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CA Democrats want to tax “money managers” at 30% rate

Is this intentional to get rid of the venture capital money persius12/22/18
Wrong forum - but maybe unconstitutional targeting of “mon persius12/22/18
Unless they're targeting Bob Lincolnshire, money manager, I therewillbeblood12/22/18
It is potentially a bill of attainder depending on the bill persius12/22/18
It’s not a bill of attainder if it targets a profession dingbat12/22/18
They ain’t leaving dingbat12/22/18
Maybe, maybe not a bill of attainer or some other illegality persius12/22/18
I think you're wrong. 1) people actually want to live in dingbat12/22/18
I know people that already set up their taxable residence in persius12/23/18
except that if you earn the money in California, you owe inc dingbat12/24/18
Yeah I think this can be flashed out better in the dome triplesix12/22/18
So you're pro-globalist banker? therewillbeblood12/22/18
They dindu nuffin triplesix12/22/18
I dont see what benefit VC's provide to society anymore. superttthero12/22/18
Persius is just angry over this because Democrats are sugges therewillbeblood12/22/18
it's part of the financing mechanism 1) start with saving dingbat12/23/18
I understand how it works. I just dont currently see a po superttthero12/23/18
whether or not the human race is better off due to technolog dingbat12/24/18
We should provide more tax incentives for parasite industrie triplesix12/25/18
Persius, you have nothing to worry about, you'll never make newyorkcity12/23/18
Brilliant argument. You are right up there with therewillbe persius12/23/18
Found a link for the proposal. What makes you think that emp triplesix12/23/18
Yeah, I don't see it for the general employee lawyer. As I wutwutwut12/23/18
At most, only his stock comp would be captured. I read it as triplesix12/24/18
OP can you link the actual proposal from an official governm triplesix12/23/18
"a mouth breathing imbacile " Haha wutwutwut12/23/18
Indeed loolz. triplesix12/24/18
This law is intended to fix the absurd federal “carried in alphadog1512/24/18
So you disagree with the study this “mouth breathing imbec persius12/24/18
You are right, it won't pass because socialist democrats who triplesix12/24/18
True. The only revenue gain or loss they are probably conce persius12/24/18

persius (Dec 22, 2018 - 12:51 pm)

Is this intentional to get rid of the venture capital money or do they think they won’t leave along with most everything else that is only there because of the vc money?

Seems like a can’t miss way to make Silicon Valley real estate affordable again.


CA Democrats want to tax “money managers” at 30% rate

http://www.flashreport.org/blog/2018/12/17/ca-democrats-want-to-tax-money-managers-at-30-rate/

In California, the Democrats’ Jihad against the rich is gaining momentum. In 2019 they will try (again) to pass a bill to in essence ban “venture capitalists, hedge funds and private equity firms” from the Golden State

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persius (Dec 22, 2018 - 12:58 pm)

Wrong forum - but maybe unconstitutional targeting of “money managers”.

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therewillbeblood (Dec 22, 2018 - 2:17 pm)

Unless they're targeting Bob Lincolnshire, money manager, I don't see the unconstitutionality.

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persius (Dec 22, 2018 - 2:28 pm)

It is potentially a bill of attainder depending on the bill as groups can also be unconstitutionally targeted. Based on your comment below it sounds like the intention is to rid the world of bankers by taxing them out of business.

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dingbat (Dec 22, 2018 - 8:12 pm)

It’s not a bill of attainder if it targets a profession

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dingbat (Dec 22, 2018 - 8:12 pm)

They ain’t leaving

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persius (Dec 22, 2018 - 8:43 pm)

Maybe, maybe not a bill of attainer or some other illegality. I doubt they pin their hopes to a legal challenge though. I think they leave and take all of the tech/startups with them or set up their taxable residence somewhere else. I just made that comment because I realized I accidentally posted in law.

For what possible reason would they stay in a place with an effective tax rate of 70 percent when that money can go anywhere? Many have already left. The only reason the tech companies, brain trust, and startups are in the Bay Area is the vc money is there. At a minimum they will establish their taxable private residence somewhere else. They are biting the hand that feeds them.

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dingbat (Dec 22, 2018 - 10:24 pm)

I think you're wrong.

1) people actually want to live in the Bay Area - it's a nice place to live (if you have money)
2) tech companies are there because there is a very well-developed eco system there. Lots of tech geeks, lots of VC, lots of startup experience, lots of other tech companies. Even if you had all the money in the world, it'd be much much harder to establish a tech company is the Dakotas, because nobody is there, nobody wants to go there, and nobody will take you seriously if you are there.
3) you can't just "establish a taxable private residence somewhere else". If you earn your money in California, you owe California income tax.
4) people in Europe are able to move freely from country to country. There hasn't been a mass exodus of people from high-tax countries to low tax countries. And their tax rates can be quite high. Likewise, there are a lot more people living in high-tax California, Massachussets, New York, etc., than there are in low-tax tennessee or alaska.

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persius (Dec 23, 2018 - 5:18 am)

I know people that already set up their taxable residence in Nevada and commute to California when necessary. It’s really not that difficult to buy a house somewhere else if you are a high earning vc and it makes difference in 30 percent of your income.

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dingbat (Dec 24, 2018 - 10:29 pm)

except that if you earn the money in California, you owe income tax in California - regardless of what state you live in

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triplesix (Dec 22, 2018 - 1:20 pm)

Yeah I think this can be flashed out better in the dome

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therewillbeblood (Dec 22, 2018 - 2:17 pm)

So you're pro-globalist banker?

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triplesix (Dec 22, 2018 - 3:55 pm)

They dindu nuffin

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superttthero (Dec 22, 2018 - 9:11 pm)

I dont see what benefit VC's provide to society anymore.

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therewillbeblood (Dec 22, 2018 - 10:24 pm)

Persius is just angry over this because Democrats are suggesting it. If it came from Trump, he'd be all for it.

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dingbat (Dec 23, 2018 - 12:07 am)

it's part of the financing mechanism

1) start with savings or raise money from friends & family (which is often a violation of securities laws)
2) build a prototype or flesh it out enough to raise money from an angel investor (typically $50k to $500k)
3) go into production / launch your service, start getting some sales; go to VC to raise additional capital ($500k to $2m)
4) You're not quite self-sufficient, but you should be. Raise a second round, maybe a third round, from VC and/or private investment funds
5) You're proven profitable, but want to invest in some new ideas. Stop wasting equity and start qualifying for bank loans
6) time (for your investors) to cash out. IPO on the stock market. (private yacht money)

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superttthero (Dec 23, 2018 - 7:55 pm)

I understand how it works.

I just dont currently see a positive for society.

Generally drugs are driven by profit but most from established BIGPHARMA and/or BIG-NIH funding. Sure, there are exception but mostly rare (lol theranos). (Note, ide like to see this change, but thats another topic)

Things that improve in QOL certainly arent promoted either in the employees, other than direct financial gain if they are given points.... or in the clients. All bull aspiration Mission Statements aside, most would all you cyanide dessert topping if they could get away and get that sweet VC money.

As far as what we're getting today (social media and more 'internet' based tech) is either directly making us more depressed or if it could improve things, it is bogarted and rationed by moneyed interests.

The world is moving too fast, people that are in the developed world are less and less happy, and I dont see the value in fast money for innovators from those that are so viciously focused on the bottom line.

If all the tech and improvements and business growth we had from the 70s to today had taken 100x time longer, that would have been fine by me.

The small benefit that I could see is that it gives us a slight advantage economically in the world marketplace, but that's quickly disappearing and not much we can do about it as AI looms anyway.

So, I didnt ask where VC money fits in a startups funding. I posited what benefit it gives society? Slightly faster developing tech?

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dingbat (Dec 24, 2018 - 10:35 pm)

whether or not the human race is better off due to technological developments is open to debate. Insofar as technological developments do benefit the human race, VC plays a part in it.

“I’m not sure he’s wrong about automobiles,” he said. “With all their speed forward they may be a step backward in civilization—that is, in spiritual civilization. It may be that they will not add to the beauty of the world, nor to the life of men’s souls. I am not sure. But automobiles have come, and they bring a greater change in our life than most of us expect. They are here, and almost all outward things are going to be different because of what they bring. They are going to alter war, and they are going to alter peace. I think men’s minds are going to be changed in subtle ways because of automobiles; Just how, though, I could hardly guess. But you can’t have the immense outward changes that they will cause without some inward ones, and it may be that George is right, and that the spiritual alteration will be bad for us. Perhaps, ten or twenty years from now, if we can see the inward change in men by that time, I shouldn’t be able to defend the gasoline engine, but would have to agree with him that automobiles ‘had no business to be invented.’”

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triplesix (Dec 25, 2018 - 12:21 am)

We should provide more tax incentives for parasite industries bc kewl quotes!!!

U go gurl

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newyorkcity (Dec 23, 2018 - 12:29 am)

Persius, you have nothing to worry about, you'll never make enough money to be affected by a tax on the well off, as indicated by your inability to understand an L1 issue like Bills of Attainder.

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persius (Dec 23, 2018 - 5:32 am)

Brilliant argument. You are right up there with therewillbeblood. Definitely an embarrassing enough post for you to switch to a sock account.

I do know if they passed a tax on only bad posters like you because they are “evil” it is not going to potentially impact my job because you are obviously not going to create any jobs or give me financing.

I know some poor law grads that work in vc. 13% personal state income tax plus another 17% evil tax on them also. These are the ones that would be hit by the tax because they can’t simply buy a house in Nevada if their firm stays in California. It is a personal income tax not a business tax and state income tax is no longer deductible from federal income tax.

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triplesix (Dec 23, 2018 - 3:41 pm)

Found a link for the proposal. What makes you think that employee "poor lawl" grad working for vc company woukd be subject to this tax?

Also don't link trash sources, if you are trying to have a serious discussion on the issue. Link the government proposal. I ain't giving clicks to some idiot writing half baked analysis.

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wutwutwut (Dec 23, 2018 - 11:26 pm)

Yeah, I don't see it for the general employee lawyer. As I read it, the person would have to be a shareholder of the business and also provide investment advice or arrange financing for the investments. I guess a question could be if a mid-level finance guy who holds a small position in the company (e.g. via stock grants) could be captured here.

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triplesix (Dec 24, 2018 - 2:29 pm)

At most, only his stock comp would be captured. I read it as a tax on GPs/decision makers, not 'lil hard working lawlyers'

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triplesix (Dec 23, 2018 - 3:34 pm)

OP can you link the actual proposal from an official government source. The link you provided is written by a mouth breathing imbacile who doesn't understand tax concepts.

Working up this outrage based on a blog post seems a bit premature. Let's see what the actual deal is before you start dry heaving and working up a panic attack.

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wutwutwut (Dec 23, 2018 - 11:10 pm)

"a mouth breathing imbacile "


Haha

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triplesix (Dec 24, 2018 - 2:27 pm)

Indeed loolz.

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alphadog15 (Dec 24, 2018 - 6:55 am)

This law is intended to fix the absurd federal “carried interest loophole” which allows these money managers to get away with paying a ridiculously low tax rate at the federal level, and I only wish other states like NY would implement a similar law. If you’re for the carried interest loophole then you’re either a money manager or don’t understand the taxation of income in this country. I’m betting it’s the latter considering some of your posts show a woeful lack of knowledge as to the basics of a state’s taxing jurisdiction (FYI someone living in Nevada and commuting to CA is fully taxable in CA).

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persius (Dec 24, 2018 - 10:26 am)

So you disagree with the study this “mouth breathing imbecile” is referring to that says the state will lose $2 billion in tax revenues through businesses leaving and individuals changing tax domiciles? Avoiding California state income taxes in Nevada is certainly doable if done right in a business like this and is commonly done. This is not changing a country of citizenship in Europe and the money earned can be earned be earned from in Nevada.

The businesses will likely just move because these business are going to go where the money is. It has been proposed for a while and hasn’t been able to pass yet so likely even the most radical politicians recognize the risks. The “mouth breather” in the article predicts it won’t pass again this year even with a California Democratic supermajority but if they do we will see if it moves a lot of industry out of the state. It sounds like you also want to stifle funding for innovation by removing the tax benefits which is what would happen if done at the federal level. At least supertt is honest about wanting to do that.

Whether it applies to low level people working in venture capital would probably depend at how they are set up and how the statute is interpreted. The interest in the business is referring to the business they are investing in and the statute is taxing income derived from this activity. I am sure even lowest level vc people are mostly compensated with stock in the ventures.

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triplesix (Dec 24, 2018 - 2:30 pm)

You are right, it won't pass because socialist democrats who hate hard work and America are in the same pockets as good hard working Republicans who love america more than capitalism itself.

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persius (Dec 24, 2018 - 2:48 pm)

True. The only revenue gain or loss they are probably concerned about is the revenue loss to their campaigns. That is probably why they are saying the money will go exclusively to teachers.

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