Three states will vote on tax changes next month. California wants a wealth tax. Other states want to raise or lower rates on high earners. Voters get to decide whether rich people should pay more or less money to fund things they'll never personally use.
The wealth tax is the star here. Not an income tax. A tax on assets you already own. Your net worth becomes taxable. Every year. Whether you sold anything or not.
This is like charging someone rent to keep their own furniture. Except the landlord is the state and the furniture is your brokerage account.
High earners will respond to this the same way they always do. They'll hire accountants who cost more per hour than your car payment. Those accountants will find seventeen legal ways to restructure assets so the tax burden drops to zero. The state will collect less revenue than projected. Politicians will act shocked. Retail traders in California will somehow convince themselves this doesn't apply to their four shares of NVDA.
The other states aren't doing anything interesting. Just normal tax rate adjustments. Up or down. Doesn't matter. People who earn enough to care about these votes don't live in one state anyway. They live in whichever state has the lowest rate that particular quarter.
Voters love these initiatives because they get to feel productive. You walk into a booth. You check a box. You pretend you just solved inequality. Then you go home and check your Robinhood account, which is down 40% because you bought a stock some guy mentioned in a Reddit thread titled "This Will 100x."
The funniest part is that none of this will change anyone's trading strategy. High earners will adjust. Poor people will stay poor. And you'll still be googling "why is my stop loss not working" at 9:45 AM on a Wednesday.
Photo by The New York Public Library on Unsplash
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