thegreatdivide
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This is why governments can no longer rely on taxation to fund vital social services:
(Daily Mail)
Billionaires plotting to flee California over proposed super wealth tax
Venture capitalist Peter Thiel and Google co-founder Larry Page are among those plotting to flee, according to The New York Times.
Three companies associated with Page have filed documents of incorporation in Florida, the outlet reported.
Tech investor Chamath Palihapitiya also confirmed earlier this week that he has given 'serious consideration' to relocating to Texas if the measure goes ahead.
He said: 'The inevitable outcome will be an exodus of the state's most talented entrepreneurs who can and will choose to build their companies in less regressive states.'
My comment: there is no limit to greed, and indifference to disadvantage.
The threats come in response to a ballot measure proposed by the Service Employees International Union-United Healthcare Workers West union, which was cleared for campaign by the state Attorney General’s Office.
The union proposes hitting Californians worth over $1 billion where it hurts most with a 5 percent tax on every dollar of their vast fortunes.
High-net-worth tax and immigration adviser David Lesperance admitted that nearly all of his clients are 'taking steps as quickly as possible both to sever California residence and to move assets out of the state', according to the NYT.
Miami real estate agent Brett Harris also told the outlet that five California billionaires had already contacted him, exploring a move to Florida to 'offset their risk of exposure to the billionaire tax'.
However, Harris noted, if the measure fails, those same billionaires 'may end up moving back to California.'
According to the union, the measure aims to tackle the 'growing gap' between hefty executive salaries and the real-world challenges faced by patients and frontline staff.
'At a time when healthcare executives are collecting multimillion-dollar paychecks while patients delay care and frontline workers struggle to make ends meet, it's clear the system is broken,' ultrasound technologist Mayra Casteneda said.
'This initiative is about putting healthcare dollars where they belong - into patient care, safer staffing and expanding access - instead of rewarding healthcare executives for maintaining a status quo that puts profits over patient care.'
One term of the measure would cap pay for executives, administrators and managers at both nonprofit and for-profit hospitals and medical groups at $450,000 per year.
My comment: there is a problem even with the gap between those earning a ('mere') half a million, and those actually on the frontline of service delivery; and yet the state's billionaires want to run away....
Californians with $20 billion in assets would also owe a one-time tax of $1 billion, with five years to pay under the proposed measure.
This means that Page, who is worth roughly $258 billion, would be hit with a $27.5 billion one-time tax, while Thiel, with $27.5 billion, might owe $1.2 billion.
The union said the proposed tax could generate up to $100 million from roughly 200 billionaires, potentially offsetting federal budget cuts, as reported by the NYT.
However, California’s Legislative Analyst’s Office and Department of Finance project that the wealth tax 'would collect tens of billions of dollars' in one-time payments.
Suzanne Jimenez, the union’s chief of staff, said some ideas in the proposal stem from her belief that California billionaires are the 'most fortunate people in this state'.
'We looked at how could we generate the revenue to fix this kind of hole, and this group of folks just made sense,' she told the outlet.
Thiel, who runs a personal investment firm in Los Angeles, has reportedly begun seeking to open Thiel Capital - an office for his firm - in another state, according to three close sources who spoke to the NYT.
Two sources familiar with the private discussions told the NYT that Page, a longtime Palo Alto resident, had discussed leaving California before the end of the year.
Governor Gavin Newsom and Silicon Valley investors have also criticized the measure, with Newsom describing the proposed wealth tax as 'not pragmatic,' as reported by the outlet.
A spokesman said the governor continues to oppose 'state-level wealth taxes', arguing they give people an incentive to relocate to another state.
Newsom has even raised funds for a committee dedicated to opposing the measure, which has since received a $100,000 donation from venture capitalist Ron Conway.
But tax advisor Lesperance said it would be a lengthy and challenging process for people to successfully claim non-residence in California, according to the NYT.
My comment: note the so-called "progressive" Newsom (D) is also against wealth taxes - unless the federal government wears the opprobrium for imposing them.
Meanwhile, the state's Department of Finance warned that California could lose hundreds of millions annually in income tax revenue if these billionaires were to leave, according to the outlet.
The wealth tax debate emerges amid widening income inequality in the United States, which increased consistently over a 33-year span ending in 2022.
The result is striking, according to data from the Congressional Budget Office. The top 10 percent hold 69 percent of the nation's riches, while the bottom 50 percent share a mere 3 percent.
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