Recently, Californians proposed to enact a supposedly one time 5% wealth tax on billionaires. Essentially for every billion of established wealth, $50 million would be siphoned off to the state. For someone whose wealth has been established at $100 billion, a $5 billion tax hit. Not surprisingly, this is driving billionaires out of the state to seek more financially friendly states and even countries.* (By the way, nobody believes this is a one time tax. Once done the model for doing it again will have been established.)
Well, Virginia has its own version of a wealth tax, namely a proposal to raise the top state income tax level to 10% for anyone making over $1Million. The current top rate is 5.75%. Some simple math means that Virginia, every year, would take about $42,500 out of every $1m earned in income over the first million.
What are the implications to a high income earner? A general rule of thumb is that 50% of income goes to needs and essentials, 30% goes to wants or discretionary, and 20% goes to savings and debt. The only categories that vary are discretionary and savings. (I question whether savings is really discretionary as many people have IRAs and other tax sheltered investments. We are thus left with discretionary as where the individual high income individual can find the money to pay the $42,500 or more in taxes.)
Since high income people don’t generally have $42,500 (or some multiple thereof) just lying around, something has to give. Maybe a shorter vacation, or cuts in children education, or a deferred a kitchen remodel, or abandoning the purchase of a new boat. Essentially this $42,500 plus doesn’t go to employment in “luxury” associated industries but to Virginia socialist welfare increases which disappear into the State coffers and are never really accounted for – I note the DOGE investigations an example of discovered waste, fraud and abuse. Also, let’s not forget the recent unbelievable level of Minnesota Somali fraud.
Those who read this probably think I am complaining because I make millions in income. I wish it did but nope, I can’t make that claim. What I do claim Is that money in the hands of the private sector is much more easily accounted for and much better spent for advancing society.
(Thanks to ever growing inflation, a million isn’t what a million used to be. The current and growing prices of silver and gold seem to reflect this issue.)
*Note: The California situation is particularly dire. No billionaire is just sitting on a huge pill of cash. A wealth tax would like force some businesses into bankruptcy or create a situation where a massive business fire sale would actually result in much more of a hit than the tax itself. The road to hell isn’t even paved with good intentions. In California, it is paved by runaway socialist government. Is Virginia headed down the same path?
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As the situation unfolds, the new tax money won’t go to American citizens but to illegal aliens. They are the new democommiecrat voting block.
WHEN MILLIONAIRES HAVE INCOME CUTS THEY CUT DOWN ON THE PERSONNEL THEY HIRE SUCH AS HOUSEKEEPERS AND GARDENERS THEREFORE MAKING PEOPLE WITH LESS INCOME LOSE THEIR JOBS
Democrats passed a luxury tax on boats and other luxuries. This tax destroyed the American boat building industry. Democrats never learn. They repeat their mistakes thinking that making a mistake over and over again will suddenly eliminate the impact of the mistake. Their perspective is really at the tip of their nose but they will blame republicans when their policies fail.
Democrats passed a luxury tax on boats and other luxuries. This tax destroyed the American boat building industry. Democrats never learn. They repeat their mistakes thinking that making a mistake over and over again will suddenly eliminate the impact of the mistake. Their perspective is really at the tip of their nose but they will blame republicans when their policies fail.
That wasn’t a “bug” it was a feature. The democrat traitors do not want ANYONE to own anything that could be considered a “luxury item” because that would be flaunting wealth in the face of the ne’er do wells. Boats, private airplanes, etc are verboten in the democrat traitor plans for the new world order.
If you are raking in $1 million a year and can’t write a check for $42,500, then you need to fire your accountant.
We are in our 80’s. We both started working in junior high school – I sacked groceries and stocked shelves, she washed hair in a beauty salon. Today pensions are providing use around $120,000 annually.
Last week, I stroked off a check for $48,000-plus for a new car and don’t even miss it.
Of course, during our 50-plus years of working, we bought used cars and drove then for ten more years; never owned a McMansion; did not fly to London annually to visit our tailors; never owned an airplane or boat; did our own yard work and household repairs; and even now we buy or eyeglasses from the cheapest discount outlet we can find.
Good for you. You and wife worked hard and saved a bunch of money – maybe millions. However, this Virginia proposal, now adjusted down to 8% on $600k in income and then 10% over a million is an income tax not a wealth tax to be paid every year in perpetuity. Losing $42000 in income every year is significant and will force changes in how salaries are paid. It is just another tax the rich scheme by democrats and it isn’t free of negative consequences for individuals and businesses – and you know that.
I wonder if you have kids and grandkids. What do they think about the state taking money out of their pockets to pay for illegal aliens. And for your information, inflation will eventually drive more and more Americans into the higher brackets which won’t be adjusted. Biden’s magic wand took a million and turned it into $750k of buying power.
Government isn’t a replacement for a thriving private sector. Virginia just went from business friendly to business unfriendly.
You could just move to a Republican paradise: You know — Mississippi, Alabama, Texas, Florida, Arkansas
Many people and businesses are. Californicating Virginia is a stupid idea.
California of the East……. Welcome to Virginia…..
spanberger is the Mamdani of the South. You ain’t seen nothing yet when it comes to democommiecrats.
We have THIRTY BILLION dollars in surplus. Undoubtedly the democrat traitors have already earmarked all of that for their bullschiff spending. These people are STUPID!!! There are already reports that the companies Glenn lured to the state are not coming and those already here are moving out. One company moved here LAST year and are packing up to leave. Buckle up folks it’s going to get worse.
Perhaps you could provide a reliable source for your bullshit claim.
The only company I can find is Bucee’s, who has delayed their quick-stop with gross food in New Kent County for 2-3 years.
There’s this thing called research on that device called the internet. Not going to do your work for you,
Va. has plenty of money for everything needed.
Why punish those that are successful?
The state needs to be more prudent in their expenditures and budget accordingly.
Does the legislature think more funding is needed for sanctuary jurisdictions?
Prudent democrat is an oxymoron
Yes
Trump took a backup plane.
Tell us you know nothing about airplanes without saying so out loud. You are suffering from end stage TDS.
Guess who won WW2.
The number of exemptions were enormous.
100% of the people never paid a percent even close to those that figure.
Please don’t move with us. Stay put as the mess you created unfolds. The sad part is democrats are like locusts. They strip the land and the move on. As Thatcher once said “The problem with socialism is you eventually run out of other people’s money”. After you have destroyed Virginia, what is next?
If you get your way, the average American will never own a home and be living in a one bedroom apartment. That is the Mamdani way.
Well who would have thought that Virginians, the people of America’s founding, would vote for freedom hating islamocommiecrats.. That is the real stunner.
Oh, Trump knows his speech is meaningless. The action is behind closed doors. Of note, today’s battleship is hundreds of times more powerful than what was available in WW2. The day of the big gun is over.
Exactly. You have to cut somewhere when the money isn’t there.
Aircraft have one and only one purpose, fixed- or rotary-wing — and that purpose is to drop the infantry close enough so we don’t have to walk too far to fix bayonets.
LOL. When I was in training to be a first officer on Learjets in 1988 I flew once with a “Captain”, former Naval Aviator, who told me that more than one seat in the jet was a waste of space. He was serious too.