

Another issue, which I think is different but is rolled into complaints about rising tax rates is what the state actually does with the money. As in "I'm ok with paying tax, but not to fund this or that thing". In France, specifically, many "public service" offices have closed, having people either travel great distances or fight half-assed computer systems, while, at the same time, the number of public servants (so, cost) has increased.

palmotea• 6 months ago

One argument could be that maybe entrepreneurial personality traits aren't normally distributed, and unless you find a way change people's personalities in mass, the imbalance in wealth attraction will remain inherent.

Luck always plays the biggest role. Maybe the billionaires would have always been successful in some way, but not be a billionaire or even a millionaire.

Also, your argument sounds like a just-so story designed to support the status quo.

the imbalance in wealth attraction will remain inherent.

Is is really a good idea to be ruled by the people with the greatest "wealth attraction?"

Then you might ask, if that's true, do you I want to enforce equality, potentially dragging down the economy to mediocracy (for example many stagnating European economies) or maybe accept that current nature does not meet our societal desire for equality.

Yes, because regardless of anything else, the wealth imbalance has been politically destabilizing. Your comment strikes me as out-of-touch quantitative thinking: making certain easily-measured numbers going up the highest goal, while ignoring other things that are harder to quantify. That's a blind spot shared by a lot of people, especially tech people.

RGamma4• 6 months ago

There's many shades of grey between financial laissez faire and enforced equality. This entire "taxes are theft/unnecessary" (and frankly extremist in the neutral definition of the word) thinking is destroying the US politically and socially right now.

Do you not see this? Probably because you don't feel it in your pocket (yet, let's see what happens when the USD crashes. I will feel it too, no doubt.)

There's the belief that the economy can be a mighty tool to improve our lives, but isn't it going pretty much overboard since some time? Is this materialistic growth-at-all-costs ideology really making average US lives better these days?

From the outside the US feels like a runner that is stretching its arm towards the finish line (total automation) while also falling on their ass.

koe1232• 6 months ago

Then the next question is why does wealth, in practically all industrious countries seem to distribute disproportionally and not uniformly?

Compound interest, and as (admittedly) an armchair economist I buy into the argument that goes along the lines of:

"when the rate of return on capital (r) is greater than the rate of economic growth (g) over the long term, the result is concentration of wealth".

In my view, r has been greater than g for some time now.

Then you might ask, if that's true, do you I want to enforce equality, potentially dragging down the economy to mediocracy (for example many stagnating European economies) or maybe accept that current nature does not meet our societal desire for equality.

To me, it is clear that while Europe optimizes for quality of life to a large extent, Americans really drink the coo-laid and enthusiastically optimize for shareholder value. I highly encourage you to give life in Europe a go at some point. I hope you'll return (or stay) also having reached the same perspective.

dv_dt4• 6 months ago

Look for the Sugarscape model research studies. With uniform equally distributed starting point, fairly unbiased rules, and a set of random early wins, large disparities tend to accumulate over time without active policy to counteract it.

jibal5• 6 months ago

One argument could be that maybe entrepreneurial personality traits aren't normally distributed

That's not an argument, it's a completely counterfactual assertion ... or rather, the assertion that this is the cause of uneven distribution of wealth.

Then you might ask, if that's true, do you I want to enforce equality, potentially dragging down the economy to mediocracy (for example many stagnating European economies) or maybe accept that current nature does not meet our societal desire for equality.

But of course it's not true, it's just an attempt to justify a morally bankrupt sociopathic ideology.

rawgabbit• 6 months ago

You could have asked the same question when slavery was legal. Why is slavery not evenly distributed. Social injustice has been the default since the beginning of known history. Social justice is something that has to be fought for.

1718627440• 6 months ago

Because a tree has better access times than a list, so some amount of hierarchy results in a better performance than unstructured set of individuals. As directing people means more available work force for ones goals, and money represents ability to do something and availability to resources, some people will have more money than others.

gruez4• 6 months ago

Organizing your country with more sustainable growth where income disparities aren't so high means you don't have this problem to this extent.

Sounds like US vs Europe. Having redistributive policies funded by taxes works well until your most productive people flee for a country that doesn't, and you steadily lose ground to competitors economically.

ozlikethewizard2• 6 months ago

Americans like to act like they've beaten European nations in some kind of battle, but is the purpose of a state not to provide the highest quality of life, safety and health to its citizens? Not try to make the biggest corporations? In which case, even taking the whole of Europe as an average (which you shouldn't), by every metric beyond GDP its ahead.

Yizahi3• 6 months ago

The thing is that Europe doesn't have much redistribute policies. Everyone at around lower rank manager or middle developer are landing in the highest tax bracket in most of the countries, and pay as much tax as rich people. And almost every tax raise is usually targeted at these barely middle-class people.

dns_snek4• 6 months ago

Except for the fact that despite popular belief, this doesn't actually happen. Not even among millionaires.

https://taxjustice.net/press/millionaire-exodus-did-not-occu...

Lionga2• 6 months ago

Countries in which the income disparities ARE so high are also the ones where the "poor" are the richest. They just feel poor in comparison not in absolute terms.

70K a year is poor in California, but top 1% rich in almost any country in the world.

Low income disparities are countries like Albania, Afghanistan, Armenia to name the first three with below 30 GINI income.

samiv5• 6 months ago

This is an anomaly and left over from the time when middle class was growing after the 2nd world war. We (Western countries) are dismantling all the back stops and the process will reverse and move all the wealth to the few rich people in the capital class. When this process is complete the poverty levels in the west will equal those of the countries you mentioned, Afghanistan etc.

The USA and UK are leading the process since they started to pursue this goal aggressively during the 80s with Reaganism and Thatcherism.

dns_snek4• 6 months ago

And this is exactly why nominal $ amount comparisons are completely pointless. Someone who makes $70k in southern or eastern Europe is living like a king (or living at least good life anywhere in Europe) while someone making $70k in expensive parts of California is going to struggle.

Wealth is equal to your share of the overall resources, $ amounts are just an abstraction.

m4633• 6 months ago

your post has a mistaken question.

The actual question is: "If we tax tax them, will they leave? (losing the planned tax revenue/backfiring)"

It is pretty easy to avoid state taxes - just move to a different state.

Balinares• 6 months ago

Research shows that they mostly don't, for all the screeching about it. https://www.asanet.org/wp-content/uploads/attach/journals/ju...

rayiner9• 6 months ago

Taxing billionaires isn't "necessary to raise enough tax revenue." Total personal income in the U.S. is 26 trillion annually: https://tradingeconomics.com/united-states/personal-income. For the most part, that's real money that reflects goods and services in the real economy.

The increase in wealth of billionaires in 2025 was $1.5 trillion: https://americansfortaxfairness.org/billionaires-1-5-trillio... Most of that isn't even real money--it's people betting on AI. (As an aside, is the government going to give huge tax refunds when the AI bubble bursts and all that "wealth" disappears?)

If the U.S. just taxed people the way they do in Germany we could raise trillions in revenue without resorting to tricks like one-time wealth taxes. The focus is on billionaires because Americans want a German-style welfare state without German-style taxes on the middle and upper middle class.

port11• 6 months ago

Countries with low inequality tend to have strongly progressive taxation systems — Belgium, Sweden, Finland, etc. The billionaire class isn’t a necessity, it’s a failure of morality to overpower the affordances of hyper-growth capitalism.

dzonga2• 6 months ago

at one point Taxes in the US were 70-90%.

did the people ever leave ? NO

mcntsh3• 6 months ago

You could argue that the world is way more globalized today.

servo_sausage• 6 months ago

Kind of a false statement; on paper it was higher, but the exemptions were also significantly much bigger and more nakedly biased.

So it's not like it was actually a tax on the wealthiest, more a targeted tool to apply state power.

gruez4• 6 months ago

at one point Taxes in the US were 70-90%.

That figure is highly misleading to cite by itself because the high tax rate also came with a bunch of loopholes and exemptions. That's why despite the drop in the headline rate of 70-90% or whatever, the actual tax take as % of GDP has remained remarkably steady in the past 7 decades.

https://fred.stlouisfed.org/series/FYFRGDA188S

jungturk• 6 months ago

This chart shows total tax receipts as a percent of GDP, which doesn't seem to address the poster's contention that historically the rich paid a higher share of those receipts through elevated marginal tax rates.

m4633• 6 months ago

you can leave state taxes.

For example GWB "lived" in texas the whole time he worked in washington.

dzonga2• 6 months ago

now that's next level scumbaggery

sschueller2• 6 months ago

If the OECD decided collectively to tax them there is no where to leave to. They decided on a minimum global cooperate tax, then they can do that same for those 1%.

Of course there are still countries where one could park their money outside the OECD members but many of those are not exactly a "safe" place for such assets.

rswail3• 6 months ago

They tried, Trump rolled it back.

shrubby2• 6 months ago

Local wealth tax works to some extent, but some will dodge as long as this is not universal.

But universal is what we need as humanity.

The will seems to be building up, even in the UK (Polanski) and US (Mamdani, AOC, Sanders).

I'm betting that the success will be replicated in other countries soon and after that its only a matter of time for this to go global.

But this will be interesting show.

uqual3• 6 months ago

IMHO "this seems to be building up" in the US is a bit of an overstatement.

Mandami, AOC, and Sanders are the laughing stock of much of the electorate in the US. They are fairly popular in progressive population centers but not elsewhere. There have been activists promoting much the same ideas for my entire life (and I'm not young!) and they rarely if ever get national traction.

The "silent majority" in the US is just that - they don't make the news because they, in most cases, don't go out and protest and engage in battles with law enforcement. They have jobs, go to work, go home to their families, and vote - but they rarely are seen in the news any more than the fact the sun came up in the East and set in the West yesterday is "newsworthy" enough to be promoted in the media. "If it bleeds, it leads" is the criteria for being newsworthy.

shrubby2• 6 months ago

The silent majority, also know as the banality of the evil, is waking up.

Until masks and Musks we're taken off this year it was possible to pretend that the normal would play into their hands, as long as they stayed silent and played along.

Now pretending that the middle class can survive under the zillionaires Reich is only possible for very delusional minority.

My hunch is that Mamdani and Polanski have struck this nerve. Already before the events in Minneapolis, but now the support for this is dwindling.

I've done some experiments here in the normal and even the well off people are seeing the root cause. And it being the narcissist individuals holding godlike power, instead of the good ole "rule based" or "value based realism" or "systemic change" or even the latest "superorganism".

But remains to be seen, I might be wrong or even worse the power can be so centralized to zillionaire cliques.

slipnslider• 6 months ago

will be replicated in other countries soon

Hasn't this already been tried numerous times in numerous countries already? Didn't France attempt it multiple times without success and actually lost tax revenue with the creation and enforcement of the tax? Not to mention the wealth flight?

GenerWork• 6 months ago

It's already present in Norway. Here's a report on how well it's working [0]

[0] https://www.brusselsreport.eu/2024/09/11/the-failure-of-norw...

samiv5• 6 months ago

In a healthy economy flow of money is like the flow of blood in the arteries. It is what stimulates the economic activity. You can't earn a dollar without someone spending that dollar. Spending = earning = economic activity.

People are always defending rich people (capital owners) that they invest their wealth. But actually if someone has a billion in the bank the fact that they have that billion is a proof that they didn't invest it. (If they did spend it or invest it the would not have it, now would they?)

A billion that circulates in the economy is much better than a billion that sits in someones bank account. Someone who spends 100% of their income is much better economic citizen than someone who doesn't.

trollbridge• 6 months ago

A billion in the bank is invested - that's how fractional-reserve banking works. And people that wealthy don't really just put their money "in the bank". They usually invest it in riskier things.

I would hesitate to call consumption "better" than investment.

Tarq0n• 6 months ago

Sort of, with at least two caveats.

1) velocity of money matters, some spending creates more economic activity than others due to re-spending.

2) Investment is not the same as having your money sitting idle. Investment makes certain activities possible because of scale, payment made with the expectation of future value, financing capital goods or R&D, etc.

TheOtherHobbes• 6 months ago

There are literally two economies - the one most people live in, and the asset owning economy which deals exclusively in land, property, resources, and shares.

The health of an economy is defined by the permeability of the border between those two classes, and the direction of flow.

If the flow is mostly one way, you're getting wealth extraction, not investment.

But assets are not easy to move. So if you tax assets and not income, it doesn't matter where the owners are. It only matters where the assets are.

alpinisme• 6 months ago

Most wealthy people aren’t sitting with their money in the bank but in investment assets like real estate and stocks.

TonyStr• 6 months ago

Banks don't just keep your money in a vault when you store it in a bank account - that would be stupid both of both the bank and of you. Money looses value over time due to inflation, so banks reinvest 90% of your stored balance into loans, stocks, bonds, etc. This means that a theoretical 1B account, would allow someone else to take a 100M loan to fund a new venture. This is how banks make money, and they pay you a small portion of their profits as interest on your money (since they're profiting off it).

This is still not a good idea for you, as the interest doesn't make up for inflation. Most people keep a small portion of their wealth in the bank, as easy access for emergencies (this is called dry powder[0]). The rest is typically invested into private equity, which allows new ventures to be created.

It's very rare for anyone to have more than $50m in the bank. The money is usually out in the market doing it's work.

[0] https://www.investopedia.com/terms/d/drypowder.asp

samiv5• 6 months ago

The point of the story really was that most rich people, those who don't work for a living but live off of capital assets are in a position of economic power where their wealth accumulates. When the real economy grows a few percent per year but the wealthy gain 10-20% every year their wealth comes at the expense of everyone else.

This is the trickle up economy where the few people at the top suction all the wealth to themselves. And the rate at which they acquire it exceeds the rate at which they spend it.

nsoonhui• 6 months ago

Let's do a thought experiment and take it to the extreme: why not tax at the maximum?

We have already tried that in human history, it's called communism. No one is allowed to take private profit, everyone contributes to the best of their own ability, and everyone consumes according to their needs. It should be utopia because there is no wealth gap and wealth is maximally redistributed. Which is exactly what taxation is designed to do, only to the most extreme.

And I think everyone will agree with me that communism is a miserable failure. The rich may not leave physically but mentally they are checkout -- not willing to work as hard or take as much risk. So the answer is yes, if you tax them, most certainly they will leave physically for haven with lower tax, all things being equalled. Or leave mentally.

But not all things are equalled, so you can still tax them at a somewhat higher rate provided that you can provide other incentives. But still, too much tax will make it more likely for those who are able to to leave. This is almost an axiom.

samiv5• 6 months ago

Communism has never been tried at a large scale. Soviet Union didn't have it. China doesn't have it.

Just because someone has "communism" on paper doesn't mean the society actually functions according to the communist idea.

Social democracy has been tried in many places and it has produced things such as the Nordic Model and the Nordic states that have been very successful.

After the 2nd World War USA was very close to socialism. High wealth taxes, workers unions etc. As a result your average worker had a lot of purchasing power which of course fuels economic strength.

In fact many if the world's best performing companies are a kind of exercise in socialism since the RSU programs share ownership and results of the company to the workers (even if it's a small share)

RGamma4• 6 months ago

Okay so there is a globally optimal point/region of taxation that is not "maximum taxation". Where is it?

jbboehr• 6 months ago

https://en.wikipedia.org/wiki/Laffer_curve

_DeadFred_4• 6 months ago

Reminder when left to it's ways Capitalism reverts to company towns paying in scrip to make sure workers can't move away, so manipulating financial payout is very much within the Capitalist model and fair game in their ideology (only stopped by Government interference).

Capitalism's final form is a dystopian hellscape of rivers that can be lit on fire, unbreathable air, leaded gasoline, asbestos ceilings, company towns paying scrip, strike break private militias, opioid epidemics (wild this isn't a one time thing for Capitalism, but then the model for Capitalism seems to endpoint with getting people addicted to the product).

Everyone can agree pure Capitalism is a miserable failure that creates an unsafe environment and product landscape based on addictiveness. Time after time when left to their own choice, Capitalists chose making a worse world. The Capitalism model requires tight constraints from society to prevent Capitalists from creating an horrific, awful world like they have every time in the past when left unregulated.

The question is why do we make sure Capitalism can't destroy our rivers anymore, or pay workers in scrip (creating their end goal ideal of an inescapable labor system) but when they economically destroy the civil fabric with unequal wealth distribution we somehow refuse to step in? Capitalists long term will NEVER chose societal benefit, yet somehow we keep hoping they will and under regulating them. I remember when extremely liberal friends started getting their vested options and them excitedly talking about the whole loan model to not have to pay taxes, even though they 'supported' high taxes and knew the societal benefit.

sschueller2• 6 months ago

How about instead of taxing them any differently than now, we prevent them from borrowing against their assets? Force them to sell their assets and pay capital gains.

romanovcode• 6 months ago

The book about rules and regulations on this law would be larger than divorce law book.

jermaustin13• 6 months ago

Or better than that, loans backed by assets above some "jumbo" threshold ($10M?) triggers a capital gain on those assets in the collateral.

So if you get a $150M loan off of your amazon shares that on paper are worth $150M, but you paid $100M, you have a cap-gain of $40M, and at 20% tax, $8M fills the IRS's coffers.

uqual3• 6 months ago

This is something I've been in favor of for some time.

Obviously the tax basis in the assets would also be stepped up by this action.

The US should also get rid of the step up in basis at death. The recipient of an illiquid asset such as a family business should have a period of time (perhaps five or ten years from the triggering death depending on the type of asset) to "pay up" the tax basis "to market" at the time of death. Gains in liquid assets (such as publicly traded stock) should be taxed at the market value at the time of death by the estate or trust and passed on to beneficiaries with that adjusted tax basis.

m4633• 6 months ago

I think this would break all kinds of things, for example home equity loans.

orsorna• 6 months ago

Something like HELOCs would certainly be an exception.

The point is to disallow people who make a man's yearly salary every 60 seconds from getting <2% loans against an asset pool that would take hundreds of years for the average American to amass, if ever.

knowitnone32• 6 months ago

if not borrowing against assets, do people borrow based on their word?

dakial1• 6 months ago

This makes more sense. I hate when people talk about taxing the “net worth” of some rich guy when a good part of that net worth is locked into invested companies who are (hopefully) being taxed already. The borrow scheme should be the thing being taxed really, because is a shadow realization of profit (they are borrowing against the current value of their assets)

MSFT_Edging3• 6 months ago

The greater issue is we allow the richest to basically print money via their stock based compensation, which allows them to turn unrealized gains into loans backed by these stocks. They can spend that all they want to influence politics and wield illegitimate power. If they can spend this wealth, they can be taxed on it.

Make stock buybacks illegal again too. Overturn Citizen's United unless the head of the company can face charges for the actions of their company.

The concentration of wealth into the highest strata is a recipe for societal collapse seen multiple times in history.

gruez4• 6 months ago

The greater issue is we allow the richest to basically print money via their stock based compensation, which allows them to turn unrealized gains into loans backed by these stocks.

How's this different than if CEOs or whatever were paid in cash, and then they immediately bought stocks with the cash?

MSFT_Edging3• 6 months ago

Because you had an income to tax. The stock compensation is to avoid paying taxes on their income.

interestpiqued2• 6 months ago

This only works if stocks go up, up, and up. Otherwise they will have to realize gains at some point to pay off the loans.

I don't get why we have to jump all the way to a wealth tax, could they not just force asset backed loans to trigger a tax? This seems way more targeted and we won't have people assessing what everyone is worth. I think it would avoid some unnecessary precedent setting. They could put the impetus on the billionaire taking the loan to state what the assets are worth and related gains.

ozlikethewizard2• 6 months ago

While I think I actually support this, does capitalism not cease to function if you put barriers in place to prevent the growth of capital. Think trying to get that passed would be even harder than a wealth tax.

samiv5• 6 months ago

Also the way QE works is that the rich companies and individuals are the ones who can take out large loans against their previous economic assets as collateral and leverage that money in the market such as the AI bubble. They also are the first to spend the new money so the inflationary effects only kick in after they've taken out then loans.

The wage earners feel the inflation in their wallets.

taeric• 6 months ago

This hints at a major misunderstanding that, frankly, drives me nuts. If people are getting paid in stock, they pay taxes on the value of the stock they are paid with.

Can they take a loan on existing stock? Yes. You can leverage assets and this, itself, leads to some pretty unfair things. No need to inflate it to the idea that "getting paid in stock means you don't pay taxes."

ifwinterco3• 6 months ago

Short term: no

Long term: yes, especially if you combine really high taxes in the 40+% range with consistently rubbish public services

But the real question is not whether people will leave, the question is how many talented hard working people chose not to move to your country in the first place because your taxes were too high. It won't show up in any data, you'll just experience worse economic growth and have to tax everyone else more

thinkingtoilet3• 6 months ago

The answer is just no. Massachusetts passed a tax on income over a million dollars and despite the ads that were obvious lies, we have more millionaires now than we did a few years ago. Turns out, rich people like to live in places that have well funded infrastructure, good schools, a thriving art scene, etc...

ifwinterco3• 6 months ago

Yep people will pay rates in "high tax" US states where you're still only paying ~40% ish total income tax and they're really nice places to live.

That would still be considered a fair and reasonable level of tax by european standards.

Obviously there is a level though - if you made it 95% then people would leave. I don't think there's any reasonable argument that the level doesn't exist, the question is where is it for a specific place at a specific time

lucaspm985• 6 months ago

The correlation between higher state and local taxes (beyond some reasonable baseline) and improved public service is tenuous at best in much of the US.

I'm happy to concede Massachusetts may very well have found the right balance, but there's plenty of studies on this in aggregate.

There's unsurprisingly a modest but statistically significant migration of millionaires from high-tax to low-tax jurisdictions.

https://www.asanet.org/wp-content/uploads/attach/journals/ju...

hackeraccount• 6 months ago

To be brutal about it the question isn't a how many more millionaires. Say Massachusetts has 10 new millionaires. That's great. What if Florida has 1000 new millionaires? Suddenly 10 doesn't sound great.

To my mind it's a revenue maximizing question. Is Massachusetts hitting that metric right? I have no clue. I do suspect that the voters and the people advocating taxes like this in Massachusetts and California are not thinking in those terms. I think they are doing this out of some sense that anyone making that much has to be doing something unfair and that an inefficiency in revenue is just money spent towards fixing that unfairness.

ksec• 6 months ago

The problem with this question is they never mentioned or specified who is "they".

Especially in UK where The Rich that dont belongs to UK in the first place will of course move and leave. Those who are born and raised are highly unlikely to move.

And perhaps most importantly the question completely ignore the real problem. There isn't a lack of Tax revenue, but the government incompetence to allocate and use it wisely. To raise tax is just saying what we are doing now is absolutely correct and we will continue to do so.

Finnucane2• 6 months ago

Mass. passed a high-income surtax a few years ago, with the result that we raied a lot of funds for schools & infrastructure, and we atill have plenty of rich people. Wealthy people hate paying taxes, but after paying, they're still pretty wealthy. And, some of them like living in a state with decent schools, health care, etc.

https://www.peoplespolicyproject.org/2025/11/17/do-millionai...

mercutio2• 6 months ago

Wealth taxes are very, very different from higher income taxes.

People are mad about buy-borrow-die, so they’re proposing extraordinary new measures.

Personally, I’d just make capital gains taxes apply at the “borrow” stage to actually fix the problem. That would have a host of compliance issues but they’d be localized in the finance industry which already has an army of people figuring out compliance.

Finnucane2• 6 months ago

But they made exactly the same arguments against it, and it was bullshit.

SilverElfin• 6 months ago

There needs to be less concentration of wealth and power for our societies to work. Taxing the ultra wealthy should be a nationwide bipartisan project. At the same time, California isn’t the right place for this experiment because it will not solve the fundamentals problem of their government spending and wastefulness.

fzeindl• 6 months ago

They probably won‘t. I recently watched a talk (in german) with Julia Friedrichs, who wrote a book about millionaires and billionaires and did many interviews with them:

https://www.youtube.com/live/4HpJKPywXqY?si=bb-p558jl_otP25I

In her research she found that many of the ultra-rich people actually have deep/patriotic/nostalgic ties to their home/community and want to invest there. They often use certain tax-evasion measures because everybody else does and she argued that those few ultra-rich people who really just care about minimizing their taxes have already moved everything abroad.

epolanski6• 6 months ago

This made me research how much taxes would a wealthy californian pay assuming:

- 2.5M worth of real estate bought recently

- 1M of job income

- 1M selling shares that 10xed (some stock option idk)

- driving a 150k $ car

- spending 150k $ over the years in taxable goods

It came around 840'000 $ or around 40.1 %.

I wouldn't say it's that bad, this even includes sales taxes (probably the fairest of all taxes).

With even basic tax optimization (401k, federal deductions) you get that number down to 780'000 $, with something a bit more sophisticated depending on circumstances you can get it easily lower than 600k or 32% ish.

The biggest problem is that people above that tier end up effectively paying less sometimes even in absolute terms just by borrowing against their equity and not triggering taxable events.

Honestly taxes are complicated to implement, I'm not sure how can you implement a progressive yet fair system without loopholes and without severely degrading services (roads, infrastructure, education, healthcare, military, etc, etc).

And every time you decide to cut on services, you are just moving money elsewhere: more inequality -> more social tensions and criminality, you just end up paying way more to live in a safe place and pay for private and public security and prisons.

It's really difficult.

Yizahi3• 6 months ago

I can't say how much such a person should pay in taxes, but it is kinda funny that I'm paying the same amount 39.5-40% with my five digit salary and no property.

I don't know who should pay what amount, but I'm pretty sure that me and that millionaire should have different tax brackets. Let alone people with tens, hundreds of millions or more.

PS: I'm in EU, not USA, but here I'm in a highest tax bracket so the point still stands, my tax rate is the same as for any local millionaire. Maybe even more, since those people are aggressively utilizing tax loopholes, shell corporations and offshore tax havens.

apelapan3• 6 months ago

You pay the same proportion, not the same amount. 40% of 1M is 10x more than 40% of 100k.

Disregarding all technicalities about what proportion people actually end up paying after performing clever tax planning.

Why are you sure that someone earning 1M should have higher proportion of their income taken away than someone earning 100k?

At some sufficiently low level of income I think it stops making sense collecting taxes, but beyond that I'm not so sure from a fairness-perspeective.

I could perhaps get on board with a hard cap on wealth, for preserving democracy. It is dangerous to have single individuals and families attain too much power. But up to that cap, I don't see any inherent unfairness or inefficiency in that people of moderate to high wealth pay the same proportional rate.

pants2• 6 months ago

This doesn't seem quite right. Even using SmartAsset's income tax calculator for a city in California, I'm getting around a 45%+ tax rate for someone making one million a year of income.

It's actually pretty easy to pay an 80%+ tax rate in California if you consider taxes that your employer pays, sales tax (11%+ in some areas), local assessments, capital gains tax, etc.

epolanski6• 6 months ago

In cali capital gains are part of income.

Taxes paid by your employer aren't taxes you pay.

I'm quite sure your calculator is very basic and stops at 401ks and little more, there's stuff like mortgage interest, being married with kids, backdoor roth, etc.

But yeah, wouldn't change the number you said dramatically, maybe it would lower it to 45%ish on a 2M income.

ponector• 6 months ago

> taxes are complicated to implement, I'm not sure how can you implement a progressive yet fair system without loopholes

It's hard, but possible. However the goal of people who created current tax code is exactly opposite: to create system with loopholes.

US tax code is a mess, there should be less amount of different taxes, more unified taxes.

atmavatar• 6 months ago

sales taxes (probably the fairest of all taxes).

Just curious: what makes you come to this conclusion?

Pet_Ant• 6 months ago

I’m assuming they think that rich people spend more so they pay more. This is a fallacy, because poor people spend a higher portion of their income (over a 100% a lot of the time).

MengerSponge• 6 months ago

"The law, in its majestic equality, forbids the rich and poor alike to sleep under bridges, to beg in the streets, and to steal bread." -Anatole France

dillydogg2• 6 months ago

It's funny, because sales tax is considered among the most regressive form of taxation we employ from my understanding, which is supported by my econ friends. But I'm certainly not an economist.

_DeadFred_4• 6 months ago

I mean Capitalism's solution to labor movement is to create company towns and using scrip to prevent it's workforce from freedom to leave. Maybe we can apply similar Capitalist principles/established solutions in this scenario?

RobotToaster2• 6 months ago

I'm not sure how can you implement a progressive yet fair system without loopholes

Georgism, a single tax on the unimproved value of land

danny_codes• 6 months ago

Obviously, but then what would the feudal lords sorry I mean landlords do? /s

cbolton8• 6 months ago

Would that help in any way with the increasing concentration of wealth? It doesn't seem to be particularly tied to land.

paulsutter• 6 months ago

Just make borrowings above the basis taxable as gains, its not hard

popalchemist4• 6 months ago

Sales tax is one of the most UNFAIR, being a flat tax, it affects people in indirect proportion to their wealth (poorest hit hardest, proportionately).

epolanski6• 6 months ago

This is the only counter argument, and in fact the consensus is that they are the fairest (they tax consumption rather than production, we tend to tax producing wealth more than spending it) if you offer rebates or lower them on essentials (bread, milk, eggs, healthcare).

They also have the effect that everybody has to pay them, including tax evaders, tax loophole abusers, criminals with undeclared incomes, etc, everybody has to pay it.

But yes, without offering sales tax rebates or with taxing essentials then your argument is true and they become less fair.

Albeit, the elephant in the room is always the definition of fairness itself.

hcknwscommenter• 6 months ago

I agree with your overall point. But I find it odd that you consider sales taxes to be the "fairest". Similarly, I find it odd that you put "progressive" taxes in some tension with "fair" taxes. Folks in the highest income range arguably benefit the most from govt services (e.g., infrastructure, defense, R&D, rule of law). They also have a much higher ability to pay well beyond basic survival needs. And, they can reduce sales tax burden by saving versus consuming, a choice that is not available to lower-income.

JKCalhoun4• 6 months ago

I agree that a regressive tax like sales tax is not "fair" at all.

I had a coworker that argued for a flat tax—considered that fair. I explained that anything less than a progressive tax was going to make the poor pay more and the wealthy pay less. Really, that's fair?

You should be so lucky to have enough that you're in the highest tax bracket.

readthenotes12• 6 months ago

Even Georgism style taxes will face the problem that if the tax is high enough, it will be worth hiring some really smart person to figure out how to work around it.

Of course, you're also going to have to face the problem that representative democracy includes the ability to buy loopholes.

And then, there are unintended consequences because representatives aren't necessarily the most financially savvy. I'm thinking about the 401k program that disproportionately advantages high income people when it was touted as a savings route for middle class people.

OkayPhysicist3• 6 months ago

The 401k statute didn't actually grant any additional abilities to people: It set limits on a tax dodge you could already do. If I'm a CEO at $MEGABUCKS, and I make vastly more money than I need each year, I'm paying in a high tax bracket. I could instead strike a deal with my employer: cut my pay in half, and then keep paying me after I stop working here (pausing payments if I get another job), until the difference between what I would have made and have made is eliminated. All perfectly legal. But what I've done is taken money that was destined to taxed at a high tax bracket, and deferred it into a lower one (by spreading it across multiple years).

401k identifies this loophole and sets limits. Setting contribution caps, limiting withdrawals until retirement, etc. Then they incentivized offering it to the poors, too, because working out an ad-hoc agreement like that is the sort of shit only really high power people in a company have the opportunity to do.

In short, the primary purpose of 401ks wasn't to benefit the middle class, it was to slightly reign in the rich.

knowitnone32• 6 months ago

California is not a safe place

Bolwin• 6 months ago

Compared to?

JuniperMesos2• 6 months ago

And every time you decide to cut on services, you are just moving money elsewhere: more inequality -> more social tensions and criminality, you just end up paying way more to live in a safe place and pay for private and public security and prisons.

There's no reason to think that the amount of taxpayer-funded services in a political jurisdiction has inversely proportional relationship with amount of crime that that happens there (nor any particular relationship with what kinds of crime, how serious the specific crimes are, and so on). Same thing with social tensions - social tension are caused by a lot of things, many of which aren't particularly related to the raw amount of taxpayer-funded services that exist. Would a more redistributive welfare state have made the partition of India between (mostly) Hindus and (mostly) Muslims less likely, for instance?

epolanski6• 6 months ago

There are multiple social studies linking welfare with security.

https://ideas.repec.org/p/cge/wacage/548.html

https://www.researchgate.net/publication/263466102_An_analys...

https://www.sciencedirect.com/science/article/abs/pii/S00472...

arjie2• 6 months ago

Selecting the precise threshold where a marginal point kicks in is pretty funny, though I'm sure you didn't intend it. Above a million there's also the MHSA tax. Marginal at over a million is 50% or more unless you optimize.

cherrycherry98• 6 months ago

I also like the idea of sales taxes over income and especially wealth taxes for a number of reasons.

1. It limits the opportunities for the government to use force on the general population. Today, if you do not file your annual taxes, men with guns come and put you in jail. A sales tax does not require this level of enforcement to be inflicted on the average citizen.

2. It's voluntary to a degree. Today if you don't like what the government is doing and want boycott paying taxes you cannot practically do so because of point 1 above. With a sales tax you can decide to defer unnecessary spending as a form of protest.

3. In theory it's vastly simpler to reason about and plan for. The myriad of tax advantaged accounts that have proliferated over the years in the US is daunting: IRAs, 401k/403b, 529s, FSAs, HSAs, Trump Accounts, Roth variants. We ask citizens to best guess how to allocate investments between these vehicles for goals decades in the future. If you need emergency access you're often looking at paying penalties. Not to mention the poor user experience baked into many of the designs. 401ks put the burden on your employer to restrict your investment options to their curated choices and their chosen plan administrator. You have to leave your job and roll it into an IRA to finally have the freedom to pick your own investments and who you have the account with. FSAs have the annoying use-it-or-lose-it rules. 529s are bizarrely state sponsored but you can choose a plan from any state. Like your state's plan but want to have the account at your broker? Too bad, you have to use the administrator your state chooses.

4. It's widely understood that if want less of something you should tax it. By taxing income and wealth it discourages work and saving. A sales tax discourages consumption instead, which encourages saving and is also pro environmental.

5. Changing asset allocation is free. Today, changing investments in a taxable account, where there are gains, triggers a taxable event. This discourages the movement of that capital to other investments.

6. In theory it's harder to dodge taxes as the simpler system has less loopholes.

7. On average, people with more wealth should have more expensive lifestyles which translates to them paying higher taxes.

I understand the arguments that sales taxes are regressive, let rich people dodge taxes by living frugally, etc. I accept all that may be true and I'm ok with it. Many seem fixated on using the tax code as a mechanism to level inequalities, as if that were its primary function, and a sales tax doesn't advance that goal enough for them. I think I can accept that some people are going to be vastly wealthier than me and are going most likely live a much easier life because of it; much like I can accept that some people are going to much prettier than me, taller than me, less genetically disposed to certain medical conditions, have been born to better families/circumstances and those things can all provide significant advantages in one's life.

JackSlateur5• 6 months ago

But tax may be easy to implement

I think reversed-VAT is the good way to do

The overall idea with VAT is that you are taxed when you buy things

The reversed-VAT is the idea that you are taxed when you earn money (not "income" as in "salaries": every time some wealth are earned somehow)

Fixed rate, money's origin is of no concern, nor is money's usage

Say, you have a 40% tax on everything (using the same rate is important): - your company sold random stuff: you keep 60% - you earned money from interest / investment / etc: you keep 60% - income from your job: you keep 60% - a gift from your uncle: you keep 60% - inheritance: you keep 60% - exchange some money between your companies: you keep 60% - you borrow something: you keep 100% (it will fall back to 40% tax if that borrow is transformed into a gift) - you earned something of value (non-money gift), in one form or another: you have to pay 40% of its value

The root of all evil is the thinking that tax are made to make "a better world", that it is a tool a (social) justice or whatever

But it must be the same for everybody. Because only then it can be simple. And the more complex it is, the more loophole you have ("whack a mole" style as we have today)

Now, one person could keep all his money. Is it an issue ? No ! First, because he would have been taxed to 40% already. And then, because everybody dies someday. And that day, 40% of this person's riches will be retrieved: which would, again, be nice to the society as a whole: it would damage multi-generational wealth (while not void it).

fundatus• 6 months ago

Do people move solely because of property taxes? They rarely do unless they are in financial distress. So I'd say: Give it a try.

interestpiqued2• 6 months ago

Billionaires tend to have multiple properties in multiple states/countries. This is more a residency issue and probably low friction for them to change states personally. The thing holding back would be where their business and employees are located.

JKCalhoun4• 6 months ago

If they're not paying their fair share of taxes in the state anyway… then okay, goodbye, I guess?

Hizonner• 6 months ago

It's worth a shot.

mlhpdx• 6 months ago

I don’t want to believe for a second anyone would walk away from Silicon Valley because of being taxed. The impact on the calculus of reward simply doesn’t make sense. On the other hand I am always surprised by people and the strange things we do.

uqual3• 6 months ago

Most people, by count, of course would not leave because of the wealth tax currently being proposed in California as it targets just a tiny segment of the population - current estimates are that less than 250 Californians, or less than 0.001%, would pay the currently proposed statewide wealth tax. The other 99.999+% would not (yet) have to pay a wealth tax. However, the <0.001% that (esp. the wealthiest among them) who would pay the wealth tax would be motivated to move.

Unfortunately for California about 40% of the total state income tax collected (which accounts for about 65% of the state general fund) is paid by the top 1% of income earners -- which includes those 0.001% who will be motivated to move by a wealth tax (or even merely the threat of one).

The <0.001% number appears to be based on population _before_ several billionaires moved out before Jan 1, 2026 - likely at least partially motivated by the small, but real, risk of the "billionaire's tax" qualifying for the ballot and passing (and that proposed tax is only "temporary" and is only a total of 5% over three years so isn't nearly as alarming to the wealthy as a "permanent" tax would be). If it looks like this measure will end up on the ballot and have a chance of passing, expect many more to leave. This will, even if it does not ultimately pass, erode the income tax base.

California has rebelled against wealth taxes in the past - most notably by the passage of Prop 13 almost 50 years ago (a property tax is a wealth tax). They are not popular except when the hit "the other guy" -- but "the other guy" is the one most able to avoid the tax.

Wealthy people are typically very flexible as to where they live. They often already own multiple homes and often spend a lot of time out of the state they "live" in. When they move, they are not packing and labeling their own boxes or are likely even present on "moving day". They also are more likely to set up HQ and shop near where they spend a lot of their time. Even if they have family in California, they can still get together with them for Thanksgiving dinner -- either by flying the family to them on their private and chartered jets or by themselves flying to California for the weekend on one of their jets. They can conduct most business very efficiently remotely and often do so now to a significant extent.

It only takes a few to leave to tank the California budget - likely causing the progressive income and wealth taxes to reach deeper and deeper into the upper middle classes as California desperately tries to balance their budget without cutting yet more programs.

Other states are loving this though and will cut tax deals to attract these very billionaires that California are encouraging to leave.

charlieyu13• 6 months ago

People walk when they don’t make money. You don’t look at Silicon Valley for these types of things. You look at a deprived forgotten town that could had survived were they not squeezed so much

klasko• 6 months ago

yes

rayiner9• 6 months ago

The article asserts that, since this is a one-time tax, billionaires will have no incentive to leave: "The tax’s designers, however, think they’ve come up with a clever solution to capital flight: a one-off tax that is retroactive, based on a billionaire’s residency status on January 1, 2026. In other words, unless they’ve already fled the state, billionaires won’t be able to move to avoid paying the tax. 'At this point, there’s no financial incentive to leave California,' Zucman said. 'You’re going to pay the same amount either way.'"

That misses the point. A one-time wealth tax to plug holes in the state's finances reeks of short-termism and desperation, like Chicago selling off its parking meters. Even if I wasn't affected by the tax, I'd be alarmed at the implication. It would have been much better to implement a well thought out and orderly recurring tax on capital gains or whatever.

jleyank• 6 months ago

State taxes can be dodged by moving. Federal (US) taxes are supposed to be filed each year no matter where US-ians live. They can work games to not pay the US but that either requires "no formal income" or living where taxes are higher than the US.

Or, I guess, just don't deal with the US and either don't go there, or hope to not get caught.

peyton• 6 months ago

If you read the article, the author frames the discussion around a retroactive tax in California applying to those resident in California as of January 1, 2026 so that it cannot be dodged by moving. Also, the words “US”, “US-ian”, “American” appear zero times. The word “federal” appears one time.

I think this comment is a little off-topic.

everybodyknows• 6 months ago

Those who pay the tax will assume the "one-off" label is false: if it works once, it will be repeated.

On my block alone, are the houses of (at least) two "49-percenters". 183 or a few more days of the year the owners are at their second homes in Arizona or Nevada, and gathering gas station receipts to prove it, while their California houses sit empty -- all just to avoid our state income tax.

How about that as a poster-child for misallocation of physical capital?

marcosdumay• 6 months ago

Last time I checked, rich people tended to not be very cost sensitive.

rdtsc• 6 months ago

Start-ups and venture-capital investment could begin to flow to lower-tax states; the next hub of technological innovation may end up being seeded in Austin or Miami instead of Silicon Valley.

There is another agent (group of agents) in this game and that's other states. Those states are often modeled as passive background places one can move to, but they are often not. They can, and do, react to tax laws in other states. For example, TX could encourage capital flight by offering tax breaks.

I've seen this happen with some companies in Midwest: as the states had to raise taxes some Southern states decide to poach individual companies and offered them to move their HQs there with a bunch of tax rebates and credits and such.

The tax’s designers, however, think they’ve come up with a clever solution to capital flight: a one-off tax that is retroactive, based on a billionaire’s residency status on January 1, 2026.

That is pretty clever. They could also have an "exit tax" -- "leave but if you've been here for 10 years making your billions, we'll keep some of those billions" kind of a deal.

jibal5• 6 months ago

Corporations and billionaires routinely lie in order to maximize their wealth. After all, why not ... they aren't bound by scruples.

ggfdh• 6 months ago

That left a roughly $20 billion annual shortfall in California’s health-care budget. … In response, one of the state’s largest health-care-employee unions teamed up with a group of progressive economists and lawyers to come up with a way to make up the difference: impose a one-off 5 percent wealth tax on California’s billionaires.

It’s wild how dominant this proposal is. Not reducing costs. Not cutting benefits. Not a broader tax increase. Not a combination of ideas. Just “f*k these guys in particular.” If this is what passes for governance in California I’d leave too.

thunderfork• 6 months ago

Why would a state's worth of people give up health care so that billionaires could retain more assets?

theendisney• 6 months ago

Seems a good investment. ROI is obvious and guranteed. Some might prefer progressing [say] add/fin tech over heathcare but it seems fine to ignore. Its not like they are really suffering.

There is a disrupt joke inthere but i cant think of it right now.

gamblor956• 6 months ago

Years ago I had a client, a European billionaire, who moved to California because the taxes were "so low" compared to his home country. (The difference was only a few percent, and yes he had lived in Vegas with its 0% income tax before moving to California.)

He's still here, and unlike the PAB SV billionaires, he has no plans to leave because he's seen what places with no/low taxes are like. (TLDR: they have low taxes because nobody would want to live there otherwise. )

Acrobatic_Road• 6 months ago

He doesn't sound very smart.

mips_avatar• 6 months ago

All these billionaires are comparing their problem to difficulties Norwegians have managing their finances with the wealth tax there. The difference being that the wealth tax in Norway kicks in after a few hundred thousand dollars of wealth so regular people actually contend with it. Like even the most successful startup founders likely won’t ever pay the wealth tax before reaching a liquidity event.

rekabis• 6 months ago

America in the 1950s had a 90% tax on the top tier. No-one of consequence fled the country.

No matter how you tax, the asset-owning class is almost guaranteed to remain in place, because the vast majority of their assets are physical, and cannot be easily moved except at much greater expense than any tax.

I mean, if offshoring took 75 years to achieve, what makes you think that any member of the Parasite Class will be able to pack up and leave within a decade, much less a half decade?

It costs ridiculously insane amounts of money to move a business down the street, and you’re keeping the same employees, and not re-training an entirely new batch of replacements in the new location.

About the only “asset” that can “leave” with anything approaching sub-decade immediacy are the purely digital ones, with a business that is 100% Internet-based and without any physical assets of any kind, where you can spin up a new offshore server and migrate the services to it with just a few mouse clicks.

And those are vanishingly few in number. Most so-called “Internet companies” still have oodles of physical assets, from offices (where return-to-office mandates force employees back into) to land to physical servers sitting in data centres.

And in the end, we have the most telling question: what is the difference with the wealthy leaving due to a tax, and failing to implement that tax in the first place?

NOTHING.

There are no downsides, only upsides. Either they leave and open up room for another entrepreneur to thrive in that spot, or they stay and pay the tax.

Either way, nothing of value is lost by wealth taxation.

ImJamal2• 6 months ago

What percentage of those in the top tier paid anywhere close to 90%?

lwhalen• 6 months ago

Why not abolish all taxes and have the Treasury/Fed print the difference every year?

greyface-• 6 months ago

This would push inflation above the Fed's target rate.

ImJamal2• 6 months ago

Inflation would increase which would increase costs impacting primarily the poor and middle class

jaimex2• 6 months ago

If their accountants and financial advisers tell them to of coarse they will.

Furthermore given whats at stake you would divert 1/10th of those funds to making sure that act never passes.

weare138• 6 months ago

No they won't, at least not for long. Every company that tries it immediately learns what those taxes were paying for. Go ahead, try running your tech company in a state with no infrastructure and see how that works out for you.

angelfangs• 6 months ago

It's all fun and games until it affects one's bottom line. Similarly to AI, only now are progressives in the position of being the naysayers because it affects them directly. Everyone has their agenda (and that's okay to a point), but the moral posturing about these types of issues is sickening.

kghrhgf• 6 months ago

sure is easy to get sickened by strawmen

If you tax them, will they leave?

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