If this is the optimal rate, the headline takeaway should probably be that other factors matter a lot more WRT innovation than tax rates, since high tax places (eg CA) tend to outperform low tax places (eg TX).https://twitter.com/paulg/status/1084088082931036160 …
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“Propping” makes it sound like you believe SV is going to decline or on bad foundation...that the appropriate takeaway?
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I don’t know. But suspect it is more fragile than most suspect.
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It’s not that taxes don’t matter, it’s that their influence on where businesses are formed or inventors invent is greatly overstated. IMO cost of living problems are 100x more likely to usher in a decline of SV than high taxes. Poor entrepreneurs generally only feel the former.
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Agree although I posit that those are connected.
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Prop 13 meant lower home taxes for most. Now, it means higher home prices for most (since selling is a bad idea when your taxes are close to 1/10th.) The discount has become a premium.
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It’s best to think of prop 13 specifically as a transfer from the young and the inbound migrants (and companies that employ them) to the older middle class (the rich benefit much less). You could design a worse tax on innovation, but you’d have to try hard.
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Fairchild semiconductor formed in 1957 when the top federal rate was >70%. Just sayin’
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Nobody paid it. And CA state taxes were marginal.
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Keith, mate. SV was built when housing there was so cheap that everyone could not only afford it with one paycheck, but they had enough extra space they could build a manufacturing business in their garage. Do you know any startup founders who can afford a garage?
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Yes, very simple. Just build housing.
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