> The Seattle City Council on Monday unanimously approved a plan to levy a 2.25 percent tax on the income of residents earning $250,000 or more annually. The Council estimates that the tax would bring in an additional $140 million each year.
In other words, they're offering a $140 million incentive for the high-earning residents of Seattle to move out. This is a good way to get "brain drain".
CA has an income tax that's 8% or higher above $40k. If this caused some kind of brain drain, I'd expect to see smart/wealthy people leaving the state. The last 30 years have been the opposite, with the Bay Area and SV growing in size and importance year over year. Further, when discussion of people leaving the state comes up, I hear constantly about cost of living and housing, never about taxes.
Every state's tax code is a story of winners and losers; a historical record often heavily influenced by special interests and circumstances unique to that state. California's tax code has been designed by wealthy real estate developers who pay relatively little in income tax due to depreciation. Proposition 13 has been an incredible transfer of wealth from wage earners to the real estate industry. This is rentier capitalism and does little to promote Silicon Valley's brand of innovation, unless you view high housing costs as a useful mechanism to filter potential migrants. If California had opted for higher property taxes and lower income taxes, then I suspect it would be even more vibrant and dynamic than the admittedly successful State we see today. Other states, notably Texas, have taken such an approach: very high property taxes and no income taxes.
Bad argument IMO. You don't know how much more of a tech center CA would be without their high income tax. We only have 1 data point, and we need 2. I know I personally avoid California because of the high taxes, and I doubt I'm alone.
But Seattle is not the Bay Area. Professionally, it simply doesn't have as many opportunities as the Bay Area. The weather is much worse, it has a similar homeless problem to SF, less culture (somewhat subjective), worse schools compared to South Bay, etc.
I think the no income taxes has been a huge draw for stingy engineers who want to save $20k+/yr.
If the income tax, however tiny, actually goes through, people will see this as the beginning of many income tax increases and will be less likely to settle down in the area.
I don't mind paying my taxes. Why? because I like parks and roads and schools and safety nets. Is there some waste? yes. But if you don't want to pay any taxes, move to Somalia, I'm sure it will be paradise.
> In fact, in some parts of the Bay Area — including Santa Clara, San Mateo and Marin counties — already more people are leaving than arriving, according to the estimates released Thursday, which cover the period from July 1, 2015, to June 30, 2016. The same would be true in San Francisco if it weren’t for the high number moving in from abroad.
Have land values decreased? And I don't mean commercial lease rates, I'm talking actual residential real estate. If not, people still want to live there.
If not submitting to having my income expropriated at the barrel of a politician's gun means I lack empathy then you are using a very strange definition for the word "empathy".
You are supported by the social systems that surround you. They aren't conjured out of thin air. But if you don't want to support them in turn, then you are hardly being forced to. Just move somewhere else. There are a lot of cities in this country.
As I mentioned in other posts, the city government is having half a billion extra cash every year for the past 5 years. The city has a lot of money to support and expand its infrastructure. 8% increase YoY in tax revenue sounds like they are not running into money problems.
There are no "calls" for them to pay their fair share because for the most part they already are, in many cases well more than they can afford. Your comment also implicitly presumes that the wealthy were already paying their fair share, and this is some extra burden arbitrarily heaped upon them by an unkind majority.
How much, exactly, is "society's" fair share of someone else's money?
This is the problem. There is this assumption that taxes are used to care for the destitute. Absolutely, some amount of taxes do go to that end.
However, I've worked enough government contracts to know that the vast majority of that money goes to providing middle-class incomes for people in government who otherwise would not be making that sort of money because of a distinct lack of intelligence, competence, or diligence.
a) In real life try explaining to your SO/kids that they must abandon their existing life because you want to save 2.25%.
b) Assuming there was some flight out of the city good news! We can solve this by increasing state and federal income taxes. We can even tax capital gains and dividends at income tax rates. There is more than enough money to pay for the things we need to pay for.
(It is probably wise fiscal policy to exclude the first 1 million in investment income from capital gains as a way of encouraging small investors and those just starting out. If I were King I'd exclude the first 1 million in wages too, with a graduated phase-in and make it up by taxing people with $1 billion or more in assets+income combined).
This will just push more across Lake Washington. Will Amazon start a competitor to the Microsoft Connector (bus service)? Or will they shift some operations over here? Why not both?
Just when I had started to hope Eastside property values were reaching a peak and nearing a correction... My intuition says Issaquah will be the next big hub once Kirkland and Redmond saturate some more, but even the median home price there is $700k already.
$140 million is roughly the cost overruns for the Bertha project. Sometimes you're not getting goods and services, but rather someone's costly mistake.
In other words, they're offering a $140 million incentive for the high-earning residents of Seattle to move out. This is a good way to get "brain drain".