tequila4kapp said:

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Bezos and Musk are smarter than 99% of us, have done amazing things and deserve their rewards.

You may well be right that we are on the cusp of such a plan. That movement will fail, as it always does, because the definition of "rich" is always adjusted down to capture more wealth to cover additional spending initiatives; and too, the plans fail because they never account for dynamic human behavior to avoid paying 'excess' taxes.

Notice that CA's tax the billionaire plan taxes billionaires not for what they actually own but for the percentage of companies they exercise voting powers over.

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dajo9 said:

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tequila4kapp said:

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Bezos and Musk are smarter than 99% of us, have done amazing things and deserve their rewards.

You may well be right that we are on the cusp of such a plan. That movement will fail, as it always does, because the definition of "rich" is always adjusted down to capture more wealth to cover additional spending initiatives; and too, the plans fail because they never account for dynamic human behavior to avoid paying 'excess' taxes.

Notice that CA's tax the billionaire plan taxes billionaires not for what they actually own but for the percentage of companies they exercise voting powers over.

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It's not true that it always fails. Look at tge Progressive Movement and soon after the FDR legacy. Huge succeses we live by today.

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socaltownie said:

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I am increasingly thinking we are about at a Bernie/Warren inflection point were we really will get some serious "soak the rich" plans. I am not expecting revolution but I could see it.....

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DiabloWags said:

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If anyone believes that the CA Billionaire Tax, which was created by the SEIU would only be a "one-time" tax on the uber rich, I have a bridge that I want to sell you down in Arizona.

And how do you go about valuing assets that have not undergone any transactions is a slippery slope.
Clearly, there is a risk of a lot of arbitrariness and distortions.

Why would anyone trust such a process?
Let alone to a bean-counter at the Govt?

As a sidebar, I've already been taxed once on my income and capital gains.
Why do I need to be taxed again on 40% of my assets over $15.0 million when I die?

And why would anyone think that the Federal Govt (of all people) knows best what to do with my money?
You've got to be kidding me.

I will put it into a non-profit trust before I give it to the Federal Govt.
Hands down.

Bottomline: The CA Billionaire's Tax is a dangerous expansion of State power.

Here's an excerpt that I came across from Paul Mueller at the University of Texas at Austin:

The difficulty increases when wealth takes illiquid or non-public forms. Stakes in startups, venture capital funds, private equity, closely held businesses, and real estate partnerships lack clear market prices or reliable valuation benchmarks. Should valuations be based on the most recent funding round, secondary market transactions that often occur at steep discounts, or government-issued schedules untethered from actual market conditions?

"Economically and legally, American taxation has focused on flows, not stocks. Income is a flow. Consumption is a flow. Realized capital gains are a flow. Wealth, by contrast, is a stock, an accumulated bundle of assets whose value is often contingent, illiquid, uncertain, and highly sensitive to market conditions. The difficulty of taxing stocks without undermining property rights is precisely why the United States has historically refrained from doing so.

A wealth tax fundamentally alters the concept of ownership. If the state can tax unrealized gains, then all property is perpetually subject to reassessment and partial confiscation. What begins as a "billionaires" tax could easily be extended to individuals worth $100 million, $10 million, or even less. Once the government "cracks the code" on valuing and taxing unrealized assets, the rest of the tax base, whose aggregate wealth far exceeds that of billionaires, becomes an obvious target.

The distribution of American wealth underscores the risk inherent in taxing unrealized gains. While U.S. billionaires collectively hold in wealth, the Federal Reserve estimates that the middle class holds in housing equity and retirement assets. The political temptation to broaden the tax base.

The issue is not whether the wealthy should contribute to public revenues, but whether ownership itself should be treated as a contingent grant from the state. Wealth taxes discard centuries of American legal tradition in exchange for a policy that will inevitably fail."

California's Proposed Billionaire Tax and Its Portents for Normal People |

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LudwigsFountain said:

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I'd like to see borrowing on stock that is used for consumption taxed. A sells stock to finance consumption - taxed. B borrows the same amount secured by stock to finance consumption - not taxed. Hard to see the difference, except for the tax consequence.

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DiabloWags said:

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95% of my life has been self-employed

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smh said:

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DiabloWags said:

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95% of my life has been self-employed

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whoa, dude, don't forget to take some time off, maybe smell the flowers or whatever.

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LudwigsFountain said:

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I'd like to see borrowing on stock that is used for consumption taxed. A sells stock to finance consumption - taxed. B borrows the same amount secured by stock to finance consumption - not taxed. Hard to see the difference, except for the tax consequence.

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tequila4kapp said:

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dajo9 said:

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tequila4kapp said:

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Bezos and Musk are smarter than 99% of us, have done amazing things and deserve their rewards.

You may well be right that we are on the cusp of such a plan. That movement will fail, as it always does, because the definition of "rich" is always adjusted down to capture more wealth to cover additional spending initiatives; and too, the plans fail because they never account for dynamic human behavior to avoid paying 'excess' taxes.

Notice that CA's tax the billionaire plan taxes billionaires not for what they actually own but for the percentage of companies they exercise voting powers over.

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It's not true that it always fails. Look at tge Progressive Movement and soon after the FDR legacy. Huge succeses we live by today.

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There were very regressive components to the FDR tax policies. The income tax was originally intended to be a tax on the rich. The FDR era saw the exemption lowered until nearly everyone was paying taxes (anyone over 11K in 2026 dollars). Also, payroll taxes increased from 3 to 5%. The highest tax rate was over 90%. None of that is a win.

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tequila4kapp said:

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LudwigsFountain said:

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I'd like to see borrowing on stock that is used for consumption taxed. A sells stock to finance consumption - taxed. B borrows the same amount secured by stock to finance consumption - not taxed. Hard to see the difference, except for the tax consequence.

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Disagree.
The stock is collateral. The money acquired via loan isn't free - it is "taxed" in the form of interest payments (which themselves ARE taxed to the lender). When we say "consumption" we aren't talking about a burger at 5 guys, we are talking about a new commercial venture, real estate, etc. If that asset fails or loses value our rich person loses money, including (potentially) his collateral stock. If our rich person's collateral leads to a financial windfall the government gets its taxes when the asset is sold. There is no free money to the rich person.

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socaltownie said:

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Couple of things....

1) While we might believe prop 13 is the law of every land it is not. The middle class has LONG been subject to this sort of tax - as the assessor every year tries to determine what their house is worth and the mil rate to be imposed as the property tax bill goes out. Really long and interesting story about Prop 13 and how the actions of the LA assessor during a real estate boom likely helped its passage.

2) I do not disagree. Where I DO disagree with this is the variety of tax laws such as the step up basis that allows this wealth never to "flow"....and yet the consumption of the wealth absolutely does.

3) Finally YOU are not taxed. You are dead. Your estate is but modern science says you are completely out of the picture. Gone. Irrelevant.

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dajo9 said:

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tequila4kapp said:

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dajo9 said:

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tequila4kapp said:

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Bezos and Musk are smarter than 99% of us, have done amazing things and deserve their rewards.

You may well be right that we are on the cusp of such a plan. That movement will fail, as it always does, because the definition of "rich" is always adjusted down to capture more wealth to cover additional spending initiatives; and too, the plans fail because they never account for dynamic human behavior to avoid paying 'excess' taxes.

Notice that CA's tax the billionaire plan taxes billionaires not for what they actually own but for the percentage of companies they exercise voting powers over.

---

It's not true that it always fails. Look at tge Progressive Movement and soon after the FDR legacy. Huge succeses we live by today.

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There were very regressive components to the FDR tax policies. The income tax was originally intended to be a tax on the rich. The FDR era saw the exemption lowered until nearly everyone was paying taxes (anyone over 11K in 2026 dollars). Also, payroll taxes increased from 3 to 5%. The highest tax rate was over 90%. None of that is a win.

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Weekends, 8 hour work days, overtime, minimum wage, child labor laws, social security, Medicare, private sector unions, less wealth inequality - all of it was supposed to be impossible and all of it was successfully achieved despite the naysayers on this board. We just have to have the backbone that our grandparents had to stand up to these billionaires.

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socaltownie said:

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tequila4kapp said:

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LudwigsFountain said:

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I'd like to see borrowing on stock that is used for consumption taxed. A sells stock to finance consumption - taxed. B borrows the same amount secured by stock to finance consumption - not taxed. Hard to see the difference, except for the tax consequence.

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Disagree.
The stock is collateral. The money acquired via loan isn't free - it is "taxed" in the form of interest payments (which themselves ARE taxed to the lender). When we say "consumption" we aren't talking about a burger at 5 guys, we are talking about a new commercial venture, real estate, etc. If that asset fails or loses value our rich person loses money, including (potentially) his collateral stock. If our rich person's collateral leads to a financial windfall the government gets its taxes when the asset is sold. There is no free money to the rich person.

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LOL!!!!

Do you really believe that???!!!!

While I want that story of late capitalism to be true that isn't the case.

Jeff B's (second) wedding cost more than $50 million dollars. Meanwhile his ex is helping kids go to college. It is STRIKING the difference. It really is. And gets at why I really do think the Barbarians will soon be at the gate.

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tequila4kapp said:

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dajo9 said:

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tequila4kapp said:

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dajo9 said:

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tequila4kapp said:

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Bezos and Musk are smarter than 99% of us, have done amazing things and deserve their rewards.

You may well be right that we are on the cusp of such a plan. That movement will fail, as it always does, because the definition of "rich" is always adjusted down to capture more wealth to cover additional spending initiatives; and too, the plans fail because they never account for dynamic human behavior to avoid paying 'excess' taxes.

Notice that CA's tax the billionaire plan taxes billionaires not for what they actually own but for the percentage of companies they exercise voting powers over.

---

It's not true that it always fails. Look at tge Progressive Movement and soon after the FDR legacy. Huge succeses we live by today.

---

There were very regressive components to the FDR tax policies. The income tax was originally intended to be a tax on the rich. The FDR era saw the exemption lowered until nearly everyone was paying taxes (anyone over 11K in 2026 dollars). Also, payroll taxes increased from 3 to 5%. The highest tax rate was over 90%. None of that is a win.

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Weekends, 8 hour work days, overtime, minimum wage, child labor laws, social security, Medicare, private sector unions, less wealth inequality - all of it was supposed to be impossible and all of it was successfully achieved despite the naysayers on this board. We just have to have the backbone that our grandparents had to stand up to these billionaires.

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You are moving the goalposts to social welfare and safety net programs. I criticized tax the rich initiatives in part because the non-rich eventually get taxed too. That's what happened during the FDR era.

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DiabloWags said:

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> I will put it into a non-profit trust before I give it to the Federal Govt.
Hands down.

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socaltownie said:

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I am increasingly thinking we are about at a Bernie/Warren inflection point were we really will get some serious "soak the rich" plans. I am not expecting revolution but I could see it.....

Feels like a fair number of things are converging

1) The TechBros really did embrace a neo-social darwinian view of their abilities.

Lots of reasons for this and lots of different strains have come together but when you listen to them talk they embody the near "hit them in the face" Furd-student view that they are Billionaires solely because they are "smart" and that this is nothing more than a fair maritocracy that has rewarded them. For laughes and chuckles it is worth going back to reread 19th century defenses of unfettered capitalism and how robber barons described their success in near exact terms.

This is a problem because, of course, the lumpen prolitariat may not believe that - or be accepting of their fate to be further down the social darwin pecking order

2) The TechBros are divorcing themselves form job creation

This I think is underappreciated. When Larry Ellison cut head count last year it wasn't to add head count in other areas. It was to free up money for datacenters - believing that Oracles shareholder value would be increased by that capital investment. As Bazos is engaging in this week Amazon is not under dire economic threat - it just wants to free up cash so that the A/B testing could be further automated and more nimbly applied.

Why this is a problem is that when the uber rich are creating jobs their actions are more tolerated. But if gazzillionaire are getting rich at the VERY SAME TIME they are cutting employment people will ask "What is in it for us?"

Their lack of philanthropy also feels like it matters. There is such a strong contrast in how Bazos is treating his world transformative wealth and how his ex is. That is a chicken I really do think comes home to roost.


3) The decline of inheritance taxes means we will soon get a class of very idle rich people who did nothing.

We already see it with the Walton family scions. But soon, if he fails to give it all away, we will see it with Gates daughter. Elon will have to divide the fortune to many kids but they too are likely never have to work a day in their lives. They MIGHT go quiety and keep their head down. But if they throw their money around like the Duponts of old then it isn't hard to imagine someone saying "Well sure, their grandfather built things that were great but what did THEY do to deserve a 10 figure net worth.

I think HOW the wealth that is concentrated is used is far more important than the concentration itself.


I think a mistake in American histography is to say that since we didn't have a revolution of 1848 we are not only for class warefare. It really misses just how close things were in 1880s....and how ethnic divisions really kept the working class from consolidating. Even then it was a close thing and likely the progressives were required to keep the barricade from going up. It feels like we are at that - because if Larry is just running a family office with 100 people or so, living on an island, and still exactly ogpololy rents I don't see a huge step to people saying '**** it...lets take it all and his head on a pike":.

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socaltownie said:

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A few things.....

A) Bazos and Elon are smarter than 99% of us. Really? Bah. I think that simply is a tautology - "to be rich you must be smart. If you are smart you will be rich." Elon's views on government, space, mars, and families suggest he as a few blind spots. Bazos has the moral compass with the women in his life of a 14 year old. I won't even comment about Larry Ellison's failings. Expressing that really does show neo-social darwinism.

B) If you are uber rich there are a myriad of ways to reduce your CA burden to near zero if you 1) Avoid income and 2) Realized Cap gains. Who pays the bulk is the next rung down - not the uber wealthy but the very wealthy - the smuck that is the managing partner at the lawfirm that draws a salary, can't finance his lifestyle through collatoralized debt and probably bought a house (or several) over the past decade.

C) THat isn't agreeing with SEIU. I would have crafted a better initiative that had less tax avoidance problems but that is a post for another day.

D) But that we are even having this discussion gets at the point. SEIU is right to ask.....does it MATTER if Larry is living on his Bond Villain Island if it is shedding all US jobs like a drunken sailor, believes that AI replacing Labor is the future and leverages the US legal system to extract ogopoly rents. Or Zuck? What is the loss if he moves to Nevada? Is the company actually CREATING that many jobs?

This differs from a simplier time in tech. There was a STRONG argument that taxing David Packard or Andy Grove to the point that they left would have been BAD policy. HP and INTEL created immense wealth. It just isn't clear to me that Oracle and Amazon do - except for shareholders and the yatch captains or I guess the busty chopper pilot.

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DiabloWags said:

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socaltownie said:

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Couple of things....

1) While we might believe prop 13 is the law of every land it is not. The middle class has LONG been subject to this sort of tax - as the assessor every year tries to determine what their house is worth and the mil rate to be imposed as the property tax bill goes out. Really long and interesting story about Prop 13 and how the actions of the LA assessor during a real estate boom likely helped its passage.

2) I do not disagree. Where I DO disagree with this is the variety of tax laws such as the step up basis that allows this wealth never to "flow"....and yet the consumption of the wealth absolutely does.

3) Finally YOU are not taxed. You are dead. Your estate is but modern science says you are completely out of the picture. Gone. Irrelevant.

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#2) I'm in favor of the step-up in cost basis. It reflects the costs of inflation. If the IRS didn't allow for this, a Family Trust would get hammered with a massive tax bill. In the case of a family farm, it would most likely have to be sold in order to meet the tax liability.

#3) Yes, Im aware that it's the Estate that is taxed. That's obvious. Not sure what your point is. And I would disagree that one becomes irrelevant when the trustee dies. My "legacy" and the money that gets distributed will have stipulations and be directed to where I want it to go.

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