> The land value tax can’t be dodged by leaving nor can it be passed on to renters.<p>In what sense can't it be passed to renters? Esp if all landlords in the market were faced with a new land tax that they had not previously planned for, why would it not be passed on?
That cost will, of course, be passed on to renters unless the rental prices cannot be raised at all.<p>If they can't be raised, and the costs end up being ruinous to the landlords, they will find other solutions like mass arson. That isn't hyperbole; this was a serious problem in the 1970s:
<a href="https://en.wikipedia.org/wiki/1970s_South_Bronx_building_fires" rel="nofollow">https://en.wikipedia.org/wiki/1970s_South_Bronx_building_fir...</a><p>That was obviously not acceptable... but it was predictable.<p>All legal proposals should be viewed like a chess move. Presume others will respond, and make you're ok with that response.
Rent is a function of supply and demand, not a landlord's costs, otherwise we would expect changes in e.g. mortgage interest rates to be passed on to, but in practice we don't see this effect. We also don't see landlords who own their properties outright (and thus don't have mortgage interest costs) charging lower rents than landlords in the neighborhood with identical properties who have mortgages. When landlords' costs drop, do they drop the rent in response?<p>Taxes can be passed on when the tax induces a change in supply. Conventional property taxes are partially passed through because the component of the tax that falls on the building. Tax buildings, get less buildings.<p>Taxes on land do not affect the supply of the land, this implies they are not passed on and the research literature largely agrees with this.
Rents are already as high as renters can bear. If a tax is introduced, you'd expect landlord competition to drive down the landlord margins, not increase rents.
LVT is incoherent, it pretty much only benefits people who are cash rich and land poor. Which is why it gets so much oxygen from tech elites with lots of cash and an inability to buy a house somewhere like mill valley, or wherever.<p>Essentially taken to the logical conclusion, there will be people competing for more cash to pay their increasing taxes on the same land, it doesn't fundamentally solve the problem. It's such a joke.
Wealth taxes are a symptom of a broken tax system. If you let someone get to hundreds of billions in net worth and <i>then</i> realize they haven’t been appropriately paying back into the system, it’s already too late. Like the article says they can simply say “no” in a variety of ways, from fighting in court to simply leaving.
> If you let someone get to hundreds of billions in net worth and then realize they haven’t been appropriately paying back into the system<p>This is to once again mistake net worth for money. Net worth is not real. It is not a good measure of the money someone may be able to realise. They do not have hundreds of billions. There is nothing to tax until they sell some shares.
It's strange that people always make this argument for wealth taxes, but you rarely hear it about property taxes. If "net worth is not real" neither is equity in real estate.
The only reason it works with real estate is because they can put a lien on the house and block the sale of it. They don't have any useful mechanism to stop the sale of a share of stock, but since the government is involved in the transfer (due to the registering of the new house deed) of a house, they can stop that one.
> They don't have any useful mechanism to stop the sale of a share of stock<p>The SEC exists. As do many other mechanisms by which the government regulates direct and brokered securities trades and sales. You can make the case that some of those controls are poorly/ineffectively implemented, but you can’t claim that it’s not something the government routinely regulates, intervenes in, and sometimes prohibits outright.
Why can't govt block the sale of stocks? It's not like you would be selling non digitalized assets, govts often freeze and reverse stock sales/trades when they find it to be illegal already.<p>It's harder for private companies sure, but who will stand in the way of govts if they said we will sanction your if you buy X or Y company?<p>This entire argument doesn't really hold IMHO
If I sell my house, there's a reasonable expected range of money I can expect for it.<p>If a majority stock holder in a company sells all of their stock, the price first the first share sold is likely going to be completely different (and substantially less!) than the last share sold.
It's like saying cash isn't real until you spend it. Which is true in one sense but not what they mean.
You are ignoring the most common approach, borrow against the asset. In that case the sufficient assets turn into essentially unlimited untaxed cashflow. Especially with how the market has been lately, the gains erase any burden of the loan. Sounds like a broken tax system to me.
> Net worth is not real.<p>Good way to find out it this is the case: take it away. Not real, right? Why would they mind?
There is no way to take anything like that. Net worth is quite similar with me saying you are worth 1 billion dollars, but you have zero money in the bank. What do you take, super-rich billionaire person?
The net worth is simply the sum of assets minus the sum of liabilities. Take away the assets and you take away the net worth. I can't think of an asset category that you can't transfer if you are willing to sacrifice its value (which presumably doesn't matter, because it's not real anyways)<p>In the rare cases where contract law makes the transfer impossible legally the government could trivially step in to make it possible
You take control of the shares and distribute the proceeds and make it impossible to leverage them for loans, credit etc.<p>Is it Zuck's networth or salary that makes it possible for him to own his ranch in Hawaii?
Because that would involve seizing assets? The parent meant it's not "real" in the simple-minded sense that people think it is: the average person imagines Elon Musk and other billionaires have a checking account that keeps increasing by tens of thousands of dollars per second because that's the only frame of reference they have. The reality is the wealth is mostly tied up in assets that ain't exactly liquid. Yes yes, they apparently have access to this supposed infinite money glitch where banks will endlessly loan them money without requiring interest payments (which would require liquidating assets for payment and therefore triggering a taxable event, the very thing people think never happens for billionaires). But the fact of the matter is the wealth isn't money in a bank, and therefore not "real" in the sense the parent was referring to. But it is at the same time something they would miss if it was just "taken away", much the same way you'd miss the numbers in your 401k if voters decided you had a few too many millions saved up for retirement.
Try this - go to a bank and say “I’d like to borrow money using my 401k/Roth IRA as collateral. If I fall behind in payments you can liquidate the entire thing, including penalties, and make yourself whole.”<p>You’d think they’d jump over each other to lend money against such a stable, secure asset right?<p>Except they’ll say “sorry, this isn’t allowed. IRS treats borrowing against an untaxed retirement account as an early withdrawal, even if the asset itself stays untouched.”<p>Turns out the government fully understands the concepts of stocks, gains, unrealized net worth, and has laws on the books to make sure you are being taxed appropriately for them.<p>Meanwhile billionaires have convinced you – through their machinery of media, influencers, politicians and more – that this exact same reasoning absolutely cannot be applied to their own wealth. Because it’s “paper money”. It doesn’t exist. There’s nothing to tax. Just cannot be done, or it’ll bend the laws of spacetime.
I’d be willing to take some of the “not real” money.
Absolutely ridiculous statement, it's not an accurate measure but it's definitely a good measure of money.<p>If you have 100B to your name even if it's post IPO stock in a possibly ponzi company that's your current wealth and you can easily convert a staggering portion of it into material realized wealth depending on several factors.<p>If I use cash to buy 1B dollars in Microsoft shares today, am I not worth a Billion dollars...?<p>The value may not be exactly convertible agreed so let's just force everyone to book all gains every year, and force sell a net percent of your share.<p>Not 100B$ of share, but 2% of 100 Million units of stock that you own. Why does this not work?<p>If I take 2% of your shares why can't it work the same way? I can then pick and sell it over the next year or two however I see fit, in case of govt they can slowly sell back this share to not affect the prices too much.<p>I am baffled by the fact that we have a tractible quantity and people call it hard to use to measure money.<p>Paintings, Jewels, etc. are what's truly the hard part of the wealth equation not the stocks, which is over 99% of what a wealthy billionaire owns.<p>I am not even considering pro or against taxes on billions people make but it's ridiculous to say stocks aren't money? Then what is money really... Currency is also traded, it's value can also go up or down....
I dont know why it's so complicated to just say "Money is Money when it's Liquid, tax it then". Any loans on wealth should be taxed..nationwide.<p>But even in California's case this doesn't feel like anything anybody would object to. Given how much California Billionaires liquidate using loans on their wealth, I bet, they could do a middle class tax cut too to offset it a little bit too.<p>I am little baffled as to why the politicos haven't latched on to this whole-heartedly. You can still proudly say you're taxing Billionaire wealth. Because you are! Just more sensibly.
Simply let them pay the tax with shares. Problem solved!
I hate this argument.<p>Would you rather have 1M dollars in cash or 10B in stock that you can't sell?
Larry Page owns about 5% of Alphabet, which is worth $4T, so he has $200B give or take. Which part of that do you think reflects a "broken tax system"? Companies should get kneecapped if their market cap gets too high? Founders shouldn't be allowed to keep even a single digit percent of the company?
The part where he has access to essentially unlimited untaxed cashflow by borrowing against that asset. Especially with how the market has been lately, the gains erase any burden of the loan. Something has be done about this, at least. Otherwise broken sounds about right.
The broken part is that there is third world-level poverty on the streets outside Google’s offices, working class people cannot afford to live in the Bay Area, and a fifth of California lives in poverty.
I agree that that's the major problem; the poverty is inexcusable. But that's not caused by the $300B (or whatever) of equity. It's caused because the homeowners of the Bay Area decided that once they got a house, nobody else should, and that they should get to exclude others from the opportunities they had.<p>This same thing was observed during the Gold Rush in California in the 1800s; extreme wealth also resulted in extreme poverty. And there's a great way to solve this: tax the land and redistribute it equally to everyone. Land can't be moved, it's something that belongs to all of us, and you can't make more of it.
This is almost completely traceable to Californians' failure to allow sufficiently dense housing to be built on their doorsteps. The only thing Larry did was bring prosperity to the region.<p>(I'm in agreement with the thesis of the article)
More taxes should solve that.<p>Read somewhere that SF spends roughly 50k$-80k$ per homeless person per year.<p>Taxing more doesn't solve a massively inefficient system at it's core. Just like US education, we spend more than any country on earth, why is it still bad?<p>Answering that question with a "if only we had more money" is a really poor argument. The CA tax fundamentals are bad, pooring more cash onto the fire will not fix that.
Sure. A lot of that money doesn't even make it to intended recipients because of corporate welfare.<p><a href="https://youtu.be/YKAD7l1a9hc" rel="nofollow">https://youtu.be/YKAD7l1a9hc</a><p>In addition, there should probably be changes to laws/regulations to address companies that exploit the poorest.<p><a href="https://youtu.be/U9Rls-_7LdQ" rel="nofollow">https://youtu.be/U9Rls-_7LdQ</a><p>And, many people who are poor have persistent mental/physical disabilities, so part of that spending is because many of these people have it the hardest.<p>With that said, we could likely fix all of these things and significantly unequal wealth distribution would still result in a lot of poverty.
If money isn't solving the problem, you're just not using enough.
This has basically nothing to do with with market cap of Google or Larry Page's percentage ownership of it; and the state government taxing it more will not make this situation any better.
Yes. No one person should have assets worth as much as the GDP of Qatar.
Sure, yeah, but which of the two numbers I was multiplying together is, in your mind, too big, and should be made smaller, and by what mechanism?
> Companies should get kneecapped if their market cap gets too high?<p>Yes. They should be broken up because competition is good for consumers and society. If we had functional anti-trust enforcement Google would not have a near-monopoly on search ads where they own both the ad inventory and the marketplace where you have to buy those placements.
Yes perhaps there should be wealth caps. Did Larry Page really do 5% of all that labor that made google as big as it is? And should a single company get so big and have so much power? Yes, I get that they took risks and invested early, and we shouldn't take away that type of incentive, but perhaps it should have caps, or an S curve tax schedule.
This fundamentally misunderstands how this paper wealth actually works.
If you let someone get to hundreds of billions in net worth and then realize they haven’t been appropriately paying back into the system, it’s already too late. Like the article says they can simply say “no” in a variety of ways, from fighting in court to simply leaving.<p>It's only too late if you're timid and wimpy.
And care about the rule of law. You cannot pass retroactive laws, you cannot pass laws that target individual people. If you pass a general law (which could very well have reasonable objections), people have to have a chance to leave.<p>"I'm passing this law that is effective the exact millisecond I sign it, tough shit if you don't like it" is tyranny and despotism. But based on your comment I think you know that.
> And care about the rule of law. You cannot pass retroactive laws, you cannot pass laws that target individual people. If you pass a general law...<p>A wealth tax is <i>not</i> a retroactive law, nor something that targets an individual person. It's a "general law" in your parlance. Think about it.<p>> If you pass a general law (which could very well have reasonable objections), people have to have a chance to leave.<p>I don't think so. By what legal authority is that required?<p>> "I'm passing this law that is effective the exact millisecond I sign it, tough shit if you don't like it" is tyranny and despotism. But based on your comment I think you know that.<p>No, it's not, and don't be ridiculous. When they passed laws against date-rape, would you have judged it "tyranny and despotism" unless the law was delayed to give the date-rapers time to finish up the date-rapes they'd planned?<p>There's no justice in giving the wealthy the maximum opportunity to pick and choose the laws that apply to them.
the FTB is anything but timid and wimpy<p>if the voters and legislature have the “bravery” to pass the wealth tax law, it will be aggressively enforced by the FTB<p>the second-order effects, whatever they may be, would be clearly visible within a couple years.
Or if people can easily move. Or if you want the next generation of startups to operate in your state.
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If the $100B+ was created through ownership of a company and is unrealized wealth, how would you have taxed it if not through a wealth tax? Nobody is getting to $100B by way of income.
I agree the proposed wealth tax is a bad idea, but raising property taxes is probably not viable. They are incredibly unfavorable to voters. No one who owns a home wants to pay rent, that's why you buy in the first place.<p>Personally, this is why I am fine with higher income or sales taxes.
Sales Taxes are the worst ones. Burden on seller, burden on buyer, regressive. Income is more fair but easy to mask-out for the wealthy. Property is meh, Wealth tax is the best one. Assuming all were well designed.
Man discovers prop 13. News at 9.
Whats wild is the commercial side didn’t get closed. I understand the argument for individuals or households (I don’t love it - I’m on the wrong side of it, but at least it’s somewhat defensible), but if you’re running a business and your income isn’t keeping up with inflation, that’s called failing.
And it will never be repealed.<p>Old voters like the house they brought 20 years ago for 100k being worth 1.5 million today. They also like not paying taxes on that 1.4m in wealth accumulation.
I think not wanting to pay some yearly tax on that $1.4 million because the government pretends that the same as having $1.4M cash in the bank, or making $1.4M in a year, is fine.<p>Not wanting to pay the property taxes associated with a $1.5M home is the problem.
Is it not that the gains are unrealized? If they sold the house they would pay capital gains tax?
I mean, I do too. Mine just happens to have been bought before the last inflationary cycle.
But let's be clear: Prop 13 is bad and is holding down property taxes on both commercial and residential land.
But neglects to consider why it won a majority of votes. Why did it? And how does Prop 13 relate to the more recent Prop 19, which substantially weakened it?
> News at 9.<p>The idiom is "film at 11."
If the tax is calculated based on residency at the time it was earned or granted rather than when it vested or was sold then it doesn’t matter if they leave.
ohh look. a billionaire shill
It's the single taxers again, with a new argument.
"I'm livin' to keep warm, you livin' to pay rent [...] Bitch, I made my moves with shackled feet"<p>- some Kendrick guy
I think the point of the article is correct; the issue with CA is everyone wants to live there, including rich people. If we try and tax them then they'll leave just long enough to not pay state income tax, if we tax property values then the state actually gets the tax and doesn't miss out on job creation or future revenue.<p>Red states have implemented low income tax with heavy property taxes (think Texas) with great results. and although I'm sure California would just manage to mess it up it's a great idea.
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The tax system in Texas is a better system. Sure, Texas has lots of problems. That doesn't mean there is nothing to learn from Texas.<p>I live in Texas. I don't like the restrictive laws. Texas could learn a lot for California, just not in the areas of taxation
The lack of a progressive income tax structure gives texas few levers to ameliorate budget issues without cutting services or raising property taxes. It doesn't help the current governor seems to be pushing city budgets to the brink by also cutting off the property tax lever.<p><a href="https://www.texastribune.org/2026/08/17/texas-city-budgets-cuts-tax-hikes/" rel="nofollow">https://www.texastribune.org/2026/08/17/texas-city-budgets-c...</a>
Out of curiosity, why couldn't property taxes be progressive? What stops Texas from having different tax rates based on the value of the property?<p>It even seems like it avoids a lot the pit falls the uber-wealthy use to avoid most progressive income taxes. Its easy to disguise income as something else. Property, though, is right out in the open. The state can easily audit and value property and send the bill. No matter how fancy the accounting, that bill will eventually reach the person "consuming" that property.
Nothing I'm aware of stops that.<p>In practice, at least from what I've read, in TX, the largest/wealthiest companies get the biggest/best tax breaks (eg Tesla), and end up paying proportionally less, so it's somewhat regressive.
Better, or better for you in particular?
> Shari-yall<p>Made me laugh while drinking; messy, but worth it for the smiles I'll have every time I remember it! Outstanding job, internet stranger.
It’s pretty easy not to murder babies.
Two things:<p>1. If wealth was only motivated by taxes and was going to leave, it would've left already. Fact is, billionaires don't want to live in Tennessee;<p>2. Nobody is doing the right thing to tackle any of this, including California.<p>The article mentions California has land and that's the key point. Unfortunately, California homeowners have been coopted into voting against their own interests to raise property values. If the house you bought in SF in 1975 for $80,000 is now worth $3M, you still only own 1 housing unit's worth of wealth. And that housing cost is an input into everything you need to buy because all the workers required for those things have to be paid high enough to pay those exorbitant rents.<p>Let me repeat that: high housing costs are an input into everything that you buy.<p>So what needs to happen? We need to stop treating housing as a speculative asset. It's simply stealing from the next generation. Worse, it's diverting investment capital from productive output because land has become the asset with the best tax treatment, highest returns and most government protections. So what does this look like?<p>1. Some form of land value tax. The higher the value goes, the higher the taxes go. You raise the rent and your land value taxes go up because it's more valuable;<p>2. Punitively tax land hoarding including second homes. We could give discounted rates to primary residences of state residents. Nobody else should get a discount. This would mean repealing Prop 13 and that's never going to happen. As an example of this, I'll bring up Prop 19. In CA you can inherit a preferential property tax rate. Prop 19 proposed to limit this to only one property could inherit this preferential rate and it barely passed (51% IIRC). Do we think that 49% of California voters have multiple properties that have property tax rates set 40+ years ago? Of course they don't. It's an example of how people vote against their own interests;<p>3. Part of what sold Prop 13 originally was the idea of pushing seniors out of their homes with property taxes. Well, that gave Disneyland a tax rate that was set in the 1960s. California should do what Texas does: you can defer your property taxes until you die if you're a senior but there's no capped property tax rates like incumbent SF residents have and no inherited preferential property tax rates;<p>4. Wind back the preferential collateralization of property for mortgage debt over time. Residential property lending now dominates bank lending and earnings. It's significantly harder to get finance for any form of productive output;<p>5. Wind back over time preferential tax treatment for home ownership.<p>Do I think any of this will happen? No.<p>Oh, one of the worst things to do is transaction taxes, often called stamp duty. This is where you pay a percentage of the value on purchase. This really hurts mobility. I guess it's fine if it's only on the luxury end of the market (CA's is at $5M+?) but it's not a good idea regardless.<p>The other part of this is to provide social housing like Vienna. The government should be a significant supplier of affordable quality housing.
> We need to stop treating housing as a speculative asset.<p>Something I've been yelling from the rooftops.<p>Housing can either be affordable, or it can be an investment that's bought, rented, and sold for the sole purpose of profit. It's not possible for it to be both.<p>People expect their house to appreciate faster than inflation, but all that does is rob the next generation of home ownership.
>. The land value tax can’t be dodged by leaving nor can it be passed on to renters<p>ROFL what? I'd bet the author a lot of money that costs WILL roll downhill, the source matters not.
I think the idea is that if the market demand is such that it allows them to raise rents, they'd already have done it, whether or not expenses justify it.
Economists for generations have agreed a land value tax is the least prone to this problem. You might want to take it up with Adam Smith.
Yeah, that's unlikely. There are certain classes of renters it can't be passed on to during their rental term, but I'm guessing it can and likely would in general.<p>People can also sell their land/homes and move. It's less liquid than other assets, but less doesn't mean people won't sell/leave.
In Massachusetts it’s legal to pass on real property tax increases during the term of a residential lease, provided the lease contains specific clauses. (Most leases do, as a result.) And most commercial leases are triple-net, meaning the tenant is also on the hook for increases.<p>I would be surprised if most land consumption taxes (whether structured as property or land) would not get directly passed through to the beneficial consumers of that land quite quickly, or for their privilege to consume that land to be terminated/non-renewed at the expiration.
One of the benefits of a land value tax is that it has zero dead weight loss: because there's a fixed supply of land, the tax won't cause less of it to be around, and you don't lose out on the beneficial transactions that property tax can prevent.
In California some percentage of certain developments need to be rental controlled, so those are exempt from increases for those lower income folks, but I'm sure the difference would be spread out among everyone who isn't rent controlled.
I'm curious what costs you think will roll downhill and why
I ctrl+f search for "gentrification" and nothing pops up. I close the Substack blog and proceed with my day.
I hope we agree that we need more taxes, it doesn't matter if they are taxes on billionaires, taxes on property, taxes on sales, taxes on crypto, or taxes on the poor. Without taxes we can't have a civilized society.
The number of different taxes is constantly increasing, obfuscating the total tax burden, and making democratic accountability almost impossible. Additionally, tax collections are already at a historical high, while government deficits world-wide are also at record levels, with services on the decline, and no realistic prospect of balancing budgets. This is true for most western countries.<p>Given the current situation, I do not agree that "we need more taxes", but would welcome your clarifying exactly what you mean.
For a long time I agreed with you, but seeing how the tax money is spent I cannot agree any longer. In most cases government is no longer even spending the money itself, instead it is giving the money to NGOs.<p>I would much rather see people keep more of their dollars and use them to 'vote' for the products and services that benefit them most, via their purchases.
Taxes aren’t 0 right now, nor particularly close for anyone being taxed. Your statement supports taxes as a concept at all, but what’s the specific argument that they must be more than they are today?
No thanks, I too much in taxes as it is. California has a spending problem, not a revenue problem.
I think we should start with changing taxes on corporations/companies, specifically being able to indefinitely write off expenses against income regardless of size/etc...<p>Most companies take profit eventually, but if it's possible for a company to decide to never take profit and grow/acquire perpetually without paying any taxes on gross income, that's a problem.<p>That'd be like individuals being able to deduct living expenses and having uncapped pre-tax 401k contributions.
this is the sadest assertion i've ever seen. if sucking the life out of people is the only way people can remain civilized then we are truely lost.
The ratio of the economy that gets collected as taxes has only gone up over time. Do you have an idea for how much should be collected as some ideal ratio? At what point do the effects of taxation become counterproductive?
Well, the general economic consensus is that for income taxes, the revenue-maximizing peak of the Laffer curve is around 65-70% [1]. Revenue maximization isn't necessarily the right primary goal, though.<p>[1] <a href="https://en.wikipedia.org/wiki/Laffer_curve#Income_tax_rate_at_which_revenue_is_maximized" rel="nofollow">https://en.wikipedia.org/wiki/Laffer_curve#Income_tax_rate_a...</a>