News

Man wants to make wealth tax a reality in Palo Alto

Citizen initiative would charge residents with more than $50 million in net worth

A proposed wealth tax in Palo Alto would create a 2% wealth tax on net worth above $50 million and a 3% wealth tax on net worth above $1 billion. Weekly file photo.

Kevin Creaven came to Palo Alto last month with one ambitious goal: restrict sales of gasoline-fueled cars. Before long, he picked up another: tax the richest of the rich.

Creaven, who works as a chemical engineer for San Diego County, hopes local residents will help him achieve both in November when they go into the voting booth. He has just begun to collect signatures to place a wealth tax on the general election ballot, as well as for a separate measure that would ban sales of gasoline-fueled cars that cost more than $50,000.

Creaven, 29, makes no secret of why he chose Palo Alto as the place to launch the two efforts. It's a relatively small city, which means he would need to collect far fewer signatures than he would in San Diego. He had begun to pursue the efforts in San Diego when the coronavirus pandemic hit, making it infeasible for him to secure the funding he would've needed for the petition process, he said.

So he pivoted to Palo Alto, which famously has a concentration of well-known billionaires, a list that includes Facebook CEO Mark Zuckerberg, Google co-founder Larry Page and Laurene Powell Jobs, wife of late Apple CEO Steve Jobs and president of social investment firm Emerson Collective.

Creaven sees Palo Alto as a possible launchpad for a wealth tax, an idea that he hopes will start in the city and eventually expand to other parts of the country. Creaven, who supported U.S. Sen. Elizabeth Warren's bid to be the Democratic presidential nominee, borrows heavily from her wealth tax proposal, which called for a 2% tax on every dollar of net worth above $50 million and a 6% rate on every dollar of net worth above $1 billion.

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Creaven's proposal, by contrast, would create a 2% wealth tax on net worth above $50 million and a 3% wealth tax on net worth above $1 billion. Palo Alto households would each receive $2,500 from the tax proceeds. The balance would go to the state of California for general government functions.

In addition, the measure would impose a 40% "exit tax" on any resident with a fortune of more than $50 million and who is relocating either abroad or to a place within the United States that doesn't have an equivalent wealth tax.

Creaven said he was spurred to action by the recent growth in wealth inequality in the country. While he sees a certain amount wealth inequality as a natural and acceptable byproduct of capitalism, he believes it has gone "unchecked" and is spiraling out of control.

"When you have runaway wealth inequality, you start to see societies start to collapse. It's a pretty dangerous thing," Creaven told this news organization.

The initiative states the extreme wealth inequality has historically functioned as "a catalyst for severe unrest, and social and political instability."

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"The State of California, and particularly the City of Palo Alto, are experiencing an unprecedented degree of wealth inequality that is making both the State and City vulnerable to severe instabilities," the initiative states. "An efficient way to swiftly taper extreme wealth inequality in Palo Alto, would be to levy the taxes referenced in this Initiative, and to give every resident a one-time stimulus check."

Creaven said his team is just starting the effort to collect the 2,392 signatures that would be needed for each of the two initiatives, with plans to set up tables in prominent commercial areas. But even if he gathers them, the proposal could be a tough sell. As a "special tax," it would need approval from a two-thirds majority of voters (Creaven said if it fails, it could return as a "general tax," which would require a simple majority).

While Palo Alto voters have supported increases to the city's hotel tax rate in recent years, they also rejected the city's effort in 2009 to pass a business tax. The city was preparing to bring back the business tax measure this year, but opted to scrap the effort in March because of the economic shutdown.

Even if the measure meets the high threshold for passage, it will likely meet legal challenges, much like the wealth tax that Seattle voters approved in 2017. That tax imposed a 2.25% rate on individuals with incomes above $250,000 and on married couples with incomes more than $500,000. The Washington state Court of Appeals had found the tax to be unconstitutional. The appeals court also concluded that an existing law that bans cities from adopting income taxes is illegal, leaving the ultimate decision on the 2017 measure for the state Supreme Court.

Creaven noted that Warren's wealth tax proposal was surprisingly popular. Even if the Palo Alto initiative fails, he believes the idea's time has come.

"A wealth tax is eventually coming, whether through this initiative or one written through a different (process). It will get here," Creaven said.

Creaven also hopes to pick up some momentum on the Clean Vehicle Initiative, an effort that would ban the sale or leasing of gasoline vehicles that cost more than $50,000 pre-tax, beginning Jan. 1, 2021. It would also add a 2.5% sales tax on gasoline cars that are valued at more than $50,000 and bought outside of Palo Alto but registered in the city. Revenues from that tax would go to the city's general fund.

The bill would exempt commercial vehicles, RVs and vehicles manufactured before 2021.

Creaven said he was spurred to action after seeing other nations, including France and the United Kingdom, create plans for banning cars with internal combustion engines before 2040. The failure of the United States to set a similar goal was a disappointment, he said. He said he believes the initiative is politically feasible because "the majority of people aren't buying gas cars that are over $50,000."

The initiative argues that there will "never be a convenient time to fight climate change, but that's no excuse to ignore it."

"We need to fully embrace carbon neutral technologies as we create them, not decades after their inception," the initiative states. "This initiative is an opportunity for Palo Alto to enact the first (partial) ban on gasoline cars in the country. Palo Alto is a small city, but meaningful ideas often start small on the west coast before spreading throughout the rest of the country."

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Man wants to make wealth tax a reality in Palo Alto

Citizen initiative would charge residents with more than $50 million in net worth

by / Palo Alto Weekly

Uploaded: Tue, Jun 9, 2020, 9:31 am

Kevin Creaven came to Palo Alto last month with one ambitious goal: restrict sales of gasoline-fueled cars. Before long, he picked up another: tax the richest of the rich.

Creaven, who works as a chemical engineer for San Diego County, hopes local residents will help him achieve both in November when they go into the voting booth. He has just begun to collect signatures to place a wealth tax on the general election ballot, as well as for a separate measure that would ban sales of gasoline-fueled cars that cost more than $50,000.

Creaven, 29, makes no secret of why he chose Palo Alto as the place to launch the two efforts. It's a relatively small city, which means he would need to collect far fewer signatures than he would in San Diego. He had begun to pursue the efforts in San Diego when the coronavirus pandemic hit, making it infeasible for him to secure the funding he would've needed for the petition process, he said.

So he pivoted to Palo Alto, which famously has a concentration of well-known billionaires, a list that includes Facebook CEO Mark Zuckerberg, Google co-founder Larry Page and Laurene Powell Jobs, wife of late Apple CEO Steve Jobs and president of social investment firm Emerson Collective.

Creaven sees Palo Alto as a possible launchpad for a wealth tax, an idea that he hopes will start in the city and eventually expand to other parts of the country. Creaven, who supported U.S. Sen. Elizabeth Warren's bid to be the Democratic presidential nominee, borrows heavily from her wealth tax proposal, which called for a 2% tax on every dollar of net worth above $50 million and a 6% rate on every dollar of net worth above $1 billion.

Creaven's proposal, by contrast, would create a 2% wealth tax on net worth above $50 million and a 3% wealth tax on net worth above $1 billion. Palo Alto households would each receive $2,500 from the tax proceeds. The balance would go to the state of California for general government functions.

In addition, the measure would impose a 40% "exit tax" on any resident with a fortune of more than $50 million and who is relocating either abroad or to a place within the United States that doesn't have an equivalent wealth tax.

Creaven said he was spurred to action by the recent growth in wealth inequality in the country. While he sees a certain amount wealth inequality as a natural and acceptable byproduct of capitalism, he believes it has gone "unchecked" and is spiraling out of control.

"When you have runaway wealth inequality, you start to see societies start to collapse. It's a pretty dangerous thing," Creaven told this news organization.

The initiative states the extreme wealth inequality has historically functioned as "a catalyst for severe unrest, and social and political instability."

"The State of California, and particularly the City of Palo Alto, are experiencing an unprecedented degree of wealth inequality that is making both the State and City vulnerable to severe instabilities," the initiative states. "An efficient way to swiftly taper extreme wealth inequality in Palo Alto, would be to levy the taxes referenced in this Initiative, and to give every resident a one-time stimulus check."

Creaven said his team is just starting the effort to collect the 2,392 signatures that would be needed for each of the two initiatives, with plans to set up tables in prominent commercial areas. But even if he gathers them, the proposal could be a tough sell. As a "special tax," it would need approval from a two-thirds majority of voters (Creaven said if it fails, it could return as a "general tax," which would require a simple majority).

While Palo Alto voters have supported increases to the city's hotel tax rate in recent years, they also rejected the city's effort in 2009 to pass a business tax. The city was preparing to bring back the business tax measure this year, but opted to scrap the effort in March because of the economic shutdown.

Even if the measure meets the high threshold for passage, it will likely meet legal challenges, much like the wealth tax that Seattle voters approved in 2017. That tax imposed a 2.25% rate on individuals with incomes above $250,000 and on married couples with incomes more than $500,000. The Washington state Court of Appeals had found the tax to be unconstitutional. The appeals court also concluded that an existing law that bans cities from adopting income taxes is illegal, leaving the ultimate decision on the 2017 measure for the state Supreme Court.

Creaven noted that Warren's wealth tax proposal was surprisingly popular. Even if the Palo Alto initiative fails, he believes the idea's time has come.

"A wealth tax is eventually coming, whether through this initiative or one written through a different (process). It will get here," Creaven said.

Creaven also hopes to pick up some momentum on the Clean Vehicle Initiative, an effort that would ban the sale or leasing of gasoline vehicles that cost more than $50,000 pre-tax, beginning Jan. 1, 2021. It would also add a 2.5% sales tax on gasoline cars that are valued at more than $50,000 and bought outside of Palo Alto but registered in the city. Revenues from that tax would go to the city's general fund.

The bill would exempt commercial vehicles, RVs and vehicles manufactured before 2021.

Creaven said he was spurred to action after seeing other nations, including France and the United Kingdom, create plans for banning cars with internal combustion engines before 2040. The failure of the United States to set a similar goal was a disappointment, he said. He said he believes the initiative is politically feasible because "the majority of people aren't buying gas cars that are over $50,000."

The initiative argues that there will "never be a convenient time to fight climate change, but that's no excuse to ignore it."

"We need to fully embrace carbon neutral technologies as we create them, not decades after their inception," the initiative states. "This initiative is an opportunity for Palo Alto to enact the first (partial) ban on gasoline cars in the country. Palo Alto is a small city, but meaningful ideas often start small on the west coast before spreading throughout the rest of the country."

Comments

Fairmeadow
Midtown
on Jun 9, 2020 at 10:34 am
Fairmeadow, Midtown
on Jun 9, 2020 at 10:34 am
47 people like this

The conversation starts at $50 million but will eventually come down to people with $50K.

Don’t fall for starting the false conversation...


Anon
Another Palo Alto neighborhood
on Jun 9, 2020 at 10:42 am
Anon, Another Palo Alto neighborhood
on Jun 9, 2020 at 10:42 am
25 people like this

Posted by Fairmeadow, a resident of Midtown

>> The conversation starts at $50 million but will eventually come down to people with $50K.

>> Don’t fall for starting the false conversation...

Don't fall for the misdirection. Wealth and income inequality in the US are at "Gilded Age" levels now. We can do something about it.


Me 2
Old Palo Alto
on Jun 9, 2020 at 10:56 am
Me 2, Old Palo Alto
on Jun 9, 2020 at 10:56 am
70 people like this

Carpetbagger.

Go back to San Diego and reform your own community first.


Martinimaas
Old Palo Alto
on Jun 9, 2020 at 11:12 am
Martinimaas, Old Palo Alto
on Jun 9, 2020 at 11:12 am
65 people like this

How about a measure that prohibits people from outside our city from crafting measures on behalf of our city. Seems pretty reasonable to me. I'd be happy to start that.

Separately, before we jump to prohibitions, it makes a whole lot of sense to understand the powering of vehicles. Like it or not, gasoline is by far and away the most efficient source of power for vehicles. Electric is fantastic, but requires huge battery arrays for things like start and stop, but not so much for maintaining speed. People feel good about electric, but not all sources of electric are "green" and it's easy for people to not bear guilt for where their power comes from so long as they do not have to go to the gas station.

For all the people who buy electric cars in this town, few of them seem to prioritize "making" their own energy with solar panels on their roofs.

The most promising vehicle technology at this time appears to be supercharged/turbocharged hybrids, although the term "hybrid" has fallen largely out of favor anymore. De Anza college nearby has a fantastic Auto Tech program for those who wish to learn more before proposing a ban on something.

Perhaps most importantly, with regard to the "end game" of going green, solar panels use scarce resources and there is not currently a robust market for reconditioning and reuse of battery cell components, so once they are nominally effective, they create trash and haz mat. Most internal combustion engine parts are reconditioned and reused. Let's think about the day when everyone needs to replace their electric car battery and what that looks like.

Overall, I don't think it's anywhere even close to possible, with the scarcity of resources required for electric cars and solar panels, for everyone who currently has an IC engine vehicle to swap out to electric. So, if that's not even possible, why start with bans?

Creaven, please take some time to learn more about the issues you seek to police. If you continue to pursue proposing policy, may I suggest reprioritizing to work on the building code for HVAC systems in new construction or sizeable remodels. HVAC systems contribute to huge energy consumption disparities and there are effective technologies (room-by-room mini split systems) that can address that. Thanks and enjoy your return to San Diego!


John
Community Center
on Jun 9, 2020 at 11:13 am
John, Community Center
on Jun 9, 2020 at 11:13 am
28 people like this

It is my hope that Palo Alto will aspire to this lightly edited version of a common yard sign: “No matter where you are from, or how rich you are, we’re glad you’re our neighbor.” Then politely decline to sign Mr. Creaven's wealth tax petition, and so demonstrate inclusivity to the very people who have engineered so much of our region’s prosperity.


Name hidden
Another Palo Alto neighborhood

on Jun 9, 2020 at 11:16 am
Name hidden, Another Palo Alto neighborhood

on Jun 9, 2020 at 11:16 am

Due to repeated violations of our Terms of Use, comments from this poster are automatically removed. Why?


Basic Facts
Crescent Park
on Jun 9, 2020 at 11:20 am
Basic Facts, Crescent Park
on Jun 9, 2020 at 11:20 am
33 people like this

How is it possible that Mr. Creaven is not aware that it is illegal for a state, county, city or any other entity other than the federal government to try to extract an "exit" tax? It would be a restriction on free movement within the country. Some states have an additional tax for non-residents when they sell a property, but that's not an exit tax.


Resident
Professorville
on Jun 9, 2020 at 11:22 am
Resident, Professorville
on Jun 9, 2020 at 11:22 am
5 people like this

How interesting that almost all responses are of the "you are not from here, go away we don't care what your idea is" flavor (and one being "this wealth tax will eventually become a poor tax, too" without any reasoning).

Not much critical analysis or counter-arguments at all, not very impressive


What Will They Do Next
Old Palo Alto
on Jun 9, 2020 at 11:26 am
What Will They Do Next, Old Palo Alto
on Jun 9, 2020 at 11:26 am
26 people like this

Go back to San Diego. I'm sure they'll appreciate your efforts.....not.


Me 2
Old Palo Alto

on Jun 9, 2020 at 11:45 am
Name hidden, Old Palo Alto

on Jun 9, 2020 at 11:45 am

Due to violations of our Terms of Use, comments from this poster are only visible to registered users who are logged in. Use the links at the top of the page to Register or Login.


Dan
Midtown
on Jun 9, 2020 at 11:51 am
Dan, Midtown
on Jun 9, 2020 at 11:51 am
32 people like this

Two spectacularly bad ideas. Tax on someone's subjective "wealth" is impractical to administer and immoral. Banning the primary transport mode is also impractical and wrong headed. For the trifecta, trying to impose these bad ideas within the tiny kingdom of Palo Alto (which we all know makes really efficient use of tax money and thus doesn't need more) while ignoring the fact that people and money can move, is really dumb.


Tim
Downtown North
on Jun 9, 2020 at 12:37 pm
Tim, Downtown North
on Jun 9, 2020 at 12:37 pm
2 people like this

[Post removed.]


Sense
Another Palo Alto neighborhood
on Jun 9, 2020 at 1:17 pm
Sense, Another Palo Alto neighborhood
on Jun 9, 2020 at 1:17 pm
13 people like this

I am an Elizabeth Warren supporter, too, but her wealth tax was for the purpose of paying for people's healthcare, a huge humanitarian and social justice issue, since the US is currently the only first-world nation without high-quality low-cost healthcare for all. (Also the only first-world nation that still has for-profit health insurance--some first-world nations still have for-profit healthcare, but for-profit health insurance is the primary driver behind costs in this country. Not even because of the profits themselves, but because insurers have no incentive to keep the overall cost of the healthcare economy low since they profit/pay investors as a percentage. People don't realize that the care denials are because of the control insurers need to best extract their profits, not to keep costs low for the system, hence we have the most expensive system in the world by far and 1/3 of every healthcare dollar, over half a trillion dollars every year, going to paperwork largely because of for-profit insurers.)

Given how healthcare providers are, ironically, hurting all over the country because of the pandemic, it seems like now is the best time to roll out healthcare for all. It's a social justice issue, it turns out to be cheaper than what we're doing now, and it would bring business to healthcare providers who have seen a precipitous drop off.

Anyway, I'd be less inclined to squander this battle over $2500/year. The 2017 tax changes dramatically increased taxes on California homeowners on the lowest rungs of homeownership, as if the different ways the tax changes could increase people's taxes were literally designed to allow real estate investors and moguls to pick off bargains from the most economically stressed.

The first thing I would want to see is for the people who benefited from the 2017 tax changes that decreased taxes on the wealthiest, to be taxed enough to offset the huge increases on middle class Californians. Not just from here on out, but going back to 2017. I don't think the richest have any sense of how horrendous the 2017 tax increases were on coastal middle income families.

Say we have a family of teachers with 2 kids making $150,000/year, and half goes to putting a roof over their heads, and 20% to pay for someone's out-of-pocket medical for MS, and income taxes are about 15%, so they're living on 15% of that, or about $22,000/yr for a family of four for absolutely every thing else, like food, clothing, transportation, insurance, repairs, everything, including trips to another state to care for an ailing parent. Because our tax codes don't take cost-of-living into account, they are not eligible for most supports for families with such low income.

The 2017 tax changes could have increased such families' taxes by $10,000 or more (speaking from experience with similar circumstances). That's half of what that family actually lives on (with us, it was worse).

If there is going to be a wealth tax, I would want it to realistically offer important supports like childcare and healthcare. I would want to see it offset the huge tax increases levied on a large swath of California's middle class, and maybe even lower their taxes since the richest got their taxes lowered and a wealth tax like this isn't going to take that away.

The middle class is disappearing from higher education nationally, because they are too rich for aid and too poor to pay for college. I would want to see funds go to the California Middle Class scholarship fund, and more money to help lower-income students, too.

As an Elizabeth Warren supporter, I will only vote for a wealth tax that goes to pay for things like the above, not for payouts as much as they would help us personally (since CA middle class were also often not eligible for the stimulus payments).

I think if people pass a tax for such payouts, it will be much harder to pass something that pays for important and essential programs like heathcare. The wealthiest should appreciate the latter, too, since the most people get good problem solving and good health care, the better their options are when they come down with something bad themselves. (Thinking of Steve Jobs who couldn't buy a cure for pancreatic cancer--imagine if everyone who had it before him had gotten the best care and problem solving and thus more possibilities of finding a cure.)

I would also love to see a tax pay to jumpstart flexible manufacturing all over the state, including of pharmaceuticals. If this pandemic taught us anything, it's that our nation has become far too dependent on global sourcing, which is not very environmentally friendly or good for national security.

I think all of the above would cost more than is being proposed. Taking on this political battle should be for something much more tangible and important than is being proposed.


Anon
Another Palo Alto neighborhood
on Jun 9, 2020 at 4:13 pm
Anon, Another Palo Alto neighborhood
on Jun 9, 2020 at 4:13 pm
1 person likes this

Posted by Dan, a resident of Midtown

>> Tax on someone's subjective "wealth" is impractical to administer and immoral.

Because you're afraid you would have to pay more, it is "immoral"? Do you think all taxes are "immoral"? Based on what? If you want to rank taxes on immorality, I suggest *sales tax* as being the most immoral, followed by property taxes that don't have exemptions for smallholders.

In case you have forgotten, taxes were written into the original US Constitution, and, again, with the 16th Amendment when income taxes were (re-)authorized.


Old Palo Alto
Old Palo Alto
on Jun 9, 2020 at 4:47 pm
Old Palo Alto, Old Palo Alto
on Jun 9, 2020 at 4:47 pm
8 people like this

A better solution may be through generational wealth taxes. So many examples of untalented offspring inheriting businesses, assets and other advantages, only to see them wasted. What a person gains from hard work is enjoyed in their lifetime and then given back to society. Everyone bootstrapping themselves, would make for a far more fair, productive and appreciative society. Other inherited benefits such as legacy college admissions etc could be examined as well.


Jeff
Midtown
on Jun 9, 2020 at 6:16 pm
Jeff, Midtown
on Jun 9, 2020 at 6:16 pm
10 people like this

Who invited this "economist" to improve our town?


Susan
Midtown
on Jun 9, 2020 at 6:30 pm
Susan , Midtown
on Jun 9, 2020 at 6:30 pm
13 people like this

Absolute nonsense to tax people because they are successful in their career or business.


Jemaho
Old Palo Alto
on Jun 9, 2020 at 7:25 pm
Jemaho, Old Palo Alto
on Jun 9, 2020 at 7:25 pm
3 people like this

Yes, yes, a thousand times YES. If no one else invited him, this native Palo Altan welcomes him with open arms.


proceeds
College Terrace
on Jun 9, 2020 at 9:53 pm
proceeds, College Terrace
on Jun 9, 2020 at 9:53 pm
18 people like this

Whereas I don't have an issue with levying a modest additional tax on excessive wealth, this proposal is unlikely to garner support unless the proceeds are used for some higher good. Distributing $2500 each to local families and, especially, adding to the state of CA coffers doesn't suffice IMO.


DTN Paul
Downtown North
on Jun 9, 2020 at 10:52 pm
DTN Paul, Downtown North
on Jun 9, 2020 at 10:52 pm
17 people like this

I'm surprised that no one has pointed out that even if you believed in this kind of wealth tax, doing it in a city the size of Palo Alto is kind of dumb because it's not like our billionaires are prisoners. They can move - ironically, just like Mr. Creaven did.


Downfall
Fairmeadow
on Jun 9, 2020 at 11:14 pm
Downfall, Fairmeadow
on Jun 9, 2020 at 11:14 pm
27 people like this

Proposals to further tax the very wealthy disgust me (and I am not one of the very wealthy). The top 1% of income earners already pay 38.5% of income taxes, the top 5% pay almost 60% of income taxes (2017 data - Web Link). We already have a very small percentage of society subsidizing a very large percentage of society. Asking/Forcing these very wealthy to pay more than they already are just feels wrong/unfair to me. Nice way to punish people for being very successful. If the govt needs more money for wealth redistribution they should find ways to cut budgets and not extort even more from the very wealthy.

Regarding cars how about we ban the sale of any car over $50K, including electric. If Mr. Creaven is so anti-wealth there's no reason people should be allowed to own luxury electric cars like Tesla's. Even better lets require every able bodied person to commute by bicycle.


Annette
College Terrace
on Jun 10, 2020 at 8:00 am
Annette, College Terrace
on Jun 10, 2020 at 8:00 am
16 people like this

When these movements come along it seems to me that there's a sort of myopia that allows people to forget that the uber wealthy often contribute to their communities in ways that should not be overlooked: jobs, contributions to non-profits, sustaining the arts, quiet and anonymous acts of generosity. Generally speaking, those who have attained great wealth tend to be smart about money while government at all levels wastes it. For local proof of this, look at the Palo Alto budget. A tax such as the one proposed would probably not hurt the uber wealthy but at the end of the day, given where the revenue ends up, what good would it really do?


Anon
Another Palo Alto neighborhood
on Jun 10, 2020 at 11:13 am
Anon, Another Palo Alto neighborhood
on Jun 10, 2020 at 11:13 am
1 person likes this

Posted by Downfall, a resident of Fairmeadow

>> Proposals to further tax the very wealthy disgust me

Why? The very wealthy have most of the wealth. People in the bottom 90% have 23% of total wealth, and people in the bottom 50% hover near zero. The lowest rungs have negative wealth.

This is all from census and public data which you can look up easily. Sure, the very wealthy pay disproportionate taxes -- they have the money!

Look it up!


S_mom
Community Center
on Jun 10, 2020 at 11:32 am
S_mom, Community Center
on Jun 10, 2020 at 11:32 am
7 people like this

I'm not opposed to wealth taxes in general, but I agree with the prior commenter who noted that it is silly to impose one in a city. If the taxes are anything but nominal, people will move to the next city (and there would also be uproar/lawsuits). And what is this "40% exit tax"? 40% of what?? I can't imagine that could be legal to impose on anyone who already lives here.


Mid town
Midtown
on Jun 10, 2020 at 10:40 pm
Mid town, Midtown
on Jun 10, 2020 at 10:40 pm
5 people like this

Lol! A chemical engineer figuring out taxation. This is hilarious.

So you pay
1) income tax
2) property tax
3) sales tax
4) every other tax

So people already pay approx 70% in taxes, why not take it all? Get large corporations to pay more tax and distribute it.


musical
Palo Verde
on Jun 10, 2020 at 11:00 pm
musical, Palo Verde
on Jun 10, 2020 at 11:00 pm
Like this comment

^ The large corporation that employs me already pays all my taxes. I'm not printing that money in my basement. It's built into what we charge our customers. Add more taxes, prices go up, customers go away.


commonsense
Professorville
on Jun 11, 2020 at 10:28 am
commonsense, Professorville
on Jun 11, 2020 at 10:28 am
2 people like this

Hard to support such a misguided effort. The fact that this gadfly can't see the more direct route to a billionaire's checkbook is proof in and of itself that this sham is nothing more than a desperate statement. Ahhh watching progressives is so entertaining ...


Anon
Another Palo Alto neighborhood
on Jun 11, 2020 at 11:12 am
Anon, Another Palo Alto neighborhood
on Jun 11, 2020 at 11:12 am
Like this comment

Posted by Mid town, a resident of Midtown

>> Get large corporations to pay more tax and distribute it.

It might be nice if we could tax corporations, large and small, on the luxury lifestyle stuff the top brass get to enjoy. But, many of us, including the smallest 401(k) holders who are investing $3K/year, would be paying overall increased corporate tax on profits.

The problem is that the wealthy such a large fraction of all wealth. (Go look it up on the US Census Bureau site, or, derived info sites). It isn't secret. Of course, some folks think that is exactly how it should be. As we move further towards plutocracy, the wealthy will own almost everything, including votes. (Anyone else remember Tom Perkins "plutocracy" talk at the Commonwealth Club in 2013 or 2014?)

The wealth tax is the most logical way to pay taxes when the wealthy own almost everything.


A neighbor
Duveneck/St. Francis
on Jun 11, 2020 at 2:24 pm
A neighbor , Duveneck/St. Francis
on Jun 11, 2020 at 2:24 pm
9 people like this

He is here to improve or to bring down the neighborhood? He should start at his residence neighborhood.


Paly mom
Palo Alto High School
on Jun 11, 2020 at 3:05 pm
Paly mom, Palo Alto High School
on Jun 11, 2020 at 3:05 pm
5 people like this

Well, Mr. Creaven should know that for those really rich people, their assets are usually not under their names, but under trusts or businesses etc. that are usually registered in British Virgin Islands, Vermont state, etc. Even if this asset tax is passed (a big if) in PA, Mr. Creaven May find that not many residents in PA to be taxed.


Jennifer Liu
Palo Verde
on Jun 11, 2020 at 3:54 pm
Jennifer Liu, Palo Verde
on Jun 11, 2020 at 3:54 pm
15 people like this

If you had $50M+ and were considering moving to Palo Alto, would you ever consider moving into a place where you would be taxed heavily, and if you ever dare to escape, you would be punished with a 40% exit penalty??

I agree with someone said earlier "The conversation starts at $50 million but will eventually come down to people with $50K."

When those $50M+ finally all escape, they have no one to tax but those with $40M, and then $30M, $20M, $10M, and then...... $1M, and then ...... eventually to $50K!

When the wealthy stop moving into Palo Alto, what will happen with housing prices? What will happen with proerty tax??

Will people be happy when Palo Alto becomes Detroit?


Sense
Another Palo Alto neighborhood
on Jun 13, 2020 at 1:07 am
Sense, Another Palo Alto neighborhood
on Jun 13, 2020 at 1:07 am
9 people like this


Citing data about how much the rich pay in taxes is cynical and misleading.

In order for us to be a first-world nation, with good national security/military, roads and traffic control, a justice system with courts, a health care infrastructure, public works, ports, medical and basic research, airports, fire safety, communications infrastructure, waste treatment, an education system to educate the workers, a stable government, election systems, etc etc etc, we have taxes.

When the wealthiest make their money, they are disproportionately taking advantage of all of the above, and of the first-world markets. No one has the money to create a first-world nation and all its assets as an investment in their business. When businesses profit from this first-world foundation, they need to pay back in equal measure. The larger the concern, the more they avail themselves of the public trust, and the more they should pay back. There is a reason they don’t go to war-torn Sudan to begin their businesses.

US tax and other policy since the Reagan “revolution” have favored concentrations of wealth at the expense of the middle class, mainly. (Pew Research link)
Web Link

In 1970, the share of US aggregate income was roughly made
62% by the middle class
29% by upper income
10% by lower income

By 2018 it was
48% by upper income
43% by the middle class
9% by lower income

The gap in wealth between upper income and the rest has been rising while the middle class has suffered the most

In 1983, the share of US aggregate wealth was held
60% by upper income
32% by middle income
7% by lower income

In 2016, the share of US aggregate wealth was held
79% by upper income
17% by middle income
4% by lower income

In that time, the middle class has also been disappearing from higher education, sending children to college at lower and lower rates. (Too rich to get financial aid, too poor to afford college.)

There was a time when Republicans, out of fiscal responsibility, paid for national infrastructure and asked the wealthiest to pay their fair share. As you can see from above, they still did quite well. This policy built our middle class, educated a whole generation under the GI bill, and made us the economic envy of the world. Reagan changed all that, and we are now seeing the negative effects of over 40 years of disinvestment in our nation and our future. All that time, the wealthiest have made out like bandits and not paid their fair share for the publicly funded foundation/infrastructure and privileges they made their money from. They now have so much more of the wealth and income than everyone else, this is where the money must mostly come from if we are to remain a first-world country.

Why is it that people think that the wealthiest should be able to enjoy all these first-world benefits and markets and pay nothing back when they profit from it, but the investment the poorest need to be successful, like childcare and healthcare, those are considered their responsibility to pay for? Countries that have far better economic mobility than we do have learned the lesson from our own past, such as when we paid for most educations through the GI bill and basically built the state college systems.

@Annette,
> "Generally speaking, those who have attained great wealth tend to be smart about money while government at all levels wastes it.” That statement is just wrong on so many levels. I would challenge you to read Michael Lewis’s The Fifth Risk to start. He looked at a couple of government agencies that he knew nothing about, and discovered that they’re mostly doing a lot of efficient work that protects life and limb for most of us, and they don’t sing their own praises like a corporation with PR people.

A recent Pentagon internal report found that civil service is usually cheaper than contractors doing the same work, especially in some regions of the country. "More than 75 percent of comparisons in the Southeast the Pentagon ran between government and contract workers showed a higher cost for the private sector” Web Link
This is not always the case, but the point is that your belief is based on false myths spread by people who benefit politically and economically by them, and there’s no one on the other side being responsible about setting things straight. The American public gets a huge amount of value from its government and civil service, and NOT paying for the things that only government will do can cost us plenty, as we have seen in this pandemic with almost no functioning public health system anymore.

I would just remind you that our founders fought a revolution to give us this form of government, and that it is US, we the people are the government. The systematic weakening of our government by the rightwing ever since Reagan (drowning it in a bathtub, I believe they said) which has hollowed out our power and functioning as a nation from the inside and made us vulnerable to other nations like Russia, was done to undemocratically weaken the power fo the people in favor of concentrations of wealth and power.

The point of government of, by, and for the people is that there are supposed to be checks and balances, and we can improve it and petition it. I would point you to all the profligate spending by the wealthiest if you really think they are all so careful with wealth, but that’s not what’s important. The point is that they make money for themselves (starting with a foundation of public investments), not for our national prosperity. They may create jobs, but nothing like the job creation that happens when millions of people are doing well because we have a middle class and an economy with a lot of circulation wealth and millions of small businesses (which made up a far larger portion of the economy in the 1950s by the way) rather than just a small number of sources that hold virtually all the wealth. In the latter case, any bump in the road (like now) and the whole economy goes on the skids, people have no buffer.

As for this proposal, a wealth tax with no real purpose will backfire so surely, it makes me wonder if the person proposing it has that as an agenda. General Eisenhower, a Republican (of the extinct fiscally responsible kind we haven’t seen in 50 years), believed in the importance of national infrastructure like the interstate highway system, and he didn’t believe in deficits and debt, so under his administration, we say an 80 or 90% marginal tax rate on the wealthiest. The wealthiest, by the way, still did just fine. And our nation prospered, those were really the golden years for the national middle class and for our nation’s global influence.

The wealthiest haven’t had to pay their fair share for almost 50 years. That should change. But we have a lot of broken down infrastructure, education, scientific research, and investments like public health we need to be making. (I hope in this pandemic the wealthiest can see that it’s for their benefit, too.) This proposal is indeed misguided, but a wealth tax for important public investments, to begin rectifying the disproportionate taking by the wealthiest in recent decades, is long overdue.

Locally, residents have been paying for the development applications of wealthy corporations that quite literally pay nothing in taxes to offset their negative impacts on our community. The worship of "businessmen" has come to such a ludicrous conclusion that adherents have swept in someone to lead the country who has bankrupted 6 times with a $450million head start, at one point taking the largest business loss ever on his taxes, but because he's a "businessman" he supposedly has magical qualities that make him better than someone with competence and experience who remembers that the job is about serving the American people, not about him.


Sense
Another Palo Alto neighborhood
on Jun 13, 2020 at 1:16 am
Sense, Another Palo Alto neighborhood
on Jun 13, 2020 at 1:16 am
12 people like this

The 2017 tax increase hit my family really hard. No wealth tax has ever suggested that the wealthiest fork over more than half of everything they live on or even close. Look at the data above. A tax designed to give the wealthiest more money on the backs of the middle class in poor states is wrong, yet I saw no one among the upper class pushing back. Stop carrying water for them, they don't need it and neither does our nation.


Resident 1-Adobe Meadows
Adobe-Meadow
on Jun 14, 2020 at 11:46 am
Resident 1-Adobe Meadows, Adobe-Meadow
on Jun 14, 2020 at 11:46 am
4 people like this

We seem to be a target for opportunist. That is our first problem in that we keep trying to get into national newspapers. People jump on a political theme and there you go - opportunity is right down the path. He is not going to get anywhere because no one is going to sign any papers for funding.

Another opportunist is any CA political wannabe's that use world wide climate change as their signature issue.

In case they have not noticed there is an organization called the European Union which controls the funding and functions of 23 nations which are signed up to their control. All the US can do that case is be an ATM card for what ever schemes they are up to.

Those are the countries that ran WW1 and WW2 -fought on their territories. Also the Franco-Prussian War of 1870 which drove a large number of migrations to the US. Same group in 1884 - Berlin Conference which this group determined how to divvy up Africa as colonies. Poor Italy lost out here - their Army could not take over Ethiopia.

So all types of schemes out there - all which involve money and someone capitalizing on other people's earnings.


Anon
Another Palo Alto neighborhood
on Jun 18, 2020 at 8:54 pm
Anon, Another Palo Alto neighborhood
on Jun 18, 2020 at 8:54 pm
2 people like this

You know, there is a nice little Wikipedia article on wealth taxes. At the moment, the three top countries in terms of fraction of taxes collected via wealth tax are Luxembourg, Switzerland, and Norway. Web Link Which all happen to be very prosperous countries. The top three (if you exclude Monaco) ranked by the IMF nominal per capita GDP.

That makes me think that wealth tax might be good for the economy of a country. The trick here is that Palo Alto is not a country. (California sometimes is viewed that way, but, Palo Alto?) I'm not sure if, according to economists, it would be practical for a smaller sub-unit, such as a city.


Nayeli
Midtown
on Jul 8, 2020 at 9:03 pm
Nayeli, Midtown
on Jul 8, 2020 at 9:03 pm
9 people like this

I received a mailer today that urges residents to sign a petition for a "Wealth Tax Ballot Initiative." Even after reading this article and the very limited information on their website (Web Link), I am still confused. Is this an INCOME tax or a tax on what you already have?

Obviously, no one earns $1 Billion per year. In fact, the difference in income for billionaires can be quite limited -- as most of their income is low after an initial IPO. I'm hard pressed to see if anyone in Palo Alto actually had an income of $50 Million this year.

I think that it is thievery to tax someone for what they've already earned. It is even worse to try and tax them 40% of their net worth for simply moving out of the city, county or state. In fact, I suspect that this would be found unconstitutional.

Did anyone else receive this confusing mailer this week?


net worth
Fairmeadow
on Jul 8, 2020 at 9:15 pm
net worth, Fairmeadow
on Jul 8, 2020 at 9:15 pm
1 person likes this

My understanding is that this is a wealth (not income tax).


Sense
Another Palo Alto neighborhood
on Jul 9, 2020 at 8:05 am
Sense, Another Palo Alto neighborhood
on Jul 9, 2020 at 8:05 am
1 person likes this

@Anon
I agree with you except that a wealth tax for its own sake would be bad. A tax to invest in the country the way the examples you gave do would help ensure prosperity for all including future rush people.


Anon
Another Palo Alto neighborhood
on Jul 9, 2020 at 9:20 am
Anon, Another Palo Alto neighborhood
on Jul 9, 2020 at 9:20 am
1 person likes this

Posted by Sense, a resident of Another Palo Alto neighborhood

>> @Anon I agree with you except that a wealth tax for its own sake would be bad. A tax to invest in the country the way the examples you gave do would help ensure prosperity for all including future rush people.

If we are speaking of taxation policy in general, I would like to abolish sales tax (that includes VAT), which is the most regressive, and the most market-distorting tax. As Ronald Reagan said, "revenue neutral" tax changes. Except that Reagan's tax changes resulted in the "1% problem" that we have today.

Web Link


Resident 1-Adobe Meadows
Adobe-Meadow
on Jul 9, 2020 at 10:03 am
Resident 1-Adobe Meadows, Adobe-Meadow
on Jul 9, 2020 at 10:03 am
7 people like this

I am sure that the gentleman is part of the current Marxist invasion of the US. All it what it is and then start from there.


Sense
Another Palo Alto neighborhood
on Jul 9, 2020 at 10:39 am
Sense, Another Palo Alto neighborhood
on Jul 9, 2020 at 10:39 am
6 people like this

@Resident 1
Marxist, oh brother. The next histrionic name calling of a plutocracy built on lies.

Oh no! Those Democrats want to save us from a worse cataclysm than this pandemic by having clean air, water, and a survivable earth! Educating everyone, and saving lives through affordable healthcare that every other developed nation in the world—especially all the most prosperous democracies that have reopened their economies and spared their people from the death and chaos we’ve had her—has except us at a fraction of the cost! Heaven save us from the Marxist Commie radical left who actually want this nation to prosper as a free democratic nation rather than just pontificate and lie about it!

@Anon
“ Except that Reagan's tax changes resulted in the "1% problem" that we have today.”
And Reagan’s budget director David Stockman admitted Reaganomics was a concoction, a Trojan Horse, to cut top tax rates, and thus began the basic modus operandi of all Republicans since then: lies for plutocracy. This is why what we have now is a potus completely untethered from truth and his adherents who will say anything regardless of how untethered it is from reality, like Resident 1 above. But watch out, as soon as you hit the nail on the head, their latest liar in chief has taught them to just accuse Democrats of whatever it is you just pointed out they are actually guilty of. Since they are untethered from truth, it has become easy. So watch for it.

Presidential data.org compiles a picture of what I’ve seen even conservative sources admit, and that for as long as the two main parties have been ideologically what they are now, the economy has done better by pretty much all measures under Democrats than Republicans. Even Trump himself before running for office said publicly that he noticed the economy does better under Democrats. (True to his beliefs, he was tanking the strong economy he was given before the recession due to his tariffs, jacking up the debt/deficit which were the right’s main criticisms of Obama, and leaving manufacturing in a recession.). Almost all of the last dozen recessions began in Republican administrations.

Sorry to burst your 6th-grade-bully/liar-Name-calling Bender, @resident, but the people you most fear are the ones delivering the fiscal responsibility, prosperity, and freedom, while the right pushes to lie for the power to create the wholesale taking of wealth and income from the poor and middle class and funneling it to the rich.

But don’t worry, if you and the right keep this up, history shows that there really will be a reckoning with a opposing extremism, and you will really have something to match your name calling, if we all survive the inevitable violence.

I choose democracy and a strong, free, fair, fiscally sound nation, and in my lifetime since Reagan, that means exclusively Democrats.






Resident 1-Adobe Meadows
Adobe-Meadow
on Jul 9, 2020 at 10:51 am
Resident 1-Adobe Meadows, Adobe-Meadow
on Jul 9, 2020 at 10:51 am
4 people like this

Hey Sense - the lady that is the head of the official BLM movement on FB says she is a trained Marxist operative. And she is proud of it. So check out Marx and Engel on Wikipedia - it gives you the Communist Manifest and breaks down their strategy. Yep - exactly what is happening. First - put a check on the police forces. then go from there. Do some research here. - Get on Wikipedia to look at facts.


Sense
Another Palo Alto neighborhood
on Jul 10, 2020 at 11:03 am
Sense, Another Palo Alto neighborhood
on Jul 10, 2020 at 11:03 am
3 people like this

Web Link
BLM has been the subject of rightwing and possibly even Russian-backed trolls trying to SMEAR the social justice movement since long before George Floyd’s murder. One version of this smear went all the way back to Ferguson which was claimed to have been secretly organized by Communists.

More frightening is that anti-coronavirus-stay-at-home-protections Facebook groups are pivoting to smear BLM, by trying to get white people to think of them as thugs and violent.
Web Link

These groups have floated a lot of propaganda purporting to speak for BLM and make them seem like a racist/violent/Communist group, whatever whites might find repugnant.
Web Link

I cannot speak to this claim, but I looked it up and find a couple of things that make me skeptical:

1. Black Lives Matter is the subject of ongoing efforts to smear it through disinformation.

2. I looked up the BLM website to see the platform today and see nothing to indicate that it’s a “Marxist” organization or anything except intended to support the intended purpose of ensuring that Black Lives Matter.

3. When I tried to find sources for said video, I could only find rightwing sources.

4. I can't see how it even matters.. Donald Trvmp has said “I’ve been around for a long time and it just seems that the economy does better under the Democrats than the Republicans.” And while in that case there is a lot of evidence that it’s true the economy does better under Democratic administrations by almost all measures Web Link , this does not by any stretch mean that Donald Trvmp is a Democrat today or that he is the leader of a Democratic movement or that Democrats are driving his campaign..

5. BLM protests have been largely peaceful and have had to contend with baiters and haters trying to make it seem otherwise. FOX News coverage has focused on relatively few incidents of violence and making it seem like a violent movement, and they have repeated this claim.

7. There is a history of attempts to claim BLM is a backed by Communists, just as the Republicans have a history of trying to call anything Democrats do Communist, like universal healthcare, even though now every developed country in the world except the US has some form of universal healthcare, even though we spend far more per capita than anyone (especially on healthcare bureaucracy because of private for-profit insurers).


Sense
Another Palo Alto neighborhood
on Jul 10, 2020 at 11:04 am
Sense, Another Palo Alto neighborhood
on Jul 10, 2020 at 11:04 am
5 people like this

8. Political violence in this country has been almost exclusively the domain of the RIGHT for the last 40 years, and it has gotten worse in the last few years.


Anon
Another Palo Alto neighborhood
on Jul 10, 2020 at 12:38 pm
Anon, Another Palo Alto neighborhood
on Jul 10, 2020 at 12:38 pm
1 person likes this

Posted by Resident 1-Adobe Meadows, a resident of Adobe-Meadow

>> I am sure that the gentleman is part of the current Marxist invasion of the US.

Please see the citation below. Direct taxes were encompassed by the Founders broad view of taxation in the Constitution, and, of the Founders/early Presidents, only one, (future President) Monroe, opposed such taxes. In fact, direct taxation was one of the key differences between the Articles of Confederation and the Constitution.

"The Federalist victors in the Constitutional Convention were not about to limit the taxing power of the new national government. As Washington explained to Jefferson in far-off Paris, if the new Congress was not to have the direct tax, how was it to repay the war debts and redeem the Congressional honor? If it did not have the direct tax, the country might as well revert to the confederation form. No hobble on federal tax was intended or tolerable in the adoption of the Constitution."

To hear some ("so-called") conservatives talk, you would think that the -United- States was actually still the collection of states known as the Confederation.

In 1895, the wrongly-decided Supreme Court decision, "Pollock", overturned 100 years of taxation law. Ultimately, the 16th Amendment (1909-1913) had to be passed to re-establish the legal right of the Federal government to levy direct taxes.

Web Link

>> Hey Sense - the lady that is the head of the official BLM movement on FB says she is a trained Marxist operative.

I'm not sure what BLM has to do with this particular aspect of tax policy, although, "revenue-based policing"** certainly has been an issue.

Web Link

** AKA "for-profit policing" "profit-based policing" "revenue-driven law enforcement" etc -- read all about it on the Web


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