Matt Mahan

I think if you actually educate people on the likely unintended consequences, how much capital flight has already happened, how revenue may be reduced.

I mean, here's the sad truth of this is, and this may be the message people need to hear.

I don't think it will be the billionaires and the wealthiest who pay this tax.

And you're right that it isn't just billionaires who are leaving because people don't believe it's a one-time tax on billionaires.

They assume that threshold will be lowered by the legislature over time and it will become a recurring wealth tax.

What that means is as wealthier individuals, people who own companies, leave the state, it will be the middle class who is left holding the bag and asked to pay more to cover the existing services and infrastructure maintenance that the state needs.

And that's why we've got to look at better ways of doing this.

I mean, just when it comes to the tax code, I think there are a number of things that make more sense.

You could raise the capital gains rate.

If the argument is that returns to capital are outpacing returns to labor, then we should be adjusting the capital gains rate.

I also don't think that...

very wealthy people should be able to endlessly borrow against appreciated assets as a way to avoid paying capital gains on those assets at some point.

Well, as I understand it, and I don't know, I'm not a particularly wealthy person and not an accountant, so I'm not an expert in this, but as it's been explained to me, if you have tremendous assets, you can go in at a very low borrowing rate, very low interest rate,

borrow money against, you can put up as collateral, say your stock options that have value, but you've never paid a capital gains tax because you didn't sell them.

And so you have this collateral that you can borrow against, then you can use the borrowed money to invest or spend on whatever you want.

And you've just effectively avoided ever paying the capital gains.

And that can drag on for decades.

That's right.

You're not taking a salary.

Your wealth is a capital gain that is sitting there unrealized for tax purposes.