California Legislators Propose a State Estate Tax

[skipro33]

Personally, I don't care what happens with this proposal. I would not move to California for a million dollars. I just want the state's population to stay there and stop ruining other states, like mine. I was also pointing out the odd dynamics that seem to have emerged in our political system that seem to encourage these trial balloons.

Eh, Colorado is getting ruined for me already. I am seriously considering an escape in the future . Will be investigating Wyoming, the black hills part of Nebraska and south Dakota.

And while you deal with winter temps -20 and below, I'll be BBQing, in nothing more than long sleeve shirt, the salmon off the ocean I caught the season before, after skiing that day in over 400" of snow. From the mountains to the ocean, to the mild climate in a state with almost 46 million acres of federal land (45%), California is a big state. It's politics are barely a blip on my personal lifestyle and I'm about as opposite as can be from it.

Wyoming only is 48% federal land and South Dakota is a mere 5%. Nebraska barely 1%.

(Last night I BBQ'd my salmon caught in August last year and I'm up this morning at 6am to go get in on over 14" of fresh snow over night. It's 45 degrees this morning outside and will warm to the 60's later here at the house while it's a crisp 21 at the base lodge I'm headed for 50 miles from my driveway to theirs)

Yes, California has a lot of people, but they are concentrated to mostly two areas; LA and SF. Avoid those and it's pretty much anything you want it to be if you choose wisely. I live in a county that has a sheriff who issues CCW permits as long as you are a non-criminal. I'm in a community small enough and been here long enough to know the cops are kids I coached in little league.

 

[joeea]

Actually it's NOT life in California because we do not have an estate tax here.

Why let facts get in the wait of a complaint?

 

[MichaelB]

And while you deal with winter temps -20 and below, I'll be BBQing, in nothing more than long sleeve shirt, the salmon off the ocean I caught the season before, after skiing that day in over 400" of snow.

No pants? What do the neighbors say?

 

[LOL!]

So take from those that earned it and give it to those that didn't.

That's what I do every day with my stock investments and what I did when I was working by paying my workers much much less than I made.

 

[joeea]

An estate tax is a tax on the transfer of property upon death. Wouldn't a trust holding the larger valued assets negate any concern about an estate tax? For example; my home is my largest single asset and I live in California. My home is owned by a trust set up by my estate planning atty. I have my wife and kids on the trust. When I die, the trust removes my name. The house remains in the trust. No estate tax.

Yes. And that's why the complaints about estate taxes are mostly just hot air.

Most people will be below the level where estate taxes must be paid. And those who won't have relatively simple ways to avoid the estate taxes anyway. It's the smart thing to do.

Very few estates end up paying much (if anything) in taxes these days.

Much ado about nothing.

 

[joeea]

There is not much left in California worth staying for.

Yup. That's why nobody lives there any longer.

 

[marko]

Yes. And that's why the complaints about estate taxes are mostly just hot air.

Most people will be below the level where estate taxes must be paid. And those who won't have relatively simple ways to avoid the estate taxes anyway. It's the smart thing to do.

Very few estates end up paying much (if anything) in taxes these days.

Much ado about nothing.

+1
Exactly my point in post #45!

Not only are the complaints hot air, but so are the proposals; they know it doesn't work but it feels good to those who don't know better.

 

[brewer12345]

And while you deal with winter temps -20 and below, I'll be BBQing, in nothing more than long sleeve shirt, the salmon off the ocean I caught the season before, after skiing that day in over 400" of snow. From the mountains to the ocean, to the mild climate in a state with almost 46 million acres of federal land (45%), California is a big state. It's politics are barely a blip on my personal lifestyle and I'm about as opposite as can be from it.

Wyoming only is 48% federal land and South Dakota is a mere 5%. Nebraska barely 1%.

(Last night I BBQ'd my salmon caught in August last year and I'm up this morning at 6am to go get in on over 14" of fresh snow over night. It's 45 degrees this morning outside and will warm to the 60's later here at the house while it's a crisp 21 at the base lodge I'm headed for 50 miles from my driveway to theirs)

Yes, California has a lot of people, but they are concentrated to mostly two areas; LA and SF. Avoid those and it's pretty much anything you want it to be if you choose wisely. I live in a county that has a sheriff who issues CCW permits as long as you are a non-criminal. I'm in a community small enough and been here long enough to know the cops are kids I coached in little league.

I am glad you like it there. Perhaps you can do us a favor and stay there.

 

[gwraigty]

Right, but would you not agree that every dollar that went into the lottery pot was also already taxed in some form? I mean aside from people using some questionable sources, most people purchase lottery tickets with dollars that have already had tax paid on them. The entire pool of money has already been taxed. Why then is it ok to tax a lottery winner and not a person inheriting a huge estate?

I didn't say it was OK, or not OK, to tax a lottery winner. I don't play the lottery, so I'm not familiar with the rules. I simply stated my opinion on the OP's topic. I'm not interested in engaging in a debate over this.

 

[copyright1997reloaded]

Eh, Colorado is getting ruined for me already. I am seriously considering an escape in the future . Will be investigating Wyoming, the black hills part of Nebraska and south Dakota.

This is what is making my "escape from New York" planning so problematic. I worry that I will pick a state that will get the same disease as the one I am coming from, and yes I am aware that it is ironic that I will be one of the ones potentially bringing the disease.

Yes. And that's why the complaints about estate taxes are mostly just hot air.

Most people will be below the level where estate taxes must be paid. And those who won't have relatively simple ways to avoid the estate taxes anyway. It's the smart thing to do.

Very few estates end up paying much (if anything) in taxes these days.

Much ado about nothing.

If it is much ado about nothing, then why implement it? It either raises revenue or it doesn't. If all the smart (TM) people can avoid it, then it isn't an effective revenue mechanism and should be eliminated. If it is a large revenue mechanism, it must have an impact on those the revenue is raised from.

These threads are always interesting. Some of the same people who think it is great of the state to add yet another tax are the same ones doing everything to limit their income to stay eligible for ACA subsidies that are intended for the poor.

Personally, I have mixed feelings on death/estate taxation. For instance, PA has one w/no floor. Ouch. But on the other hand, they have NO taxation on Social Security, Pensions, IRA/401K distributions, etc. as well as relatively low 3.1% flat rate on other income. So maybe such a system is OK in the sense that seniors get to keep more of their income while they are living with the offset that some of it is taxed upon their death.

 

[sengsational]

No pants? What do the neighbors say?

They just shrug. It's California, after all.

 

[Teacher Terry]

Skip, Placerville is beautiful. Since we are close we always spend a week in our RV in the fall up there. Brewer, can have those places he is thinking about moving too. Hot summers and brutal winters.

 

[brewer12345]

Skip, Placerville is beautiful. Since we are close we always spend a week in our RV in the fall up there. Brewer, can have those places he is thinking about moving too. Hot summers and brutal winters.

Some of us enjoy the change of seasons. I also have had more than enough ofto being told how to live my life by the morally bankrupt.

 

[Teacher Terry]

Where both skip and I live we have a mild 4 seasons. I have lived or visited the states you mentioned and the weather is awful. South Dakota and Nebraska are cheap and that’s for a reason.

 

[NW-Bound]

... Yes, California has a lot of people, but they are concentrated to mostly two areas; LA and SF. Avoid those and it's pretty much anything you want it to be if you choose wisely...

Indeed, CA is a large state, and I enjoy travel there over the years. Recently, I avoided the crowded population centers, and took the backroads with my motorhome. I saw more things that I did not when doing car trips while still working.

If you do not have to work for a living and need a good paying job, it opens up a lot of choices. But once people get used to the hubbub, they cannot leave it. Anything less, they consider it boring. And it is their personal freedom to do as they wish.

 

[marko]

Confused.

I didn't do a deep dive and tally all the responses but:

Last week we had a thread where the consensus seemed that people were migrating from NY to Florida and Texas not so much because of high taxes but to reach better weather.

This thread seems to lead one to believe that folks are leaving--or will leave-- the good weather of CA because of taxes.

I could be mistaken.

 

[joeea]

If it is much ado about nothing, then why implement it? It either raises revenue or it doesn't. If all the smart (TM) people can avoid it, then it isn't an effective revenue mechanism and should be eliminated. If it is a large revenue mechanism, it must have an impact on those the revenue is raised from.

It hasn't been implemented in California - just proposed by one legislator.

These threads are always interesting. Some of the same people who think it is great of the state to add yet another tax are the same ones doing everything to limit their income to stay eligible for ACA subsidies that are intended for the poor.

"Intended"?

You read the rules. You play by the rules. So it goes.

 

[NW-Bound]

Confused.

I didn't do a deep dive and tally all the responses but:

Last week we had a thread where the consensus seemed that people were migrating from NY to Florida and Texas not so much because of high taxes but to reach better weather.

This thread seems to lead one to believe that folks are leaving--or will leave-- the good weather of CA because of taxes.

I could be mistaken.

Better weather is nice, particularly if it saves you in taxes too.

But if better weather costs you too much, some people settle for something a bit less nice, in order to keep some dough in their pocket.

I have always believed that everything "nice" in life costs me money. And so, I always ask myself what the hidden costs are, and whether I want to pay it.

 

[Just_Steve]

Confused.

I didn't do a deep dive and tally all the responses but:

Last week we had a thread where the consensus seemed that people were migrating from NY to Florida and Texas not so much because of high taxes but to reach better weather.

This thread seems to lead one to believe that folks are leaving--or will leave-- the good weather of CA because of taxes.

I could be mistaken.

For most that I know that left or are leaving, weather is the #2 reason on their list, I cannot state reason #1 for fear of bringing on porky.

 

[daylatedollarshort]

Low income and young people without high levels of education are leaving, the wealthy and better educated are moving in. Most of the people who have left made under $30K.
https://www.sandiegouniontribune.co...thy-people-per-report-20180221-htmlstory.html


"Of those who left during the latest years for which statistics exist, the vast majority earned less than $30,000 per year. A net total of 469,000 of those leaving had no college degree. Given the prevailing levels of rents and home prices in California, it’s easy to see their financial motive in leaving for far lower-priced states like Texas, Nevada, Oregon and Arizona. But as lower-income residents left there was a net increase of 52,700 residents from other states making more than $50,000 per year who do have at least a bachelor’s degree"
https://www.davisenterprise.com/forum/opinion-columns/whos-leaving-california-its-not-who-you-think/

 

[Hamlet]

I live in Minnesota. We have brutal winters and relatively high taxes. I like it here. I feel like my state does a better job than most of making sure that we get decent value for our tax dollars. My kids go to a great school, my neighborhood is very safe with friendly people, and there are a whole bunch of people who work really hard at all hours to keep the roads clear and functional for me in a state where mother nature doesn't want them to exist for very long.


Plus the winters keep the riff-raff out.



We actually have an estate tax that kicks in at only $1 million. I think that's a lower exemption than makes sense, but it isn't something I'm losing sleep over. I think the rate is like 10%. So assuming I leave an estate of $3 million, that will reduce it to $2.8 million. I'm pretty sure that regardless of the size of my estate, I'm still going to be dead.


I might snowbird a little in retirement to avoid January and February in Minnesota, but I don't see myself moving anywhere else beyond that.

 

[NW-Bound]

Low income and young people without high levels of education are leaving, the wealthy and better educated are moving in. Most of the people who have left made under $30K.
https://www.sandiegouniontribune.co...thy-people-per-report-20180221-htmlstory.html

"Of those who left during the latest years for which statistics exist, the vast majority earned less than $30,000 per year. A net total of 469,000 of those leaving had no college degree. Given the prevailing levels of rents and home prices in California, it’s easy to see their financial motive in leaving for far lower-priced states like Texas, Nevada, Oregon and Arizona. But as lower-income residents left there was a net increase of 52,700 residents from other states making more than $50,000 per year who do have at least a bachelor’s degree"
https://www.davisenterprise.com/forum/opinion-columns/whos-leaving-california-its-not-who-you-think/

If they wait long enough, perhaps the wealth disparity and housing shortage problems will take care of themselves, when everybody is rich? Or the few people left who provide services to the rich people will be in demand, and can command high enough wages to be not so far behind the people they serve?

Either way, when there are more rich people and less poor people, the new tax will not have to be draconian to work as intended for wealth redistribution. That's the silver lining with the migration pattern of rich-in-poor-out, I guess.


PS. Or will the wealth redistribution program reverse the flow, and bring back more poor people? As I said, it's interesting to see how things will work.

 

[copyright1997reloaded]

It hasn't been implemented in California - just proposed by one legislator.

I am well aware it is just a proposal from one legislator. This discussion has been on whether it is a good or bad idea.

"Intended"?

You read the rules. You play by the rules. So it goes.

And that is indeed why Brewer calls them the morally bankrupt. Talk the talk about how more and more and more taxes are needed to help pay for endless programs, regardless of what does to the long term economic vitality of an area/state/nation. But when it comes to walking the walk, they do everything they can to have it not be them that pays up.

But those days are coming to an end, by the very people they support and the need for never ending new sources of revenue. Instead of just taking income, they will come after accumulated wealth. It will be at first for those edge cases, like the "super" wealthy who have more than $5 million, or a 'transaction tax' to grab some of those windfall profits associated with capital gains, or maybe just a grab at additional taxes on capital gains. That is the easiest to sell, because it only (directly) impacts a small number of voters. But even that isn't enough, because the need to redistribute feeds upon itself. Eventually the measures get more drastic.

 

[Teacher Terry]

It makes sense that lower income people are leaving. I lived in Wichita,Kansas for a few years and if I was poor would probably go back. The COL is very low for a good size city.

 

[Independent]

So maybe such a system is OK in the sense that seniors get to keep more of their income while they are living with the offset that some of it is taxed upon their death.

This. If I had the choice, I'd rather defer my taxes until after I die. The money I had left at the end is money that I had saved for an economic disaster that didn't occur. Once I'm dead, I don't need that money any more.

That said, if one state has an unusually high estate tax, that state certainly runs the risk of older, wealthier people leaving just to avoid the tax. That type of risk is much lower for a federal tax.