Wealthy Taxpayers Could Take a Hit in These 8 States

[Ronstar]

A work friend, when asked for specific plans, used to say “I have a plan to make a plan”. That’s what this (OP link) sounds like. Elected officials and aspirants always have a plan - but it is little more than a plan to make a real plan should the opportunity arise.

My only point is this thread is a straw man. There are always lots of people with ideas on how to raise taxes, and just as many with ideas to do the opposite. Most never see the light of day, which is a good thing.

I agree for the most part. There will be a lot of ideas being bantered about, and maybe that will lead to nothing. It has lead to nothing so far. But now Illinois isn't alone in this. There are 7 other states proposing new taxes. Maybe the politicians think that there will be less backlash if other states are proposing something similar.

 

[Koolau]

Sign me up! I would love to be wealthy enough to be hit by such a deal.

I would too. Then I'd move.

 

[ownyourfuture]

This thread reminded me of the following.

https://www.politifact.com/factchec...cating-us-billionaires-wealth-would-run-us-g/

 

[KarenF]

So you have to run the slideshow to find the 8 states? Too much clickbait.

Anyway I can guess well enough.

It lists them in the article.
Fund Our Future members include Hawaii, Minnesota, New York, California, Maryland, Washington, Connecticut and Illinois.

I had to google how many billionaires in Georgia - google says 18.

 

[marko]

So, another proposition to "stick it to the ultra-rich" that will generate very nominal revenue for the states involved.

Of course these people can "move" whenever they feel like it.

This is politics, not tax policy.

+1
I've mentioned in several threads that it all sounds nice but fails to address reality. The wealthy have far too many options for any of these schemes to work.

Growing up, we had two different neighbors who were "tax exiles" from the UK. Just this past year, my half-time state of Massachusetts passed a 4% surtax on incomes over one million (AFAIK from the first dollar) on top of our 5% flat rate income tax.

Gee, ya think these millionaires don't have a second home in NH or FL? Instead of staying away for five winter months, why not stay in lovely Palm Beach another six weeks? I can think of 40,000 good reasons to do so! Ya think they don't have their accountants working overtime to make sure they only make $999.99k?

It's all so idiotic. You can't "get" these people.

 

[financemups]

good grief so many dog whistles and gross takes in the comments

 

[Chuckanut]

+1
I've mentioned in several threads that it all sounds nice but fails to address reality. The wealthy have far too many options for any of these schemes to work.


Growing up, we had two different neighbors who were "tax exiles" from the UK. Just this past year, my half-time state of Massachusetts passed a 4% surtax on incomes over one million (AFAIK from the first dollar) on top of our 5% flat rate income tax.

A neighbor’s wealthy though certainly not super-rich brother used to live in New England and winter in Florida. Now he lives in Florida and summers in New England.

 

[target2019]

Here's an article about the plan from WaPo. The slideshow above adds Minnesota to the list in this article.

https://wapo.st/3Hkgteg

Thanks for the gift!

“The point here is to make sure we do at the state level what is not being done at the federal level,” said Gustavo Rivera (D), a New York state senator who is part of the seven-state group.

I know why NJ is not in the list. Our plan is to attract more Billionaires so we can have bigger parties at their expense.

 

[Bdarr]

"Greed is good"…I have always been amused by the anti tax people. Just saying. The majority of who I know who bloviate about it are collecting Social security and many VA tax free disability. Then of course there is old and new money. So before you jump on they earned it wagon, let's be clear todays tax payers pay for the services we have and the benefits one gets, not your past taxes. Well there is far more to the story, buy selfish greed and envy are everybody's sin! Cheers. if ya need a safe place I have a airbnb for ya

 

[M Paquette]

Quite a few places tax capital gains just like any other income.

The wealth tax, taxing our intangible assets, should bother any of us ER folks who have a few hundred million socked away to help cover our retirement expenses. Washington state is threatening to tax intangibles over just $250,000,000, a mere quarter billion dollars!

If we’re trying to scrape by on a 3% withdrawal rate, only $7,500,000/year, we will somehow have to come up with an extra $2,500,000 a year in revenue annually to cover the tax bill on that $250,000,000 in assets! At current CD rates, that’s just barely achievable with some careful shopping around.

Rough times, indeed!

(I’ll get my tongue out of my cheek now…)

 

[MarieIG]

I would too. Then I'd move.

I remember our former governor commenting to the effect - come back, I'll cook you dinner!

 

[dmpi]

It's isn't like the 60s. The whole world has been modernized. Even with a few million you can easily immigrate to another country and set up shop over there. A billionaire probably already has a few places overseas. It's a bad idea to unjustly pick on people who has the means to just take their money and resources and go somewhere else.

 

[EastWest Gal]

If you think this will only tax the ultra rich take a look at what is going on in Washington state where an excise tax on capital gains of the ultra rich has been on the books for only two years. The original bill taxed gains over $250,000 at 7%. Note the proposed changes below.

https://www.seattletimes.com/opinion/an-excise-tax-on-income-is-detrimental-to-was-future/

“The initial excise tax is 7%, and targets higher earners, but there is already a bill in front of the 2023 Legislature to raise the tax to 8.5% and lower the payment threshold to $15,000 of capital gains income — while the case is still in front of the courts! That is just the beginning. If the court allows it, you can expect cities and counties in our state to also create “excises” taxes that they can collect outside their geographic boundaries. “

Will the state SC throw it out. I don’t know.

Washington state does not have an income tax.

In Pennsylvania, all income is taxed equally, whether it is from business, employment, capital gains, interest, dividends. Our state income tax is 3.07%. Retirement income is not taxed-Social Security, IRA and 401K distributions. Many billionaires have their excess wealth invested diversely, so, except for the times the market is down, they are generally making more than they can spend.

FireCALC predicts my wealth will increase on an average 4-fold by the time we are in our 90s, spending at the same level I'm spending now. If the choice is increasing taxes to the wealthiest or cutting services to the neediest (children, poor elderly, disabled), I can't see much that is unfair about that. A cut to Social Security would impact a billionaire not at all but could mean the difference between doing without food, a roof over their head, medication, or heat for a disabled person. I was paying utility bills for a disabled friend until she finally SSDI.

And anyone living in the expensive areas where the climate is temperate can see the rise in homelessness. That affects everyone's quality of life. The last time I was in SF (2018) it was a pretty miserable experience compared to the 1970s when I hung out with friends there as a teenager.

 

[W2R]

Quite a few places tax capital gains just like any other income.

The wealth tax, taxing our intangible assets, should bother any of us ER folks who have a few hundred million socked away to help cover our retirement expenses. Washington state is threatening to tax intangibles over just $250,000,000, a mere quarter billion dollars!

If we’re trying to scrape by on a 3% withdrawal rate, only $7,500,000/year, we will somehow have to come up with an extra $2,500,000 a year in revenue annually to cover the tax bill on that $250,000,000 in assets! At current CD rates, that’s just barely achievable with some careful shopping around.

Rough times, indeed!

(I’ll get my tongue out of my cheek now…)

MPaquette, glad you posted! It's been a while. You have such a great sense of humor. I think if 3% was "only" $7,500,000/year for me, I would be totally confused at tax time. LOL

 

[marinauser]

+1. Need to have assets over $1 billion in Illinois to pay the tax. According to the internet, Illinois has 24 billionaires. Not sure how much tax they will generate from 24 people.

They will get zero if those 24 people decide to move to another state. More importantly, if that happens, Illinois will lose hundreds of millions of dollars in tax revenue that they already collect from those 24. When Ken Griffin left, that was over $200 million in income tax lost each year. According to one report, "the top 18 percent of Illinois taxpayers cover more than 60 percent of the state’s income taxes, and the state’s millionaires pay 15 percent of Illinois’ income taxes." When NJ threatened a billionaire tax, David Tepper moved to Florida and NJ lost an estimated $140 million in annual tax revenue. Not sure if he is still in FL or not.

 

[Koolau]

They will get zero if those 24 people decide to move to another state. More importantly, if that happens, Illinois will lose hundreds of millions of dollars in tax revenue that they already collect from those 24. When Ken Griffin left, that was over $200 million in income tax lost each year. According to one report, "the top 18 percent of Illinois taxpayers cover more than 60 percent of the state’s income taxes, and the state’s millionaires pay 15 percent of Illinois’ income taxes." When NJ threatened a billionaire tax, David Tepper moved to Florida and NJ lost an estimated $140 million in annual tax revenue. Not sure if he is still in FL or not.

Someday, I'm hoping to finally see a definition of "wealthy" - and while we're at it, I'd sure like a definition of "fair share" as well.

 

[HawkOwl]

Don’t count yourself safe because you aren’t a billionaire. The same states that soak the rich will do the same to people of more modest means. One of the reasons we left Minnesota was their high taxes on everyone.

 

[aja8888]

A neighbor’s wealthy though certainly not super-rich brother used to live in New England and winter in Florida. Now he lives in Florida and summers in New England.

Pretty much many of my Connecticut high school class does the same. I went to Texas instead.

 

[Mr._Graybeard]

Don’t count yourself safe because you aren’t a billionaire. The same states that soak the rich will do the same to people of more modest means. One of the reasons we left Minnesota was their high taxes on everyone.

Yet I consider Minnesota to be a very successful state. Certainly my home state, Wisconsin, has slipped in terms of prosperity and quality of life relative to the Gopher State. We used to be very close on both fronts.

 

[Koolau]

My only point is this thread is a straw man.

I prefer the term trial balloon in this case.

And, EACH of the 8 states have gone so far as to write a BILL according to the slide show which actually includes these bills. Call it a straw man or a trial balloon - but they ARE a bill which implies at least someone is serious about enacting such a tax. If we all wait until they are passed or defeated, we will lose our right to express our views on said bills.

In theory, citizens are allowed to let their legislators/executive branch know how they feel about (fill in your own term: Straw Man, Trial Balloon, Bill) If this is not the place to do that, I think that should be explicit. Rant and Rhetoric from a previous post hints at inappropriateness. If inappropriate, maybe we should stop now but YMMV.

 

[gcgang]

So, another proposition to "stick it to the ultra-rich" that will generate very nominal revenue for the states involved.

Of course these people can "move" whenever they feel like it.

While they can move, if they own property in “ Paradise” when they die, the state of Hawaii is trying to take a piece.

If I read it correctly, the Hawaii bill (HB151) applied only to NON RESIDENTS. So dey goin afta da haoles dat buy up all da ‘aina.

But we already have an estate tax which hits 20% at $10mm and income tax rates of up to 11% (we’re #1! - even 6.8% at single income over $14,400).

Taxing the rich? Look at Hawaii’s “insulting” graduated income tax rates, starting at 1.4% on your first dollar and having TEN different rates as your income reaches $100k. Probably started out taxing rich when $14,400 was rich. Today the poverty level in Hawaii is almost $100k. Lol.

 

[Chuckanut]

Don’t count yourself safe because you aren’t a billionaire. The same states that soak the rich will do the same to people of more modest means. One of the reasons we left Minnesota was their high taxes on everyone.

The two year old excise tax on capital gains in WA state started at about 7% on gains over $250,000. A bill has dropped in the state legislature to change these numbers to 8.1% on gains over $15,000. Will it pass? I don’t know. We were told that the original excise tax would only hit about 400 of the wealthiest people in the state.

 

[Koolau]

While they can move, if they own property in “ Paradise” when they die, the state of Hawaii is trying to take a piece.

If I read it correctly, the Hawaii bill (HB151) applied only to NON RESIDENTS. So dey goin afta da haoles dat buy up all da ‘aina.

But we already have an estate tax which hits 20% at $10mm and income tax rates of up to 11% (we’re #1! - even 6.8% at single income over $14,400).

Taxing the rich? Look at Hawaii’s “insulting” graduated income tax rates, starting at 1.4% on your first dollar and having TEN different rates as your income reaches $100k. Probably started out taxing rich when $14,400 was rich. Today the poverty level in Hawaii is almost $100k. Lol.

True and an average house is a cool $Mil. Fortunately, we have one of the lowest RE tax rates in the country. Sorta offsets some of the other taxes a bit. Our recent RE assessment went up almost $100K and we still haven't broken the $2000/year RE tax level. Once in a while we say something nice about taxes here though YMMV.

 

[ncbill]

While they can move, if they own property in “ Paradise” when they die, the state of Hawaii is trying to take a piece.

If I read it correctly, the Hawaii bill (HB151) applied only to NON RESIDENTS. So dey goin afta da haoles dat buy up all da ‘aina.

But we already have an estate tax which hits 20% at $10mm and income tax rates of up to 11% (we’re #1! - even 6.8% at single income over $14,400).

Taxing the rich? Look at Hawaii’s “insulting” graduated income tax rates, starting at 1.4% on your first dollar and having TEN different rates as your income reaches $100k. Probably started out taxing rich when $14,400 was rich. Today the poverty level in Hawaii is almost $100k. Lol.

No need to hold real estate in your personal name.

Stick it in a LLC or other obscuring entity.

Who knows who actually owns "Paradise Holdings, LLC?"

 

[MichaelB]

No need to hold real estate in your personal name.

Stick it in a LLC or other obscuring entity.

Who knows who actually owns "Paradise Holdings, LLC?"

The beneficial ownership rule comes into effect in ‘24 and will require disclosure to the US Treasury.