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California Legislators Propose a State Estate Tax
Old 03-26-2019, 11:31 AM   #1
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California Legislators Propose a State Estate Tax

Some of our legislators want to impose an estate tax equal to the recent cut in the federal estate tax. Proceeds will be used to address income inequality, including savings accounts for poor people!

https://www.latimes.com/politics/la-...326-story.html

I predict my investments in Arizona real estate will become a lot more valuable, as people with money exit California. It doesn't take much more than a paid for home in the Bay Area or coastal LA and a decent 401 (k) balance to reach the maximum exemption.
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Old 03-26-2019, 11:44 AM   #2
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Well it's just one legislator and he has apparently proposed it before without much traction.

From the article:

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The proposal, if passed by the Legislature and signed by Newsom later this year, would have to be ratified by voters in the November 2020 statewide election. A pair of 1982 ballot measures banned a state-level estate tax, which means any change would have to receive final approval on election day.
I don't know if Californians would vote to impose a state estate tax on estates worth more than $3.5 million or not.

I'm a Californian and I broadly support helping the poor but I may also be one of the heirs to an estate worth more than $3.5 million.

I doubt I'd move out though.
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Old 03-26-2019, 11:57 AM   #3
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So take from those that earned it and give it to those that didn't.

Life in California.
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Old 03-26-2019, 12:20 PM   #4
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Originally Posted by Another Reader View Post
Some of our legislators want to impose an estate tax equal to the recent cut in the federal estate tax. Proceeds will be used to address income inequality, including savings accounts for poor people!

https://www.latimes.com/politics/la-...326-story.html

I predict my investments in Arizona real estate will become a lot more valuable, as people with money exit California. It doesn't take much more than a paid for home in the Bay Area or coastal LA and a decent 401 (k) balance to reach the maximum exemption.
It's the weather, coastline, mountains, and subsequent outdoor lifestyle options, plus robust job market, that keep people here in California. Until a state can offer better, California and it's home-owning residents have nothing to fear. Housing shortages actually continue to be an issue here, as news article after article are currently highlighting.

In addition, it appears to be lower income folk that are moving out, with higher income folk moving in or staying. Again, this is being documented in a variety of news articles.

Be careful with any AZ spec buying as a result!
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Old 03-26-2019, 12:22 PM   #5
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Yup, it's the people with dough that stay.
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Old 03-26-2019, 01:28 PM   #6
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Yup, it's the people with dough that stay.

Stay and move here,too -

Who Moves to California? The Wealthier and Better Educated Mostly
https://www.latimes.com/business/la-...221-story.html
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Old 03-26-2019, 01:39 PM   #7
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We have seen a lot of California retirees sell their homes and move to Nevada. Due to the technology companies arriving we are also attracting younger people. We are getting between 5-7k/people a year moving to northern Nevada. This is starting to result in some of the problems California has which is shortage of affordable housing and more homeless.
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Old 03-26-2019, 01:54 PM   #8
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So take from those that earned it and give it to those that didn't.

Life in California.
Actually it's NOT life in California because we do not have an estate tax here. Last I looked there were about a dozen states that do have an estate tax and some states kick in at very low amounts. Oregon started at a mil last I looked a couple years ago for example.
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Old 03-26-2019, 01:55 PM   #9
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P.S. Here's a nice map of the states that do have an estate tax.

https://taxfoundation.org/state-esta...ance-tax-2018/
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Old 03-26-2019, 02:01 PM   #10
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Will the estate tax be indexed to inflation?
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Old 03-26-2019, 02:27 PM   #11
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Actually it's NOT life in California because we do not have an estate tax here. Last I looked there were about a dozen states that do have an estate tax and some states kick in at very low amounts. Oregon started at a mil last I looked a couple years ago for example.
The estate tax is proposed.

My heirs should not have to give up a very large amount of money for the privilege of me residing here. I will continue to own properties here with a total value under the limit, but I will move my principal residence elsewhere if this passes. And so will a lot of other people that have money and brains. It will be a lot more difficult to bring quality high level people into the state if they know their heirs will lose 40 percent of every dollar between $3.5M and $11+MM.
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Old 03-26-2019, 02:36 PM   #12
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I don't have as much problem with estate taxes simply because the heirs did nothing to earn that money. It is just another form of lotto, where some are lucky enough to have rich uncle/parent/grand parent.

Lotto is taxed, why not estates?
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Old 03-26-2019, 02:43 PM   #13
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Actually it's NOT life in California because we do not have an estate tax here. Last I looked there were about a dozen states that do have an estate tax and some states kick in at very low amounts. Oregon started at a mil last I looked a couple years ago for example.
I can tell you didn't read the article linked.

The prevailing attitude in California is to take from those that earn things, and give it to those that haven't earned it. If you would have clicked on the link, you could have read about todays latest example of this.
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Old 03-26-2019, 03:15 PM   #14
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I don't have as much problem with estate taxes simply because the heirs did nothing to earn that money. It is just another form of lotto, where some are lucky enough to have rich uncle/parent/grand parent.

Lotto is taxed, why not estates?
At it's most simplistic, estates are what is left over from funds that were already taxed in some form. For example, why should an heir have to pay estate tax on the value of an inherited savings account (as part of a larger estate) when the original owner wouldn't have had to pay such a tax while alive?
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Old 03-26-2019, 03:24 PM   #15
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We are seeing implications of the migration eastward to Colorado in our housing market. Actually it has been happening for a while. The townhouse community that I have rentals is experiencing high demand. A friend of mine just listed a unit for the highest price ever in the community and in 24 hrs 32 showings 5 offers. It kind of makes me want to part with all of mine pay the depreciation recapture and take the money off the table. Up until now my disposition plan was probate.
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Old 03-26-2019, 03:46 PM   #16
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We are seeing implications of the migration eastward to Colorado in our housing market. Actually it has been happening for a while. The townhouse community that I have rentals is experiencing high demand. A friend of mine just listed a unit for the highest price ever in the community and in 24 hrs 32 showings 5 offers. It kind of makes me want to part with all of mine pay the depreciation recapture and take the money off the table. Up until now my disposition plan was probate.

Ughh CA people Californicating Colorado
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Old 03-27-2019, 04:39 AM   #17
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Just a reminder that if we do want to talk about proposed legislation we need to stick to the thread topic and avoid snarky comments.
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Old 03-27-2019, 09:56 AM   #18
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Itís understandable that people retiring from CA with houses worth a lot of money want to cash in their homes and move. Many have been coming here because they can buy much nicer homes and have plenty of money left over. Add in low property tax and no income tax makes it easy to understand. We donít have all the services that they are used to but I havenít heard anyone complain. We wouldnít be able to afford to move here now with the price of housing so glad we came years ago.
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Old 03-27-2019, 02:54 PM   #19
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Not a fan of estate taxes. Selling some inherited shares to fund the tax is relatively easy, but selling part of a grocery or farm is problematic.
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Old 03-27-2019, 03:04 PM   #20
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At it's most simplistic, estates are what is left over from funds that were already taxed in some form. For example, why should an heir have to pay estate tax on the value of an inherited savings account (as part of a larger estate) when the original owner wouldn't have had to pay such a tax while alive?
Taxes are commonly levied when valuables, such as money, change hands, even if those particular valuables were taxed previously. It's the change in ownership that triggers much taxation.
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