If the ballot had simply said “Do you want to tax billionaires’ wealth?”, I bet the result would have been different. There were 3 separate ballot measures, one of which needed to be voted Yes, and the other two of which needed to be voted No (as they would negate the first), they weren’t super clear, and there was a lot of propaganda getting shoved down their throats about this. I’d be willing to bet that no small amount of people supported the measure but fucked it up when they were voting.
Yeah, having a measure, and then separate initiatives against that measure, on the same ballot should honestly be illegal. “Do you want to do this thing?” and “Do you want to prevent this thing from being done, now and in the future?” have no place being voted on at the same time.
Yup, people in this thread are quick to blame the voters. Most voters, unless taking extreme preparations beforehand, were aware there was a ballot measure to tax the rich, but probably very confused by the three ballot measures and how they would interact.
I suspect Gavin Newsom is having a laugh on a yacht right now with quite a few billionaire friends (figuratively, maybe literally). They wanted to confuse voters with scary language, and they did, by spending hundreds of millions of dollars in disinformation. Musk probably is furiously taking notes.
For me personally I was a bit on the fence because you don’t want to tax illiquid assets, since if I have a billion dollar business but all that money is in the business, that money is already doing work and in the economy which I don’t have as much an issue with. But turns out most billionaires exploit that and try to make ALL their assets seem as illiquid as possible, as to avoid having visible personal wealth. I can see reasons for voting against it but those reasons don’t cover all the ones cheating the system.
If you have a billion dollar business and you leverage $100 million for a loan, whatever you leverage ought to be taxed and considered income if you ask me.
If it isn’t liquid you can’t use it, if you can use it, it is taxable.
If I am given a stock that is worth $1. I pay taxes on the $1 because $1 is income.
If the stock goes to $2. Do I automatically owe the government more tax?
Now if I take my $1 stock that is now worth $2 and trade it for a 2 dollar bill. Do I automatically owe the government more tax?
But if I take out a $1 loan and use my $1 stock that is now worth $2 as collateral, I do owe taxes?
If you have a billion dollar business and you leverage $100 million for a loan, whatever you leverage ought to be taxed and considered income if you ask me.
Lets say I have $10,000 in total assets (car included) and I leverage my car worth $1,000 for a loan. You expect me to pay taxes on that $1,000 loan like it was income? Why would a business be different?
If you are given a stock worth $1 you pay tax on that amount and it is treated is income. Agreed.
If the stock becomes $2 do you owe? No. Unrealized gains. That stock could do anything.
If you trade your $2 stock for a $2 Bill, you owe tax on the $1 gain. We are still tracking.
If you use your stock as collateral for a $1 loan, you already paid taxes for the “income” of $1. I could see arguing that you are “clear”. I would do it like this: when you borrow against stock, I would say that the principle “value” of the loan be taxed as though you had sold the stock which is functioning as principle. So if your $1 stock is now worth $10 and you use $3 to borrow $5 (somehow, let’s just assume it’s not 1:1) I say you owe tax on $3 - $1 = $2. When that loan is done, if you want to do it again, you don’t owe again with that batch of stock. If you take another loan same time, same terms, you also owe tax on $3 more, since you are doing $6 worth of “work”.
This is still a little unsatisfactory to me, but it seems like the most fair. Either the money is usable, and therefore taxable, or it isn’t.
Edit: and of course your brokerage now marks your cost basis for those stocks accordingly because it has been “realized”. If you then sell those stocks for that value you’re all set or if you gain or lose you could have losses or gains respectively for tax purposes. This is still wildly good because you can use the money without selling stocks.
Edit 2: The more I think about this, the more I think you should just be taxed every time on every dollar of stock you leverage. If you want to use it, divest.
If I buy a house for 100$ then that house is now worth 100$, as that transaction set the market value at the time of purchase. 5 years later an assessor from the AHJ comes by and informs me it’s worth 150$ because “market”. My property tax burden has now increased as its percentage based on the market value of the house. I now owe higher taxes on unrealized gains.
If it works in property why not stocks? Is it the risk that makes the difference?
The risk the American tax payer has been forced to burden since we’ve bailed major institutions out of insolvency since 2008 (and before).
We are/have been allowing the ultra wealthy to create a system where they mitigate all their personal financial risk and then the people philosophize why it would be “unfair” to level the playing field. I don’t get it.
Yes, it might appear silly in the above hypothetical to be taxed on the same dollar 5 times but that isn’t the discussion. We are talking about a one time set rate tax on billionaire assets because it’s obvious that this game is rigged and something needs to be done.
Unfortunate, this didn’t pass as it might have been a proof of concept for the rest of the nation.
If the ballot had simply said “Do you want to tax billionaires’ wealth?”, I bet the result would have been different. There were 3 separate ballot measures, one of which needed to be voted Yes, and the other two of which needed to be voted No (as they would negate the first), they weren’t super clear, and there was a lot of propaganda getting shoved down their throats about this. I’d be willing to bet that no small amount of people supported the measure but fucked it up when they were voting.
almost like it was deliberately made confusing to systematically defeat the measure.
Yeah, having a measure, and then separate initiatives against that measure, on the same ballot should honestly be illegal. “Do you want to do this thing?” and “Do you want to prevent this thing from being done, now and in the future?” have no place being voted on at the same time.
Yup, people in this thread are quick to blame the voters. Most voters, unless taking extreme preparations beforehand, were aware there was a ballot measure to tax the rich, but probably very confused by the three ballot measures and how they would interact.
I suspect Gavin Newsom is having a laugh on a yacht right now with quite a few billionaire friends (figuratively, maybe literally). They wanted to confuse voters with scary language, and they did, by spending hundreds of millions of dollars in disinformation. Musk probably is furiously taking notes.
Musk was probably in on bribing him.
For me personally I was a bit on the fence because you don’t want to tax illiquid assets, since if I have a billion dollar business but all that money is in the business, that money is already doing work and in the economy which I don’t have as much an issue with. But turns out most billionaires exploit that and try to make ALL their assets seem as illiquid as possible, as to avoid having visible personal wealth. I can see reasons for voting against it but those reasons don’t cover all the ones cheating the system.
If you have a billion dollar business and you leverage $100 million for a loan, whatever you leverage ought to be taxed and considered income if you ask me.
If it isn’t liquid you can’t use it, if you can use it, it is taxable.
If I am given a stock that is worth $1. I pay taxes on the $1 because $1 is income.
If the stock goes to $2. Do I automatically owe the government more tax?
Now if I take my $1 stock that is now worth $2 and trade it for a 2 dollar bill. Do I automatically owe the government more tax?
But if I take out a $1 loan and use my $1 stock that is now worth $2 as collateral, I do owe taxes?
Lets say I have $10,000 in total assets (car included) and I leverage my car worth $1,000 for a loan. You expect me to pay taxes on that $1,000 loan like it was income? Why would a business be different?
If you are given a stock worth $1 you pay tax on that amount and it is treated is income. Agreed.
If the stock becomes $2 do you owe? No. Unrealized gains. That stock could do anything.
If you trade your $2 stock for a $2 Bill, you owe tax on the $1 gain. We are still tracking.
If you use your stock as collateral for a $1 loan, you already paid taxes for the “income” of $1. I could see arguing that you are “clear”. I would do it like this: when you borrow against stock, I would say that the principle “value” of the loan be taxed as though you had sold the stock which is functioning as principle. So if your $1 stock is now worth $10 and you use $3 to borrow $5 (somehow, let’s just assume it’s not 1:1) I say you owe tax on $3 - $1 = $2. When that loan is done, if you want to do it again, you don’t owe again with that batch of stock. If you take another loan same time, same terms, you also owe tax on $3 more, since you are doing $6 worth of “work”.
This is still a little unsatisfactory to me, but it seems like the most fair. Either the money is usable, and therefore taxable, or it isn’t.
Edit: and of course your brokerage now marks your cost basis for those stocks accordingly because it has been “realized”. If you then sell those stocks for that value you’re all set or if you gain or lose you could have losses or gains respectively for tax purposes. This is still wildly good because you can use the money without selling stocks.
Edit 2: The more I think about this, the more I think you should just be taxed every time on every dollar of stock you leverage. If you want to use it, divest.
Because you are a person and a business is not.
If I buy a house for 100$ then that house is now worth 100$, as that transaction set the market value at the time of purchase. 5 years later an assessor from the AHJ comes by and informs me it’s worth 150$ because “market”. My property tax burden has now increased as its percentage based on the market value of the house. I now owe higher taxes on unrealized gains.
If it works in property why not stocks? Is it the risk that makes the difference?
The risk the American tax payer has been forced to burden since we’ve bailed major institutions out of insolvency since 2008 (and before).
We are/have been allowing the ultra wealthy to create a system where they mitigate all their personal financial risk and then the people philosophize why it would be “unfair” to level the playing field. I don’t get it.
Yes, it might appear silly in the above hypothetical to be taxed on the same dollar 5 times but that isn’t the discussion. We are talking about a one time set rate tax on billionaire assets because it’s obvious that this game is rigged and something needs to be done.
Unfortunate, this didn’t pass as it might have been a proof of concept for the rest of the nation.