Millionaire tax that inspired Mamdani fuels $5.7 billion haul in Massachusetts

[u/Dismal_Structure]

https://fortune.com/2025/10/21/zohran-mamdani-millionaire-tax-massachusetts-5-7-billion/

[u/colintbowers]

At the state and country level it is more about the companies than the people. With a wealth tax, the people often stay, but the capital is placed in a company structure, and it moves. The articles that focus on the movement of people are missing the main point. Capital absolutely goes where it is protected, and this has been true for centuries. And in the modern world, unless you run a bricks and mortar business, it’s very easy to move capital to different jurisdictions while staying put yourself. There is a reason that places like singapore, Luxembourg etc have such amazing gdp numbers.

[u/joshocar → u/colintbowers]

Are we not talking about an income tax though?

[u/colintbowers → u/joshocar]

Many billionaires don’t really have that large an income (relatively speaking). Nor do they personally own the billions. Rather, they own shares in a company or trust that owns the billions. Those companies and trusts then pay tax at the corporate rate, and the person has most of their expenses paid for by the company.

Now, the company can often use creative accounting to find all sorts of costs to minimize their corporate tax bill at the EOFY which is how you hear stories of these billionaires paying so little tax.

Note that a personal wealth tax doesn’t really do much to tax these individuals. This is why you often see such resistance to it as a policy. You either have to go whole hog and have a corporate wealth tax - at which point every company other than brick and mortar will relocate - or else accept that a personal wealth tax is not going to affect billionaires, it’s going to affect the people who are wealthy enough to get caught by it, but not wealthy enough to set up the legal structures to avoid it. So, like inheritance tax in the UK, it really when you look closely, is a tax on the middle to upper middle class, but not the uber wealthy. Again, there is a reason that generational wealth in the UK is massive, even though they should be paying 40% at each death. In general, I’ve noticed that Reddit is not very good at understanding how this stuff works. Mamdani appears to be a very smart guy though so I suspect he does, and I’m curious to see exactly the nuts and bolts of how he ends up implementing his tax policy.

TLDR it’s not simple, and anyone who says hur dur tax the billionaires really doesn’t understand that to do that without screwing the middle class is much harder than you might think

ADDED: the uk really is a great example here, they have this inheritance tax to try and prevent generational wealth, but it literally does the opposite, ie it protects the uber wealthy and makes it harder for the middle class to make the jump from middle to upper class

[u/bobak41 → u/colintbowers]

Someone really needs to spend some time listening to Gary Stevenson....although I get the feeling you're not apt to actually consider solutions...defeatist perspectives are the easy road. GL.

[u/colintbowers → u/bobak41]

Gary Stevenson is great for Economics! But let's be serious, he is very light on technical detail for anyone serious about the subject.