Michael Tae Sweeney: Even when "all the wealthy people will domicile in other states to avoid the tax!" proves empirically to be false by passing the tax and observing what happens afterwards, they still are like "what if it's true tho"

Even when "all the wealthy people will domicile in other states to avoid the tax!" proves empirically to be false by passing the tax and observing what happens afterwards, they still are like "what if it's true tho"

The recent news from Massachusetts revenue officials that they collected about $1.8 billion this year from the so-called "millionaires tax" sparked chatter: Is the windfall great financial news — or a precursor to an exodus of wealthy residents?

Other states eye Mass. millionaires tax — for windfall or wealth exoduswww.wbur.org States considering wealth tax proposals, like Pennsylvania and Vermont, are taking note of Massachusetts' revenue gains. But at home, the question of whether the voter-approved Fair Share Amendment is...

Some of this happens at the margin. I know a couple who just bought a house in Utah and plan to domicile there instead of CA (in part) for tax reasons. But it's tricky to pull off! You have to be very wealthy, have work flexibility, not care about where your kids live (they're empty nesters)

And maybe you get to Utah and decide it's not actually worth living there 185 days a year and maybe the amount of tax you'd owe if you stayed in California more actually doesn't really make any material difference in your standard of living and stop doing it!

Related ...

MAGA couple flee California for Idaho due to Woke, then sprint back to California a year later after everyone in Idaho is racist toward them and their children: www.dailymail.co.uk/news/article...

Conservative family who relocated from California to Idaho REGRET movewww.dailymail.co.uk Melvin Galang and Coree Ray made the return trip to the blue state this past April - taking to TikTok to make the announcement.

Also, more specific to Utah ...

Meanwhile in places like Utah ... they don't want any Californian "refugees"

Utah governor tells Californians to 'stay in California instead of coming as refugees'www.latimes.com Gov. Spencer Cox said Utah, the fastest-growing state for the past 10 years, is beset by problems including housing and water shortages.

This would be less of a problem if they built more housing and Gov. Cox specifically would stop using all the water to irrigate his alfalfa crop.

But maybe the super rich will just take their money out of the country entirely and into a tax haven overseas? Because they're obsessed with avoiding taxes.

some of that happens but the united states is virtually the only country in the world that will actually at least sorta-kinda go after you if you're a US citizen and attempt to do this

And giving up your US citizenship is a) hard b) irreversible and c) consequential. Unless you go through that you keep owing US taxes.

Irreversible?

The US could absolutely do this in a way no other country could. Just look at the wealth seized from the Russian oligarchs in the first several weeks of the Ukraine invasion. It’s a political problem.

If we told the Cayman islands or Panama or other Caribbean tax havens to knock it off and they said no, we could send one (1) warship there and make them. It persists because powerful people in the United States really want it to persist!

I think a Trumpist authoritarian regime would use financial controls to stop anyone who is not one of their supporters and allies from transferring any wealth out of the country.

No, they’re fine with you transferring it out of the country as long as you transfer it to them at the same time

True

This is why you tax land.

The US is one of the few countries that taxes globally. (I think Iran is one of the other ones) Taking your wealth overseas makes it easier to hide, but since it's illegal to hide it like that you're playing roulette. Now, you can get a credit for paying taxes in another country... but you're still

Paying tax. And the credit is only up to the amount you paid overseas, if the amount was less than what the US would have taxed you, you have to pay the difference. In other word, you end up paying the same total in taxes if you move your money to a so-called "tax haven", just less goes to the US

This is why when the Panama Papers dropped so few of the people in them were Americans, overseas tax havens don't work as well for us. That's what Delaware is for lol

It is both quite hard to avoid the long arm of Uncle Sam, and you have to give up many privileges of US citizenship to do so. Wealth flight between US states and EU block countries is a reasonable concern, but a US federal wealth tax would be a different beast all-together.

in the 1950s here, under Republican President Eisenhower, the tax rates were reasonable. We need to return to those rates and tax ALL income, dividends, all the same.

I don't mean all the same percent of tax..(just clarifying)..the rich should pay a higher proportion of their money because they can afford to do that. The person who gets the most toys does not win the game. There is no game.

There are phenomenally-wealthy people who will do this, but normal boring millionaires* don't have nearly the economic resources needed to make arranging this kind of thing worth it. *I KNOW. But.

Put it in a trust incoporated in South Dakota, that's the latest tax haven

Not to mention that if you’re subject to the tax you can very likely pay it with little pain, aside from any ideological bullshit you might invent to justify avoiding it

I believe I've even seen a headline in the wall street journal along the lines of if you are looking to move somewhere due to taxes you can afford the taxes

I do business all over the country and am often asked about the cost of living in coastal California. I often reply with canned snark, such as : "Cadillacs cost more then Chevys" or "Expensive and totally worth it" or "The housing is cheap, the weather is expensive" Feel free to steal these...

It's hard to value what 280 days a year of PERFECT weather is worth, but to me it's worth a lot (and the other 85 days are not bad) Throw in the coastal scenery, one of the best restaurant & food scenes on the planet and it starts to seem like a bargain

>60 minutes to ocean, >60 minutes to coastal redwood forests, 2-4 hour drive to giant sequoias, the best year round produce in the country, no hurricanes, no blizzards, and the rest of the weather = MORE than worth the CoL

rich people are just like the rest of us, they like low-effort, paper-pushy tax reduction moves instead of having to up-end their whole lives.

easier to do and where I have seen it are places like the Oregon/Washington border where there is a radical difference (high income tax vs none) but it’s rare for a state to have a major city on a state boarder like that + have such a big gap and even then there are other countervailing factors

Portland, OR resident and I came here to point this out. I think it’s undeniably true that “high earners,” which here is any person earning more than $125k or $200k/household, are leaving the city/county/metro, all *three* of which levy taxes on this group heavily in addition to high state taxes.

I would add that this is paired with a fetishistic devotion to means testing on the part of the left here, implementing funding models for schools that explicitly defund schools in wealthy neighborhoods, & near complete failure despite billions in funding to address homelessness and drug addiction.

Are they though? Do you work in local government and have access to the actual tax revenue numbers, or are you just going off of ~vibes~?

oregoneconomicanalysis.com/2023/12/07/w...

Where Did People Leaving Portland Go?oregoneconomicanalysis.com In 2022, 77,400 Oregonians who were living in Clackamas, Multnomah, or Washington counties packed up and left the state. This represented 31,200 households. In total, 9,300 Portland area household mov...

People have a hard time wrapping their heads around this level of wealth. Cost of living is almost completely irrelevant, and you just pick where you want to love based on other factors.

we also should up audits so these people can't lie about their domiciles. they want to live in cities but not pay taxes

a 4% surtax on income, *income*, above a million dollars a year will make basically no material impact on anyone's lifestyle.

California natives, generally, have a very hard time their first Utah winter if they came to the north end of the state.

Previously coastal Californians are frequently also upset by their first eastern OR/eastern WA/ID winter

The kinds of places rich people decamp to tend to be the most expensive areas in those low tax states. So they take a quality of life hit without a significant cost of living difference. You'd have to face huge tax liability to make it worth it. Then you have a medical emergency...

Right? Like these people living in a 3 story brownstone are just gonna up and say screw it and move to the woods of New Hampshire?

I think this actually happened in Portland, though, it does appear people are decamping right across county borders to avoid significant taxes. All the more reason to do this kind of thing at state level!

yes. its much more of an issue when you can literally zip across the river and encounter a totally different tax environment inside the same metro area.

the thing where you can live in vancouver washington and pay no income tax and then zip across the river to do your shopping in oregon and pay no sales tax... not ideal from a policy perspective!

Yeah, that's been a big problem forever, the more recent thing is the Multnomah County taxes (Preschool for All, Supportive Housing Services) where rich people can decamp right across county lines into affluent Washington or Clackamas County communities and still commute into the city

I'm not *against* these taxes but it really does appear we're collecting a lot less than we anticipated because so many people just moved away!

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