If you tax them, will they leave?

What Is Being Taxed and Why It Matters

• Several comments distinguish between taxing realized income/profits vs taxing wealth or unrealized gains.
• Critics argue current systems already strongly incentivize reinvestment, job creation, and growth; taxing company value or unrealized gains is seen as changing the rules mid‑game.
• Others reply that growth relies on public goods (infrastructure, education, rule of law), so taxing the gains from that environment is not “punishment” but paying for what enabled the growth.

Wealth Taxes, Unrealized Gains, and Investment Incentives

• Strong worry that taxing assets or “company size” would discourage building large firms and industrial infrastructure, or push toward command‑economy solutions.
• Counterpoint: no country taxes pure reinvestment directly; most proposals target extreme concentrations of wealth or unrealized capital gains, not ordinary business growth.
• Norway and France are cited by opponents as examples where wealth taxes supposedly backfired via revenue loss and flight; others question methodology and note these countries still score well on well‑being.

Do High Taxes Make the Rich Leave?

• Evidence cited: modest but statistically significant millionaire migration from high‑tax to low‑tax jurisdictions; concrete examples include UK outflows and some US state moves (e.g., Washington→Florida).
• Others note that absolute numbers of rich in high‑tax places (NYC, Massachusetts, Norway) are up, and many wealthy value amenities, roots, and stability more than marginal tax differences.
• The California one‑off wealth tax is criticized as a desperate, retroactive move that signals future grabs, encouraging pre‑emptive exits and eroding a tax base already highly dependent on the top 1%.

Inequality, Social Contract, and “Do We Need Billionaires?”

• One camp calls billionaires and large asset‑holders a social menace: distorting democracy, inflating housing, and capturing most gains while wages stagnate. Some argue society could simply “take their stuff” or impose hard wealth caps.
• Others shift blame toward real estate dynamics and older asset‑owners, or argue that extreme entrepreneurs are rare, their traits not evenly distributed, and harsh redistribution risks mediocrity and lower growth.
• Broad concern appears about rising inequality as politically destabilizing, even among those skeptical of punitive wealth taxes.

Money Flow, Buy‑Borrow‑Die, and Fix Ideas

• Repeated focus on the “buy‑borrow‑die” strategy: huge paper gains used as loan collateral to fund lifestyles and political influence while deferring or avoiding tax.
• Suggested fixes:
  • Treat large asset‑backed loans as realization events for capital gains.
  • Eliminate step‑up in basis at death, giving heirs time‑limited windows to pay tax.
  • Tighten or ban stock buybacks.
• Objections: these rules would be complex, invite avoidance engineering, and could have side‑effects on mortgages, small businesses, and broader capital formation.

Fairness, Tax Design, and Side Debates

• Long sub‑thread on whether taxes are “punishment” vs behavioral tools; some accept using tax as incentive/disincentive (EV credits, mansion taxes), others reject framing at all.
• Sharp disagreement over “fairness”:
  • Some favor flat or consumption (sales) taxes as conceptually fair because they tax production/consumption symmetrically.
  • Many others call sales taxes regressive, noting poor households spend nearly all income, while rich can save and are barely affected.
• Georgist land‑value taxes appear as a proposed compromise: tax immobile land and rent‑extraction rather than productive activity.

California‑Specific Concerns and Pragmatics

• Several argue California’s real problem is spending and governance inefficiency, not lack of revenue, and warn that overreliance on a tiny wealthy cohort makes budgets fragile.
• Others point to Massachusetts’ millionaire surtax as a counterexample: more revenue for schools and infrastructure, no visible millionaire exodus, and continued high quality of life.
• Some emphasize that even if a few billionaires leave, reduced asset‑pressure (especially on housing) could benefit the broader population, though this is contested as potentially shifting the tax load downward instead.