09-02-2008, 01:27 PM | #1 | ||
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POL: California wants half of your assets/income?
California has the some, if not the highest taxes (highest income taxes at least on the top earners) in the country, with another yearly budget deficit, and now it looks like a plan is being passed around to impose an income/wealth tax (as well as an "exit" tax). This in addition to it's bloated government, regulations of all types, and the stupid "nanny" decisions they make/made.
They are starting see people and business leave the state. http://www.mercurynews.com/ci_10349669 For being an accountant, this guy is an idoit on economic and financial matters. If I'm not mistaken, half of Californians don't even pay any income tax. Is the "exit tax" even legal? |
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09-02-2008, 01:29 PM | #2 |
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No way this is Constitutional, and I don't think this is reflective of too many people's opinions.
Still, I'd be curious if the FOFC liberals think this is "too far" or if there's merit to this. |
09-02-2008, 01:32 PM | #3 |
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09-02-2008, 01:39 PM | #4 |
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Nope. 5th Amendment violation.
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09-02-2008, 01:46 PM | #5 |
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The government will destroy the rich if they can, and be all too happy to fill the power vacuum.
I didn't think it would ever happen in America but I think we're getting closer. |
09-02-2008, 01:57 PM | #6 | |
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I'm not sure why the perspective of "FOFC liberals" is more relevant on this issue. After all, the most likely reason that this statute would probably be found unconstitutional is that it impedes the right to travel which was a "liberal" penumbra right recognized by the "liberal" courts of the 50's and 60's. An originalist approach to the constitution would almost certainly allow the law to survive. With that being said, I'm not sure that this statute will be struck down. The right to travel is not considered a core liberty interest and modern courts have been loath to recognize it in a variety of contexts. So, the right to travel argument seems likely to fail. The interstate commerce argument is more complicated but given the success of states in defending "use taxes" for out of state purchases, I'm not sure that the wealth tax is on shaky ground. I admit I thought that use taxes would be struck down and so I see the allowance of the wealth tax as the logical conclusion of allowing use taxes (which more directly implicate interstate commerce). I don't know why the tax would be considered an unconstitutional takings. The government imposes a variety of taxes and regulations that just aren't considered in violation of the constitution. I'm happy to be proven wrong since I don't know takings law all that well, but I don't see how taxing wealth (just like any property tax) would be unconstitutional. I'm no fan of the proposed law, but it doesn't strike me as clearly unconstitutional under existing precedent.
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09-02-2008, 02:01 PM | #7 | ||
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09-02-2008, 02:03 PM | #8 |
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Where is the discussion of the exit tax? I found no mention of it in that article, just a one-time tax on wealth and a permanent increase in taxes for the wealthiest bracket.
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09-02-2008, 02:12 PM | #9 | |
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My understanding, based upon reading about the proposal elsewhere, is that the one-time tax is only triggered upon leaving the state. It thus tries to trap the rich in the state through tax incentives. I think that news account was just a bit sloppy in explaining the law. Here is a roundup of a lot of online discussions of the law: The Tax Foundation - California Exit Tax Proposal Derided. I think this is much ado about nothing. This is one guy's wacky idea. It wouldn't be the first time a crazy idea made into a referendum in California. In fact, I don't think it is a proper voting day unless there are a few ridiculous ideas for Californians to consider.
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09-02-2008, 02:30 PM | #10 | |
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I'm not surprised that CA legislators continue to try and find creative ways out the hole Proposition 13 dug for them. That said, I've stated before, and I'll state again, that I'm opposed to "gimmick" taxes, and I believe most progressives are these days (which is one of the reasons I like Obama's U of C-derived economics & finance plan). Simply put, if government wants to raise taxes, then raise taxes and don't try to be cute about it. If I don't like it, and if I think you're wasting my money, I'll try to vote you out of office. Besides, "gimmick" taxes like these often turn out to be 100% useless - those who would be impacted by the taxes usually have the resources to shelter themselves or minimize the resulting tax hit anyway. |
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09-02-2008, 03:10 PM | #11 | |
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There are definitely some Dormant Commerce Clause implications. An argument can be made that this favors in state economic interests over out of state ones.
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09-02-2008, 03:15 PM | #12 | |
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I thought the same thing about use taxes (which allow states like NY to collect use taxes on out of state purchases, but not in state purchases) and those seem to be surviving. Since use taxes more directly relate to commerce, I think they should be on shakier ground (although they have the convoluted rationale of neutrality based upon the higher in state sales tax). Since the CA measure stands zero chance of becoming law, we will never know how the courts will react, but unless the courts start striking down use taxes, then I think this law is on solid DCC footing.
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09-02-2008, 03:19 PM | #13 |
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Its a nutjob thing, from a nutjob group. Trust me - I live in the bay area, where the Dem is the hard-core conservative.
FWIW though, asset/wealth taxes are in place - I believe France has one, for example, albeit with lower corporate tax rates (that would allow higher wealth accumulation in the first place). |
09-02-2008, 05:58 PM | #14 | |
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Wealthy (and even ambitious) French citizens live in other countries that are much more tax-friendly, avoiding the taxes all together. Of course, California just seems hell bent on raiding taxpayers for whatever they got. Just one of the proposals they've considered/are considering this year: California tax proposals target beer-loving, pornography-watching yacht owners - Los Angeles Times Nevada should be a lot more aggressive in going after wealthy California residents and businesses. No direct taxes at all for citizens or businesses. Last edited by Galaxy : 09-02-2008 at 06:01 PM. |
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09-02-2008, 06:55 PM | #15 | |
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OTOH, just because it makes sense as precedent, doesn't mean the SCOTUS will actually follow it to the letter. They may say use taxes are ok, but this just goes a bit farther than they'd want.
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09-02-2008, 08:22 PM | #16 | |
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The interesting thing is Massachusetts has a ballot proposal this year to end state income and capital gains tax. |
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09-02-2008, 08:43 PM | #17 |
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09-02-2008, 09:57 PM | #18 |
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Last edited by Galaxy : 09-02-2008 at 10:01 PM. |
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