Tech billionaires are making plans to bail on California ahead a possible ballot measure that would tax their assets to help pay for healthcare.
Sources told the New York Times that venture capitalist Peter Thiel has explored spending more time outside California and opening an office for his Los Angeles-based personal investment firm, Thiel Capital, in another state.
If you’re rich beyond imagination, why nog pay taxes?
Because all they have left is hoarding wealth and the fear of losing some of it. They’ve become the movie or book trope of the withered miser who is completely consumed by greed and has nothing else. Unfortunately most of the real misers don’t get any comeuppance while the fictional ones do.
I think we’ve allowed the rich people dick measuring contest to go on for too long. All these guys care about is the imaginary number next to their name is higher than the other guys. Greed yes, but competition, game, sport, between psychos…also yes.
Liquidity issues.
For example, loads of elderly people in California own homes that have very low property taxes which were assessed decades ago. If their property values were re-assessed today they wouldn’t be able to afford the property tax and would have to sell their home and move (possibly flee the state).
Now that’s not the situation these billionaires are in. They aren’t tied up in a single house they’d have to sell. Their issue is that they’d have to sell a lot of stocks to pay a wealth tax, an event that could trigger a huge market drop in the price of those stocks.
You can be extremely asset-rich while being relatively cash-poor. I say relatively because these billionaires likely have millions in cash sitting around but that might not be enough to afford tens of millions in taxes every year (which must be paid in cash, not stocks).
I’m one of those people who’s a bit asset-rich while not at all cash-rich. I’m not whining to anyone about it, that’s the way I arranged things, and there were benefits to it as well as risks. I saw the tradeoffs and made my choices. I can always sell one of the properties if I need to, or take a bit more of a mortgage on it (my overall debt/equity is about 18%, so mortgaging is easy). But people with more are more able to pay, regardless of their asset-allocation choices. The whole “granny starving in a $3M house” story is a malicious crock of shit that only a fool would fall for.
And same with those billionaires. In fact, their asset allocation challenges don’t mean a fucking thing to me. They’re filthy rich due to a broken, crooked system. In a sane, healthy society there wouldn’t be billionaires at all. So a correction is needed. They can take a haircut or they can face a much more extreme reckoning in the future. Up to them. And if they want to up sticks and move to Dallas, that’s their choice too. They can go be parasites on a less aware host.
I’m not whining on their behalf, I’m warning that this approach to taxation will not hit the intended target. Billionaires whose assets are mostly concentrated in stocks have no reason to make California their primary residence. They can live anywhere in the world and if forced to they will do so.
If you want an effective tax on tech billionaires you should find a way to tax an asset they can’t move: intellectual property. That’s where all tech billionaires ultimately derive their wealth. I personally am against IP altogether, but I’ll take an IP tax as a consolation prize.
It goes without saying that land value tax is another tax on assets that can’t be moved. I also want to see LVT tried.
I’ve seen the “one person selling lots of stocks in an otherwise healthy company to raise cash tanks the market” claim repeated so many places as one of these “everyone knows this, it’s obvious” facts, and yet it never seems to play out that way to any meaningful degree. It’s one of the many Big Lies of capitalism that we’ve just been tricked into accepting.
You might occasionally see a minor one day dip of a few percent at worst, and even then they’re usually caused by some underlying issue unrelated to one person’s need for liquidity.
Yeah it’s one of the classics. In reality, the rich liquidate stocks all the time, particularly large amounts might not always be able to be dumped on the market immediately in one go but well, then it’s simply done over a certain timespan, but generally speaking it takes quite a lot before the market “cares”.
I think it’s that a large pool of stocks going up for sale with no context seems suspicious. Stocks are inherently a gamble on the future price will be higher than current price, so by selling you’re withdrawing your bet which could be interpreted as you knowing that the bet won’t pay off and that other
gamblersowners paying attention might panic and try and sell too, which then could trigger a feedback loop. New buyers might see a bunch of people trying to sell and then think to themselves the bet isn’t a good one and won’t buy, making the current sellers reduce the price in the hopes of actually selling off and not left holding the bagA lot of “could” and "might* in that scenario, and it does play out from time to time (see NFTs, 2008 housing market). It also won’t play out if the reason for the sale is known and isn’t based on lost faith of the bet
Brilliant classic example of exception proving the rule. Both NFTs and the 2008 crash were caused by a massive lack of fundamentals, not irrational shareholder panic based on a few unknown selloffs, so the fact that those are the examples you came up with of big crashes just shows how weak the original claim was.
Apart from anything else, it doesn’t even stand on its own terms - if billionaires were required to pay wealth tax bills, then there wouldn’t be any mystery as to why they were selling their shares.
The taxes aren’t on one person though, they’re on everyone. Everyone looking to sell their stocks at tax time => price goes down because no one is looking to buy.
If their portfolios were properly diversified, you wouldn’t see that effect on the overall market.
No. Obviously they wouldn’t wait en masse until tax time to sell on the same day. If you knew everyone was going to sell their stock at the same time, wouldn’t you sell yours first before the prices started plummeting? And by the same token, if you knew there was going to be a load of selloffs at the end of the tax year, wouldn’t you wait to do all your buying at that time?
There’s just way too many pressures in both directions for what you claim to be a plausible scenario.
And yet everyone waits until a few months before tax time to put their money into RRSPs. I have seen it first hand. The money just floods in.
It doesn’t have to happen on one day to move the price. Prices move whenever there are more buyers than sellers or vice versa.
This is so completely irrelevant and grasping at straws that I don’t think you’re even talking in good faith any more.
5% is a pretty high wealth tax, so I actually find this credible.
As rough as property tax can be, 5% would be crazy. Imagine being told you owe 25,000 dollars because Zillow shows houses near you selling for 500k…
I prefer the concept of stock secured loans counting as income.
I mean I’m middle class and could afford this… sure I wouldn’t be happy about it but the idea that it would be so onerous on literal billionaires seems absurd.
the issue isnt being taxed…it’s knowing with 100% certainty that your taxes are just going to pad the pockets of some rich fuck somewhere instead of back into the public good (like taxes are supposedly for), something that’s true under both dems and republicans, dems just atleast put on a believable veneer
there’s a dozen different ways to grab the $ back from these motherfuckers, the biggest issue there is the US’s halfassed federal system gives em 50 different ways to weasle out and ratfuck safely from somewhere else.
Did you just swallow the hook and line, or the sinker too?