If the Massachusetts tax was called a wealth tax, then that was done by idiots.
An income tax is a tax on income, or money you make during the year. The Massachusetts tax is a 4% tax on anyone making over $1,000,000. It’s nothing out of the ordinary, it’s a tax bracket with a fancy name.
A wealth tax is a tax on wealth, or all the stuff you own. We already tax wealth, when you buy it or sell it, because at that moment we know what it is worth (since that’s what it sold for), we know how much money you made on the sale of the asset, and we can tax you on the money you made. But the bill in California proposes to tax wealth whether it’s sold or not.
The problem with a wealth tax on unrealized gains like the one proposed in California is twofold. First, it creates a negative incentive structure. Second, and perhaps more importantly, if you tax assets when they are sold, you know exactly how much they are worth. But if you own a property and you aren’t selling it, the only way to know its value is by appraising it. Which means the state needs to hire thousands of accountants (or to pay for millions of hours of work from established accounting firms) in order to appraise the wealth of people suspected of being billionaires so we know if we can tax them and for how much.
The reason that Austria, Denmark, Germany, the Netherlands, Finland, Iceland, Luxembourg, Sweden, and France all imposed a wealth tax, tried it out for a while, and then repealed it is that they found that not only did wealth taxes chase business away from their country, they actually raised far less revenue than politicians had promised they would while costing huge amounts to implement due to all the appraisal work that needs to happen.
At the end of the day European wealth taxes raised a fraction of a percent of their nations’ GDP. This is an idea that has been tried many times and thoroughly discredited.
Looking more into the Massachusetts situation - they didn’t have income tax brackets, just a flat 5% tax. So the “Millionaire’s Tax” is quite literally just a second tax bracket for income over $1,000,000 at 9% (5% base plus this 4% tax).
In California, we literally already have this. But instead of Massachusetts’ brackets where there’s just 2, 0-1,000,000 and 1,000,000+, we have 9 tax brackets, where the lowest income individuals pay 1% all the way up to those making 742,954 and up who pay 12.3%.
In other words:
California already has higher income taxes than Massachusetts for individuals making 750,000 and up (12.3% in California to 5% in Massachusetts)
Millionaires in California already pay higher taxes (12.3% on income higher than 750,000 in CA compared to 9% on income higher than 1,000,000)
Lower and middle class people pay less taxes on California because of California’s progressive tax structure
Massachusetts’ “Millionaire Tax” is nothing new to California, Newsom and his predecessors have ensured we have a progressive tax structure that’s even better and more progressive (in this context progressive tax structure means “one that places more of the burden on higher income tax payers”, not "one favored by progressives) than Massachusetts’.
And neither California’s existing structure not Massachusetts’ has anything to do with a wealth tax, which Gavin Newsom is very right to oppose as wealth taxes have failed across Europe.
Yes, “income” is squishy enough when you are looking at very rich people, because they can play games like borrowing against assets instead of selling them. A wealth tax sounds like a catastrophically bad idea, except in certain very naturally defined places. (Property taxes are a form of wealth tax. They have issues. But they tax a well defined and well understood asset.)
I don’t know what ZosterSandstorm meant, but yeah, i think we need to run a man. Probably a straight white man, to win the next election.
I’ve been on Republican mailing lists from time to time. The misogyny of the ads they send me is palpable. I assume they do it because it works.
I am the farthest thing from a tax expert, and as I said I am not super familiar with the CA “wealth tax” proposal. But what I am very familiar with is the scaremongering tactics used by most opponents of taxation in all its forms, and particularly by opponents of taxes on the wealthy. I saw them first-hand during the debate on MA’s millionaire’s tax proposal. The opponents painted an apocalyptic vision of its effects on the MA economy. They were wrong.
You largely make a compelling argument against the wealth tax in CA, Babale. Perhaps it is a bad idea. But this:
is not super convincing. These economies did not crash because they tried a wealth tax. It may not have worked for them, but it was not a “disaster,” it was not apocalyptic, and trying it and learning from it was not necessarily a terrible idea if their citizens wanted to. That’s called democracy.
I don’t think not supporting a wealth tax makes Newsom a bad candidate, for the record. Reasonable people can disagree about economic policies. It doesn’t have to be so extreme that one position on one issue is automatically disqualifying.
Yeah, exactly - you could expand property taxes in lieu of a wealth tax by taxing other forms of property but you just want to watch what incentives you create if you do. And even then, it’s generally hard to say “I am going to tax your property” when it’s not something obvious and permanent like land or a building - for example, we tax cars (a vehicle license fee is a percent of the car’s value, at least here in CA) but of you want to put 100 supercars in a garage on your property that’s hard to tax unless we go around checking for cars every year, so instead we just say “if you want to drive this car on our streets, you must license it, and that’s when you pay”.
And I studied Economics and work in a tax adjacent field, so this is something I’m very well aware of.
If people were calling the Massachusetts tax a wealth tax, they aren’t just scaremongering, they are flat out lying.
There are people who will show you a picture of a fried egg and tell you, “this is your brain on marijuana”. The fact that these people exist does not mean that someone else saying “Fentanyl is bad for your brain” is lying.
The Massachusetts millionaire tax is like weed. A wealth tax is like fentanyl.
Mind you, the Massachusetts tax is far from ideal. Instead of a ‘millionaire tax’ that’s effectively a second tax bracket, I’d prefer to see many more tax brackets so that people making less money don’t pay 5% (before deductions obviously, but still - CA has deductions too!) and people making a million a year pay more than 9%. But it’s within the normal range of tax structures that are tried and true in the US and abroad.
A wealth tax is also tried, but it’s definitely not true.
Those economies may not have outright crashed because of the wealth tax, but that doesn’t mean it wasn’t disastrous. California is the fourth largest economy in the world and rising, despite Trump’s best efforts to drag the whole country down.
Kamala supported a wealth tax and I still voted for her, so I don’t know that I consider it “disqualifying” either. But in a primary, my three biggest concerns are:
A candidate who will oppose MAGA
A candidate with solid economic policy
A candidate with solid foreign policy
A wealth tax is absolutely a deal breaker for me in a primary.
I was thinking in the same sense that some industries are “natural monopolies”, like utilities (and for similar reasons).
Although now that I think about it, even property tax isn’t truly a tax on wealth, because the value of property is reassessed only on transfer of ownership or completion of construction.
Imagine if we had to reassess every properly every year to tax unrealized gain in value?
Also, if a property loses value in a year, does this mitigate other tax burdens that the owner had?
I don’t see a problem with compelling people to volunteer on their tax form the values of all real estate worth more than 1 million or 6 million dollars as verified by an accountant whom they are responsible for compensating. And if that valuation is way low, THEN the state can send an employee to dispute that figure and, if adjudicated to be fraudulent, levy fines. Why bring up the spectre of an army of expensive accountants to do the verifying? Typical rightwing scare tactics.
Because in all the listed European countries that’s exactly what happened, to the point where the little revenue they raised barely paid for the cost of appraising the property?
How is the state going to make the determination that some valuations are way too low without their own appraisers?
I don’t know if this sort of wealth tax is the answer, but the power of the ultra wealthy to harm democracy and institutions, threaten state sovereignty, and do all sorts of other terrible things without accountability or consequences, is an existential threat to long term rule of law and civic life, and I desperately hope we get a candidate who makes the ultra wealthy the public enemy they truly are. No one should be as powerful as Elon Musk and his like. They are as dangerous to our future as MAGA. Public policy should reflect this and break their power and implement accountability.
My state updates the assessed value of property every year. They mostly use a formula, and the value of homes that were sold during the year. It’s not hugely expensive.
They don’t tax “unrealized gain”, they tax a percent of “whatever market value is today”. Whole the assessed value isn’t always exactly in sync with the most likely real value, the relative value (is my house worth more or less than those of my neighbors, and other people in my town) is usually pretty good.
I’m pretty sure this is exactly how my property taxes work.
I’m looking at my 2025 property tax bill (due in 2026) right here on my desk. It is taxing me on the value of property which is a considerable multiple of how much I spent to buy that property. Every year (or maybe every two) the valuation is updated.
To keep it on topic:
Supporting or not a wealth tax would not be a make or break position for me to vote for a candidate in the primary. Lack of a coherent plan to deal with the ultra-wealthy and corporate influence on government and elections would be a quick way for a candidate to lose my primary vote.
Honestly, tax policy is not at the top of my list of characteristics I’m looking for in the next Democratic nominee. I mean, I’m always happier if i agree with the candidate on major issues, but I’m looking for leadership, charisma, and integrity, mostly.
The quite-a-few last posts are not discussing the topic of front runners for the Democratic Party presidential nomination for 2028. The tax discussion is interesting, but it belongs in a different thread. Thanks.
Is it really a serious question? If we’re already doing “my platform is you have to vote for me or you’re a misogynist” 31 months before the election then it’s not looking good.
Persuadable swing voters care about:
-Economic prosperity and stability, real and perceived. Housing costs are a huge issue. YIMBYism is a winner with young voters.
-Crime, particularly perceived crime, particularly perceptions of crime that might be directed at otherwise healthy and law-abiding people. It’s not good enough to point to overall declines in homicides, because most people not involved in drug dealing or abusive domestic relationships are always at near-zero risk for homicide and do not perceive a change there. The fact that you can’t park a car in San Francisco without getting the windows smashed in matters, and it still matters even if it’s not reflected in the statistics because police don’t even bother to take reports on it anymore. You need to be a Joe Biden Democrat who can credibly distance yourself from the pro-criminal wing of the party.
-Large-scale social trends that correlate with chaos. There are not a lot of swing voters who are going to change their vote based on a candidate’s position on foreign policy regarding Israel. People who are highly motivated by that issue in itself are already committed to certain candidates and are not in the center. But there are a lot of swing voters who see violent anarchy at college “protest encampments,” have teenage children, and feel strongly that the government’s role is to reign in that behavior. Similarly, the ICE issue has started to become favorable to Democrats precisely because the behavior of the agents has become indistinguishable from anarchic violence, even though the median voter is fairly conservative on immigration itself.
-Guns: This is a classic single-issue voter trap - keep quiet about gun confiscation and swing voters will stay home or, if otherwise inclined to liberal positions, vote for Democrats. Start in on the culture war against the stereotypical image of rural people and promise new gun restrictions and watch every close race go Republican. Democrats have lost this issue permanently and need to shut up about it, as it can only harm them.
Things voters really don’t care about:
-Gender/trans stuff- Everyone who cares enough about this to change their vote has already done so, they are not persuadable.
-Candidates’ military service, history of scandal or lack thereof, gender, race, mysterious background- This hasn’t mattered in at least two generations. Clinton and Bush both manipulated the system to stay out of Vietnam, no one cared, now it’s 30 years later. The belief in the “decorated veteran running as a Democrat who will compel conservatives to vote for him and treat him with respect” is a delusion in the face of all evidence. Any consultant putting it forward should be immediately fired. Obama growing up in a Muslim culture didn’t stop him from winning, Bernie Sanders having a 20-year mystery period of his life when he had no recorded income is a non-issue even to his opponents, Trump’s abhorrent personal conduct didn’t keep him from winning twice. Nobody cares about any of this, voters actually do vote on candidates’ policy promises and the election must be run on that basis by anyone who wants to win.
-”Qualifications” and “winning debates” - Again, no one cares that Trump had no political experience, no one really believed that Hillary Clinton was the “most qualified candidate in history” or could define what that meant or gave a shit about it, Kamala Harris did not receive a magic treasure chest of 200 electoral votes because her campaign declared that she “won the debate” according to never-defined criteria. There probably won’t even be debates anymore outside of the primaries, they don’t do anything besides provide the opportunity for gaffes and essentially have no upside to anyone in the general election.
-Repeating scripted zingers, meeting Trump tit-for-tat in rude social media postings, endorsements from Beyonce, candidates doing TikTok dances- Total waste of time from the type of out-of-touch campaign staffers who think they are running for president of TVTropes, does nothing to win votes, bewilders average people.
What do the Democrats need?
A candidate who will run a campaign based on credible policy promises to address economic and crime concerns, not personal characteristics or hectoring about how you “have to” vote for them or be a bigot. Nobody whose record is running to the left to win Democratic primaries in California with screwball ideas that median Pennsylvania voters hate. Laser focus on “this is what I am going to do as president” not “this is who I am” or “here is a bad thing Donald Trump did.” The answer to every loaded question about gun control or trans athletes is “I’m here to talk about [crime]” or “what’s important is [proposal to get more apartments built].”
Someone like Josh Shapiro or Roy Cooper who has a proven track record of doing the above and winning real elections in swing states is a good choice. There’s nothing inherently wrong with running a woman, if it’s someone who meets the criteria and not a Kamala-esque lightweight who has failed upwards and is running on “vote for me or I’ll call you a misogynist.” Maybe Abigail Spanberger down the road.
True. However, saying something like “we will work to keep guns out of the hands of criminals” cant hurt and might help.
More or less.
News-
Transitional kindergarten’s expansion is one of Gov. Gavin Newsom’s signature educational achievements and a key part of his legacy on how California cares for its youngest residents. … The first governor in decades to hold the office while raising young children, he had promised to achieve universal preschool — publicly funded preschool for all families who want to enroll — and expand access to child care for working parents.
I’ve been going down a rabbit hole of Jon Ossoff videos lately. I like what this guy has to offer. Red-state dem, millennial, handsome as the day is long, has had the backing of Black leaders in every race he’s run (Hank Johnson, John Lewis, Stacey Abrams), has an easy presence in AA churches, had the support of Bernie Sanders yet won a statewide election against a well-known incumbent in Georgia, fantastic communicator, boldly taking on Trump and his admin, has a great online presence and seems to motivate the youth.
Could he stand to cook a little longer in the Senate before making a run for the WH? Sure, but like Obama, he may find 2028 is his time. Could he be seen as a little too supportive of Israel? Maybe, and this may be his biggest weakness. But I think he’s a savvy politician and could possibly find a way to move on this.
Some vids:
I think he’s worked his way into my top 3:
Pritzker
Warnock
Ossoff
I’m interested in hearing what, besides youth/inexperience and ties to the Israel lobby, might hurt his chances.