what if two higher tax states both claim they are your home state because they want to fight over your taxes. this must happen. that's different than moving 'mostly' to a lower tax state. and then what's the threshold for ny claiming you moved there? what a mess.
It happened to my buddy who happens to be millionaire and flies every few weeks cali versus new york. Two years ago state of california sued him for non payment of taxes. It went down to literally receipts from gas station making difference proving he spent over 183 days in new york versus cali. intresting - credit card purchases were not admitted because state tried to prove he used proxy (he does) so he could be in any state when purchasing off of Amazon. He won and gov appealed Then cali went after new york asking for all the evidence of his taxes knowing new york wont comply. For over year both states fight with each other with my friend being literally non-involved. Eventually cali dropped the suit some 16 months after filing appeal.
This is insane. Why don't we just pay the federal government the entirety of our tax obligation and have them partition it out to the states? I'd love to spend less than half the year in any one state or be completely state-less.
Americans are deathly afraid of government. It's not just the lower or extreme classes. As you can see it's pervasive even on HN. The irony is that Europe, Australia etc are much less "dangerous" than the US
I don't live in a movie, but I definitely don't want to remove anything remotely dangerous to my person (see: everything) because it has the capacity for danger.
We have a different mindset and tend to see the state as a big, albeit slow and annoying, institution that's meant to work for us (minus corruption). See Rousseau's "social contract". From what I've noticed Americans tend to lean more towards "state = bad; state = tyranny".
There is a certain irony, seeing that bar outright dictatorships (China), the US state is and has been the strongest one for over half a century...
The US as a nation was/is strong thanks to its people, not the government. This has been due to the fact that the US Constitution is restrictive - individual freedoms are expressly permitted and functions of the state are explicitly limited. In effect, the government was disciplined as opposed to incredibly overbearing; individuals were allowed to grow, learn and create for themselves instead of relying on government.
That system has been attacked from the beginning and the US is rapidly becoming a nation where government replaces the family as social structure. What is now will not always be - the trend is of far greater importance than momentary status.
"individuals were allowed to grow, learn and create for themselves instead of relying on government."
Individuals are not able to do any of that when they're stuck working 3 jobs just to get by, or when they go bankrupt due to a simple medical procedure.
Concentration of power inevitably leads to abuse - the only question is how long it will take until the taxation burden becomes overwhelming. It appears we're fast approaching that point and the next decade will break many Western nations while what are currently considered developing or emerging markets will rise to prominence.
1. US had the longest period of high growth when taxation was "overwhelming" (post-war boom).
2. Several developed countries have "overwhelming taxation", yet quite high economic growth and are among the world's top 10 regarding human development.
3. Developing countries will have to increase their taxation. That's how development works: you get a bigger and more effective state that can offer advanced services reliably.
4. Almost all underdeveloped countries, on the contrary, have weak states that can barely collect taxes.
1. There are numerous cyclical factors that affect the productivity of a population. Growth in the US post-WWII was strong enough to offset taxation. Additionally, the US has enjoyed a status of economic core which has helped to prop up the tax regime. However, it is plain to see that has been crumbling since the early 2000s.
2. Name some countries - are they growing more than 10%?
3. Increasing taxation is how the strangulation of a population works, so in that sense you are correct. The state always fails. If it didn't, and taxation "worked", we would be living in a utopia.
4. Weak States that cannot enforce taxation are the ones where the population has freedom to grow without onerous tax burdens and corporate protectionism.
A static view of the world assumes taxation is necessary. A nonlinear view recognizes the destruction it causes.
2. Sustained growth at more than 10% is not realistic, especially for developed countries. I'm from a developing country and turning dirt farmers to office workers consistently will grow your economy by 10%. At some point you're going to run out of dirt farmers. This point is moot.
Regarding high, realistic growth (2-3%) for developed countries: Singapore, Sweden.
3. States tend to fail far more often due to external factors. In the modern era that's becoming rarer and rarer as the cost of destabilizing a foreign state generally outweighs the benefits.
4. I'd be very happy if you could show me some examples. Which "weak states" are developed states? I wouldn't call any state in a developed country a "weak state".
2. Sustained growth at that rate is unrealistic. Going from dirt farmers to office workers is the kind of shift we're looking at over the next decade, but with a shift from office/service to creative work. Machinery displaced farming and automation/robotics is starting to push office labor off in a different direction. I would argue that developed nations are less prepared for that as their economies and retirement structures are ill-suited to that paradigm. Established systems also tend to fight to to bitter end by increasing taxation to make up for lost revenue.
3. Yes, most states are not part of the core; peripheral nations fail long before the foundation does. Thankfully the cost of such failure has become much less likely to result in loss of life.
4. Not weak states that are developed states - ones that are considered developing, yet experience growth largely due to lack of excessive taxation and regulation thanks to weak government. They are thus progressing toward becoming developed. Two examples are Georgia and Puerto Rico - the amount of growth and development in those locations are proportionally far greater than other nations in similar locations and situations. This is directly affected by investment capital, much of which has left high-tax jurisdictions.
2. The economic limit to growth for developed countries is that you can't just force ideas out of people's heads. Automation/robotics improve things, but the productivity difference when averaged over a whole country is still not 10% per year, between developed countries. Keep in mind a growth rate of 7% means a doubling of an economy every 10 years. It's not reasonable to expect a doubling of economies every 10 years for developed countries, history has shown this repeatedly.
3. I'm an optimist, I don't see any signs of the foundation falling. The counterargument is that the fall is rarely seen ahead of time. Still, I think we can just file this as a difference in perspective and call it a day :)
4. Georgia, the state, I assume? Assuming it's the state, ok. But how come the vast majority of high-flyers still don't move to these states? How come those "oppressive" taxation regimes keep producing heavy hitters? Same thing is happening in Europe. Sweden, Norway, Germany, France, the UK, etc. have high productivity and high taxation. You'd expect everything to leak over to the low taxation countries. Yet these countries to lose a percentage of the high productivity members but come up with new ones. There must be something at work here (such as high taxation, coupled with half-decent administration, creating a good overall environment for productivity).
2. Agreed. Out of curiosity, would you consider it sensible to directly tax the production of a robot?
3. The larger the trend, the easier to forecast. Historically, empires fail slowly and then enter a rapid final decline. Martin Armstrong may be of interest, as he has built an extensive database and system that has analyzed the set.
4. Georgia the country, although the US state is one that is doing better than others[1] in the nation. Residence is sticky since it's expensive to relocate, so the incentive to move must be particularly high. There are certainly perceptions that persist with a lag since a practical perspective depends heavily upon direct experience, e.g. NYC is not the same place depicted in movies from the 1980s. The magnitude of resources available to be redistributed within a highly dynamic system can be significant. It is almost impossible to pinpoint the exact breaking point but the trend can be much more easily observed.
Turkey is an interesting place - domestic production includes almost everything except higher technology, yet the economy is precarious due capital fearing the government.
What I'd personally favor is super high income tax brackets for the very rich (income > $1 billion puts you in a 95% tax bracket for everything above 1 billion) and the state getting a percentage of a corporation automatically after it goes above a certain scale (say 5% at 1 billion, 20% at 20 billion), with the restriction on the state's share usage. This should take care indirectly of the "robot production", via the owners. Once you'd do this universal basic income would be interesting.
This should only be implemented if there's some sort of global tax agreement, otherwise the state that does this will have its tax revenue slither away to other countries.
But this needs an attitude of "fixing the state", not "starving the beast". Treat the state as an unavoidable single point of failure and harden it. Checks and balances, more transparency, more direct democracy, etc.
3 & 4. This is already getting super philosophical. I need to follow this phenomenon more, can't really say anything super relevant. Intuitively I'm not sure I agree.
> Romania is on my travel list :)
Go to Bucharest for the night life (preferably with a somewhat reliable local guide). Go to Brașov, Sighișoara, Sibiu for the medieval monuments and buildings. Go to Bucovina for the great landscapes and the beautiful monasteries. Go to Maramureș for the same reasons, but with a different twist. Go to the Apuseni for the rural life, unchanged since centuries.
Avoid the Black Sea (Constanța, Mamaia), except for the Danube Delta, which is a nature reserve.
I've been both a wage earner and a business owner, having gone from a similar perspective as yours to wondering why I was funding incompetence, laziness and war by paying taxes. Most business owners I've met, both small and large, share that stance yet are genuinely good people who feel obligations to their employees in terms of providing a secure environment and paycheck. Our life experiences definitely shape our views.
"you get a bigger and more effective state that can offer advanced services reliably"...are you kidding? The healthcare system in the UK is in danger of collapse and likely to be bankrupt in another decade or so. A "bigger and more effective state" sounds like an oxymoron to me. Many of those countries that have high tax burdens also have a culture that values working and as such, they do not as many social parasites as we have in the US.
The US has many social parasites? I think you're too caught in the day-to-day to notice how things are. The US is one of the hardest-working places on the planet. You take fewer days off and work longer hours than most people.
The UK healthcare system is in danger of collapse because it has been slowly starved of the income it needs to operate effectively, by a government which is idealogically opposed to its existance and whose members generally stand to gain substantially from privatising it.
Thank you for pointing this out. It seems that "Governments are ineffective" is taken as a universal truth around here, without considering the fact that pro-privatisation governments have a very strong incentive to make programs inefficient. If you want a more efficient government, vote for people who support government programs.
> US had the longest period of high growth when taxation was "overwhelming" (post-war boom).
One's economy tends to do well when one has intact factories & workforce while the rest of the civilised world has been levelled and much of its workforce slain. We'll never see something like the post-war boom again unless we see something as utterly, senselessly destructive as the war itself (note that the economy would ultimately have been better in the long term had there never been a war).
The effective income tax rates in the US in the 1950s, even on the top 1%, were barely higher than they are today and in many cases lower. The tax structure was significantly different, so a naive comparison might lead you to believe otherwise.
Germany goes even further. The authorities collect tax for the religious organizations since 1919. If you're a Roman Catholic moving to Germany, suddenly you're faced with 8-9% of extra income tax.
That I think comes from various claims to the land which, while freehold, has certain obligations (just like you may have covenants for neighbours to be able to access their land over yours).
It was particularly bad until recently, as the obligations were often hidden. They no longer are - if there's an obligation it's right there on the land register, just like covenants, and show up in the standard searches during the conveyancing process. It's effectively a land tax to support a local amenity -- churches are part of the cultural background of British villages. I'd rather a formal land tax system to support all local amenities.
You don't have to pay that if you actually bother but it also has some other implications. IIRC if you pay church tax then the church you are part of is required to hold your burial, otherwise there is no direct obligation though they can if they want. In turn the church has the ability to levy rules, laws and taxes (as long as they don't break or inhibit existing law), ability to set religious holidays (which your employer will have to honor), religious school classes and some other neat stuff.
Of course, as mentioned, you can not have that and just pretend you're not in any of the recognized religious organisations.
It's how it's done in Brazil and it does not work out. States constantly pleading for more money while the Federal Government wants to spend it itself, or gives preferential treatment to certain states, while others languish.
The whole point of a federal government is to decentralize authority. If the taxation power rests with a single authority in the United States, then federalism would be dead and the central government would have all the power. It's not necessarily wrong (though I believe it would be a bad idea), but this is one of those questions where the answer to "Why can't the world be simple?" is "Because the world is complex."
OK, I'll bite. Australia has a population of ~25 million, similar to Texas. So let's work with something of a similar scale to the U.S.: Would you be okay with having all of Australia's taxes being collected by the Commonwealth, and then getting your portion that way?
The population is pretty much irrelevant to scaling for this problem. The relevant parameter is the number of political subdivisions that the national entity would be distributing taxes to, which would be ~50 in the US and ~6 in Australia.
...to elaborate, population is irrelevant because the national government is going to collect taxes nationwide for itself regardless of whether or not collecting taxes for the states is added to its duties.
The "this problem" that we are talking about here is the problem of the national government handling state taxes in addition to national taxes. For this problem the national government is dealing with states, not individuals, and so it is the number of states that it has to deal with that is the main factor affecting complexity and scaling.
Yes, but only because states can't actually collect taxes. [0][1]
Hence, each state collects levies, fines, rates, stamp duties, privatise public services and various other money grubbing exercises in order to raise capital for themselves so that they can waste/embezzle it according to their whims.
Then there's the problem of disproportionate tax distribution, which most states, particularly WA, seem to raise constantly.
Australian states can collect income tax, and did so. But the High Court found that the Commonwealth could collect tax under the Defence power and that it could essentially crowd out any state collection by being first in line.
The states gave up on the practicalities, but they still have the theoretical power to collect income tax.
Oh it does not. Take GST division. WA is now getting back about 38 cents in every dollar it collects leaving a massive state budget deficit. States like South Australia get back $1.20 or more.
Why? Because when the GST was introduced WA'S resource income was counted... During an unprecedented resources boom that has since collapsed. You know what doesn't get counted? Poker machine income, which is substantial in the three Eastern states.
Can it be changed? Technically, yes. Practically is incredibly difficult because no one wants to give up revenue and politicians are worried it'll be electoral suicide, which it may well be.
The fact that the government has proposed anything at all, however anemic, is kinda amazing.
Exceptionalism makes it really difficult to engage with conversations about US politics where you try to say, "It doens't have to be this way!" but get told that the US is somehow different to every other developed nation and couldn't possibly apply what works elsewhere.
This happens across the US political specturm, whether about their tax system, banking system, gun reform, electoral reform, and many other issues; it's a frequent refrain that the US is so different it can't learn from others.
As a US citizen who is resident elsewhere it is infuriating to watch.
> This happens across the US political specturm, whether about their tax system, banking system, gun reform, electoral reform, and many other issues; it's a frequent refrain that the US is so different it can't learn from others.
Alternatively, it's a frequent refrain that the U.S. _should_ learn from others, which is e.g. why we should preserve our federal system, electoral system and rights.
I think it's a _good_ thing that the several states are separate sovereigns from the United States, and I think it's a good thing that the states are entirely reliant on the United States for their budgets (and in fact, those places where they are reliant, e.g. the highway budget, have led to anti-federal things like a uniform drinking age, something which is 100% not the business of the United States government).
States learning from each other is good, but there's no reason to restrict that learning to other states within the same Union (which for cultural and numerical reasons are more homogenous than the total population of all states).
If the United States looks only inwards, however, there's nobody left to learn from in terms of how to run a Union, since there is only one United States, and its powers and responsibilities are (because of federalism) quite different from those of the states.
I am happy if someone claims that something politically isn't possible in the US. (Gun control may be a good example) I can't claim otherwise, my issue is when instead of arguing that, someone claims that a measure wouldn't have the same outcome in the US or technically isn't possible in the US without any evidence of such.
It shifts the blame from the current politics which is something people can engage with to "reasons out of anyone's control", which just helps maintain status quo.
> ...or technically isn't possible in the US without any evidence of such.
Most of the times it comes down to constitutional issues in which case they are technically not possible.
Case in hand; the federal government has no constitutional right to prevent the states from collecting taxes -- which would be required for there to be one official Collector of Taxes for all the states.
> "Why can't the world be simple?" is "Because the world is complex."
"Because the world is political, and any change will be bitterly fought by those who are impacted to the point of inventing whole national mythologies."
Really now, centralized collection of taxes, even in the face of different local rates, is a standard feature of the civilized world. It works in countries with gun rights, it works in socialist countries, in advanced and poor countries, it's not a cultural aspect.
Perhaps it is used to stop thinking in some other circumstances, but I don't think that's what's happening here. When people make three-sentence internet comments featuring the phrase "Why don't we just", they often appear to have not yet _started_ thinking about the answer to their own question. I think it's fair to prompt them not to outsource all their thinking to the forum.
You can discuss whether or not it's "fair", but it probably won't motivate anyone to start thinking. I think it comes over as the opposite: Obviously I can't grasp the complexity of the whole world, so if that is the prerequisite to proposing any kind of solution to a problem, I might as well give up.
A more useful response would be to give reasons why the "why can't we just" solution wouldn't work. (The GP indeed gave reasons)
What is the purpose of a forum if not discussion and getting (positive or negative) feedback on your views so you can improve them?
I think we have similar hopes for quality discussion in forums. And I certainly agree that a thoughtful response giving reasons why it's not as simple as "why can't we just" is more useful - assuming anyone feels inclined to write that response.
The problem I see is the following. The person who wrote the "why can't we just" has done next to no thinking of his own as to why the situation might be more complicated than his first thought suggests, but it goes beyond that. Someone who writes "why don't we just" is sending the signal that they're emotionally committed to the position that the solution _should_ be simple. If I take a deep breath and write a long, careful reply in response to the short, lazy "why don't we just" post, I'm not only taking on all the burden of thinking about the topic at hand, but there's every risk this will just be thrown back in my face by the poster who wants a shortcut to a simple answer. A "why don't we just" post has a poor chance of leading to a good discussion, and I think there will be overall more beneficial discussion on a forum if they are discouraged.
Some people are intellectually lazy. I think this is because it's easier to feel smarter when you think less. If there's a solution that seems obvious to Mr. A and he assumes everyone who missed it is a bozo, then Mr. A feels like a smart guy. If someone else comes along and starts telling Mr. A that actually it's not so simple, and there are reasons why the "obvious" solution isn't actually a full applicable solution, then Mr. A has to think harder, only to feel less smart as a result. A lot of people resist that. I don't know the full solution of how to inspire such people to start thinking more, but I think some push-back some of the time is part of the answer. A bit like when people come to stack overflow and ask for their homework to be done for them: it's good if they're prodded to try _something_ for themselves. Being "nice" and just doing their homework for them wouldn't be optimal.
Yes, "the world is complex" might not be ideal phrasing if you think it implies someone needs to grasp the entirety of that complexity. But I'm sure the poster who wrote that only meant to encourage Mr "why don't we just" to _start_ considering the complexity of the world.
> The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration
The power of taxation has rested with the federal government since the early 20th century.
This doesn't contradict the parent comment. The Federal Government isn't the single authority on taxes. The 16th amendment grants them the power to lay and collect, but it does not reserve that power exclusively to the Feds.
> The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people
Getting one itemized tax bill and a having a uniform tax code across the US would be so nice. Taxes don't stop at states, there are county, city, and municipality taxes as well. These may apply concurrently with several others depending on where you work and live.
This makes filing taxes a nightmare on top of being horribly inefficient for local governments. The federal government could handle tax collection and refunds for everyone, and come up with a standard set of rules that apply across the US. It makes life easier and more efficient for everyone involved.
That's the Australian approach, where the federal government collects all income taxes (courtesy of some interesting legal maneuvering in WW2) as well as sales taxes, leaving the states only able to collect payroll taxes, land taxes, mining royalties and a few other limited types of revenue.
All sales tax revenue is 100% distributed back to the states - but it's done under a principle of "horizontal fiscal equalisation" (https://www.cgc.gov.au/index.php?option=com_content&view=art...) which means that richer states subsidise poorer states. Income tax is used to cover federal expenditure but also pays for a lot of federal grant money which is paid to the states.
In general, the Australian approach to federalism is a lot more federal-heavy than in the US, and some part of that is driven by how the feds have completely taken over most forms of taxation and thus control all the purse strings.
Shouldn't the fiscal equalisation strategy result in better infrastructure and more incentives for businesses and people to move to smaller states? It seems like the market is focused entirely on Sydney and Melbourne, and it's orders of magnitude more difficult to find a good job elsewhere.
I imagine the answer to that is that it does result in better infrastructure and more incentives to move to smaller states, and if we didn't base our tax policy around HFE then it would be even worse than it is now.
While not a federation or federally instituted, this is exactly how it works in the Netherlands. The central government collects income tax, VAT and social security taxes, etc. The local government (e.g. municipalities mostly, provinces sometimes) get grants and spend it. Example: Healthcare is locally instituted by the municipalities/cities ("gemeenten") while the tax (social securities) are collected nation wide together with income tax. Please note that only the executive part is local.
The municipalities can also levy taxes but usually only on common goods like sewage, water and on home ownership or equivalent for people who rent. The provinces do the same but it is far less than the central government does.
The EU should collect taxes for all the member states and then give it back to them in some equitable fashion. It would certainly stop all the bickering over tax havens and countries not collecting their "fair share".
I'm not sure of the specifics of how the tax money is doled out, but all my income tax and sales tax goes to the federal government, which then divvies it out to the states.
There are additional taxes in some states though, which are collected by the states, such as payroll tax, but I don't see that on my payslip.
UK: local authorities charge a property tax based on the value of homes determined some time ago. The amount raised is insufficient to cover costs so central government provide a 'revenue support grant' to each of the local authorities in the UK country in question. That money comes from income tax which is paid to the central government in the UK.
The formula used to calculate the level of revenue support changes, some would say that the changes are politically based.
My feeling is that, given the robust politics that appears to exist in the US, coupled with what again appears to be frequent recourse to litigation between levels of government, you don't want to go down that route.
It's the approach in Brazil, and it does not work out. States heavily depend on the Federal Government and have to constantly plead for funds. It's a mess, and I guess taking into account the size the of the US, the higher number of states, and a huge difference in their wealth/GDP, the situation will likely repeat itself.
There are anyway US states that are dependent on federal funds: the transfers are just sneakier and less efficient than in places where this is a constitutionally recognized process.
> Why don't we just pay the federal government the entirety of our tax obligation and have them partition it out to the states?
That would give far too much power to a federal government that already far exceeds its constitutional mandate. I suggest the inverse: The federal government should get its funding only from the states. Each state can decide how much to contribute and how to raise the money. That would decentralize power significantly.
Or a failure if you want a functioning government. There's a reason the Articles were thrown out, and the inability of the Federal government to raise revenue so it could actually do stuff was one of the major reasons.
> It was only a failure if you think a strong federal government is a good idea.
No, a stronger federal government was a solution that was proposed (and adopted) for it's manifest failure. It wasn't the idea that a strong federal government was good that led to the belief the Articles had failed, but exactly the reverse.
I wouldn't want it changing every election cycle, so I'd say it should be some combination of population or area. If states want more revenue than that, they they can add other consumption taxes like bridge tolls, sales tax, etc. that is collected at PoS. I just don't like having a complex math problem to do every year.
So what if you have apartments in 3 states, 2 with high taxes, one with none, and 365/3 = 121 2/3. Pick a low tax state that has nice weather in the winter, say Florida. So 123 days in florida, 121 days in NY, 121 days in cali. Then you owe no tax. If you really wanted to screw things up you could pick a 4th state say the us virgin islands just for bureaucratic fun.
This happens all of the time. For example, it is very common to live in NJ and work NYC. In that case, you pay NYC tax, NY and NJ tax and receive credit for your NJ tax based on the NY state tax you pay.
How is the current exceptional focus on taxes a productive policy? Taxes are investment in your (country/locality). While nobody likes the cost of investment, our lives and prosperity and everything else depends on it. And while some investments are worthwhile and some are not (just ask any VC!), to say we should minimize and avoid all investment is, of course, ridiculous. For example, nobody would suggest you minimize investment in your home unless you were leaving soon, or would advice YCombinator to minimize investment in startups unless they simple wanted to close out business now. You can't leave your country (or you must live somewhere) and it's never going out of business, you hope.
Places with low investment (and taxes) in the U.S. and around the world generally have a lower quality of life and don't produce much beyond rent-seeking industries such as fossil fuels. Is the goal to model the U.S. economy on the great successes of places like Alabama,[0] or would it be better to model it on California or New York? Almost all leading industries, as well as education, arts and other things, are in high-investment places like California, New York, Michigan (automobile industry), etc. Successful people from low-investment areas move to high-investment areas to pursue their dreams, for straightforward economic reasons: that is where resources are. Tim Cook, from Mobile Alabama, comes to mind as well as the many entrepreneurs in SV from India. Almost nobody born in SV moves to Mobile to start their business. Smart kids from California go to Berkley, not U of Alabama, because the state has invested in higher education. The smartest kids from Mobile go to Berkley too (or to other leading universities in high-investment places).
Poor countries are a simple example: They invest little out of necessity and their citizens are poorly educated and live harder and shorter lives. Under U.S. tax and investment policy, uniquely among wealthy countries life expectancy for Americans is now decreasing.
[0] My apologies to Alabamans for using their state as a simplistic example of low-investment government. Of course there is much more to Alabama than that, and it's much more complicated than a simple number or stereotype.
I could believe the first. Income taxes became high in California only after Proposition 13. New York on the other hand has been the largest US city since the colonial era.
California was booming so hard in the 1950s that within a single decade three MLB teams moved there, two directly from New York City, and California got another as an expansion franchise.
This was well before Silicon Valley was anything, well before the "traitorous eight". California's economy was growing like topsy from before the early Hollywood days in the 1920s. San Francisco was an immensely wealthy city before then, because of the gold rush.
Even today California's economy is so huge that Silicon Valley is only a small slice of it.
> While nobody likes the cost of investment, our lives and prosperity and everything else depends on it.
Yes, taxes are an investment. In the same way that putting money in your savings account is also an investment. But I wouldn't recommend that anyone keep all their money in a savings account.
Every dollar that the state takes away from people, in order to invest in itself, that is one less dollar that each person has to decide how THEY would want that dollar to be invested.
So higher taxes is not higher investment. It is a reduction in private investment, in exchange for a increase in public investment. Whether the world needs more private or more public investment is a matter of debate.
> For example, nobody would suggest you minimize investment in your home unless you were leaving soon
Well, that depends. If my choice is between paying off my credit cards, or investing in my house, I certainly believe that paying off my credit cards would be a better investment. Every dollar that I personally invest in my home is one less dollar that I am able to invest elsewhere. And those other investments may be a more pressing concern. Or they might not.
Also, even IF it is "proved" that a public investment has better returns than a private one, you also need to take into account that you are taking money from someone else, and there are moral questions about how much money we should be taking from other people.
I believe that it is OK to take some money from people, but certainly not all of it, regardless of how much better the public investment is. What that level should be is matter of debate.
To take it to the extreme, even IF the government had some amazing investment that was better than all private investments, I would STILL oppose it if the government decided to take a full 100% of money from everyone.
This is because I believe in private property, and that people are entitled to at least SOME of the profits of their efforts.
> Every dollar that the state takes away from people, in order to invest in itself, that is one less dollar that each person has to decide how THEY would want that dollar to be invested.
Indeed - because it's not necessarily an investment for one's own maximum gain - it's an investment in communal infrastructure where, yes, others might profit more from than you. However, in return, you might also profit from the contributions of others.
> Also, even IF it is "proved" that a public investment has better returns than a private one, you also need to take into account that you are taking money from someone else, and there are moral questions about how much money we should be taking from other people.
If we're starting with moral questions we should also discuss how morally justifiable it is to raise the price on products which buyers absolutely need but where they don't have an alternative. (E.g., recent pharmaceutical price hikes). This seems just as well "taking money from other people", except that it's done without any justification at all and, unlike taxes, you don't even in theory have any say about how high the prices should go or how the money is spent.
> I believe that it is OK to take some money from people, but certainly not all of it
My example of taking 100% of people's money is an extreme example that demonstrates the moral dilemma of taking other people money, regardless of how good the investment is.
The OP phrased taxes as an investment, similar to how one would "invest in their home".
And the comparison is not exactly valid. When I think of "investing", I think of taking my own money and putting it somewhere, not taking other people's money.
> Indeed - because it's not necessarily an investment for one's own maximum gain
Or maybe it doesn't maximize anything. Maybe other people are able to invest it better. Just because something is an investment, doesn't mean it is the BEST investment for society. And you always have to take into account that this "investment" is taking away money from other people, who might very well be doing something better for the world with it.
> When I think of "investing", I think of taking my own money and putting it somewhere, not taking other people's money.
I think you make good points, but I disagree here: Almost all investing involves pooling money with others, including all banking, most business, and almost all financial instruments. When you buy your own house, unless you pay cash you borrow from the bank, which involves money from the bank's other customers being invested in your house.
"My example of taking 100% of people's money is an extreme example that demonstrates the moral dilemma of taking other people money, regardless of how good the investment is."
No, it's an absolutely ludicrous statement that makes people no longer pay attention to you.
> Indeed - because it's not necessarily an investment for one's own maximum gain - it's an investment in communal infrastructure where, yes, others might profit more from than you. However, in return, you might also profit from the contributions of others.
You're assuming that tax money centrally invested will yield more returns to the community as a whole than it would were it invested by each individual. We've got decades of research to demonstrate that's not true.
We probably need to fund some services communally, despite some of the enthusiastic & interesting proposals of anarchists like David Friedman. We may also need to investigate some form of universal basic income so that everyone has enough money to spend & invest as he desires. We probably also need to have some sort of information safety net to prevent parasitic 'investment' opportunities.
But in general, a single centralised entity just doesn't have the information to make wise decisions about the utility of all investments across all citizens.
More investment is not a uniformly good thing, any more than increased consumption is uniformly beneficial. Not only does it matter what you invest in—and government does not exactly have a stellar track record when it comes to choosing investments so as to maximize ROI—there is also a balance to be struck between investment and consumption. Favoring either one over the other through political means moves us away from the optimum balance, and over-investment (and malinvestment) can be just as destructive as over-consumption.
Poor countries are actually a great example. Vietnam for instance is an extremely poor nation. Their parity adjusted GDP/capita is $6,925. It's $2,305 nominal. They end up spending a paltry $450/capita party adjusted on education [2]. In the US we proudly spend $3,455/capita - upwards of 700% more. [1] This is a listing of nations in academic performance by PISA results. [2] This is a list of countries by how much they spend on education, if you'd like to compare other nations. Vietnam is not a single outlier.
Vietnam is currently scoring 22nd in the world on math, and 7th in the world on science. The US is 41st on Math, 24th on science. And we spend more to anywhere in the world, excepting 3 nations, on education. You'll find Vietnam is not alone in this peculiar aspect. The correlation between government spending on education and educational performance is not particularly good. And people still think we need to substantially increase educational spending. This is really one of the fundamental problems with government. Everything is seen through the lens of money. Is something not performing well? You can solve it by just throwing more money at it! Of course this is not true. The spending tends to be wasteful at best, and completely ineffective at worst.
The point I'm getting at here is that as you see these sort of results of spending across the range of government fields, being asked to give them large sums of your money to continue spending is one reason people can grow discouraged when being forced to give this government so much of their money. Or consider our completely pointless wars. The total cost for the Iraq war alone is going to end up in the trillions of dollars. And on top of all of this it seems that no matter how much the government increases their gross receipts, they still manage to dive ever deeper into debt. Again, that's not particularly encouraging.
It is silly to compare the absolute expenses for education in different countries, you have to somehow normalize for example the teachers wages with respect to the purchasing power, since it is much cheaper to live in Vietnam compared to the US in absolute numbers. That is not to say that most likely something cultural leads to the poor performance of US high school education.
According to J.Simons (Fields medalist turned hedge Fond billionaire) especially in STEM fields Schools compete with tech companies for talent and can only offer much worse compensation.
The other thing is that in the 50-70ties the number of people that studied in preparation for and went to college was somewhere between 8-15% (continuously rising) it is much easier to teach smart students with few good teachers than to prepare basically everyone for college.
In Germany my parents almost exclusively had PhDs as their teachers, now 60% of all students prepare for university and we have a shortfall of ~20000 teachers with half of the STEM education majors going to industry.
To ensure there's no fundamental confusion, the terms you're talking about are "nominal" and "parity adjusted", which are what I gave. Nominal is the "absolute" cost of something. Parity is the adjusted value after compensating for how much things cost in a given region. You seem to be proposing that perhaps teachers in Vietnam are paid well relative to other jobs in Vietnam. This is not the case. A fairly recent government study indicated that some 50% [1] of teachers regret deciding to teach as a career, with the article going into detail on the lifestyle of a teacher - which is horrible, in large part due to dreadfully low compensation. PISA measures the performance of 15 year old students, so that is another topic altogether.
This is why Vietnam is such an interesting case study. Like many things, our spending is driven more by intuition than data. And Vietnam shows that our intuition on successful educational outcomes is pretty much useless.
Given that education expenditure is mostly local (rather than, say, paying for imported commodities) there is little reason to compare dollar amounts.
> This is really one of the fundamental problems with government. Everything is seen through the lens of money.
That is the problem with government? I'd say this is the problem with a culture that sees everything outside the most personal through an economic lens. Government is not the exception here.
See [1] for a response on relative dollar comparisons.
To elaborate on what I mean by seeing things through an economic lens, imagine you see a problem that you need to fix. As this problem directly affects you, you're going to make sure that what you're doing is extremely likely to lead to a solution. And since you're also personally paying for it, you're going to keep costs as low as you possibly can. Your focus is on the solution and on minimizing costs. When government, high level or federal government in particular, solves problems they're taking on issues that frequently do not directly affect them. And they're spending other peoples' money. This leads to a rather broken system of motivations. Whether the prices involved are reasonable, or whether it's likely to lead to productive outcomes are not as important. Instead only the spending of money is seen as their action and role.
I think an interesting 'parable' for government spending is Alaska. Like you may know Alaska is the only state with something like a basic income. They have their permanent fund [2] which each year pays out a substantial dividend to every single man, woman, and child living in the state. It reached as high as $2,700 in 2018 'kind of', but where did it come from? Massive oil reserves were confirmed in Alaska in the late 60s and the state immediately set to leasing access to these fields. It resulted in a great windfall of money like nothing before or since. And what happened to the state as a result of the newly enriched government? Well... not much. Somehow the government managed to waste all their new revenue without much of anything to show for it.
Outrage within the state is what led then to the creation of the Alaska Permanent Fund. It is a privately managed fund which receives and invests a certain amount of money from all oil revenue and then distributes those profits back to society. The euphemism for its purpose is to 'ensure future generations will have access to the wealth long after the oil reserves are gone.' In reality, it's about letting society actually have access to the wealth created from the natural resources of their state instead of letting the government waste it all.
That alone is perhaps an interesting tale, but I think the most recent years are what really make the point. In recent years Alaska's government has been running their state into a dangerous deficit. Rather than adjusting their spending or trying to trim down waste or excess, they've turned to plundering dividends. I mentioned that $2,700 in 2018 as 'kind of'. The reason is that the state instead decided to make it $1,600 - effectively and legally stealing $1,100 from each man, woman, and child because they can't responsibly manage their own spending. Perhaps the dangers of having such a program in government control to start with.
I have absolutely 0 problems with some fair portion of my money being used as a means to help better society as a whole. But government does not really seem to be a body capable of achieving this end. And the problem, as I see it, is that government is more interested in throwing money at problems rather than ensuring that those problems are solved. I think the physically closer we get to problems (federal < state < county < city < distict < community < family < individual) the more likely problems are to be solved effectively, efficiently, and rapidly.
I think you may be conflating the directionality of success and "high-investment", to use your terminology. "High-investment" government tends to follow domestic success, not vice versa. For instance California is a phenomenally clear example of this. I assume you know what the San Francisco 49ers are named after?
It was the California gold rush of 1848-1855. 49ers was a slang term for the miners. This gold rush created San Francisco. In 1846 California was a backwoods settlement of 200 people. In 1842, its population was 36,000 and it was booming as the primary port on the way to the gold rushes. California was the only state that was granted statehood (which happened in 1850) without first being a territory as the US raced to lay claim to its riches and successes. The Comstock Lode (silver's not quite as exciting as gold I guess) discovered in Nevada would further grow the city.
Even getting down to Berkeley. The university was founded in 1869. You know all those Phoebe Hearst references around the campus? She was a huge early donor that helped really develop the college. And the money? She was the wife of George Hearst, who struck it rich during the gold/silver rushes. The cities (and state for that matter) were built from the ground up by the people, for the people. "High-investment" government only came much later.
The entire Silicon Valley boom, through today, is under 'high-investment'
> The cities (and state for that matter) were built from the ground up by the people, for the people. "High-investment" government only came much later.
Democratic government is "by the people, for the people";. That was Abraham Lincoln's original quote: "government of the people, by the people, for the people". It's the people making decisions and investing in their community, fairly and democratically, instead of an aristocracy / oligarchy of a few wealthy people making the decisions.
I wouldn't say "no problems." I've been through a New York State residency audit and it was protracted, stressful, intrusive, and expensive (for representation -- worth every penny), even though I had indeed really moved (long before the audit and not specifically for tax reasons), had loads of evidence to that effect, and was confident I would prevail in the end. (I did.) It was very unpleasant having it hanging over me for the better part of a year and I definitely thought of it as a major problem, perhaps the major problem in my life at the time, until it was resolved.
This definitely gives me pause when considering moving to a high tax state like NY. It sounds like the kind of state where you pay your taxes and just hope the government leaves you alone, which is likely untrue if you are or become a high earner.
This kind of stuff will likely be litigated for years, especially as people with means are being harassed in this way. It will be interesting to see which of these tactics ultimately pass muster. I wonder if you could bring a RICO suite.
You're buying into a lot of FUD here, there are more high earners in New York and California than many other states and very few have the kinds of problems you're describing.
People being harassed because they moved out of state is not FUD. Its abuse, and it definitely happens.
Why would I move to a state and have a career there if I know at the end of my career I'll be at peak earnings and at that time want to move elsewhere for retirement or pre-retirement? Many people in my state move at that time to other states for tax reasons or cost of living reasons. They know they won't be able to afford to live in the high priced state when their earnings drop.
I know of at least one person who's in the process of moving to FL, and they received legal advice to save all receipts and other evidence. The only reason they received this advice is due to the widespread abuse by the state.
>It sounds like the kind of state where you pay your taxes and just hope the government leaves you alone,
That has much more to due with how the people and the government believe government should act than it does with the taxes themselves. ME and VT are fairly high tax but politicians would be hanging from bridges (edit: it should be obvious that this is an exaggeration) if the ME or VT government tried to behave like the NY or MA government because the people simply don't see that sort of government style as how things should be and the government is a large organization made up of people.
Yeah I thought this too until I ran afoul of things. Right before SoL expired my old state said I owed them for 3 years of taxes going back 5 years previous.
At that point I no longer had much documented proof I had really (legitimately) moved - since I had moved back to original state by then. Sworn statements from employers/colleagues/etc. weren't enough, and to fight it would have cost more than the amount "due".
In the end I paid it, with the state tax representative even outright stating "I might even believe you, but it's going to cost you more to fight us in court over it than just paying". And right he was.
I learned some lessons about record keeping - but the fact I needed to "prove my innocence" vs. the other way around was absurd.
Didn't you pay rent/have a landlord, forward your address, or pay utilities/taxes in your new state? Sworn statements are next to useless, but how did you manage to get into a place where you couldn't produce those types of records? I moved between states (for a bonus, moving out of a notoriously high tax state) and never had a thousandth of the issues you describe.
None of those are considered evidence that you've lost state residency (otherwise a second home would be sufficient for New Yorkers to avoid taxes). I'm currently preparing to move out of New York temporarily, and the advice from my tax advisor is to use a credit card or make a call from a cell phone at least every 3 days, and hold on to the credit card statements/cell phone records. The odds that I will be audited upon returning seem to be somewhere north of 90%, and New York is of the opinion that you are a resident unless you can prove otherwise.
What your tax advisor suggested is even less relevant than a apartment rental agreement, as you can make calls and use credit cards on vacation...
What is evidence of change of residency is change of voter registration and acquiring a driver's license in your new state of residence. Coupled with proof of a non-New York address, it shifts the burden to NY to prove that you are no longer one of their residents.
> since I had moved back to original state by then
In NY if you leave the state and come back, legally your domicile never changed. Change of voter registration and driver's license are explicitly called out as not being relevant to the question of domicile.
If your domicile is in NY, you have to follow a much stricter test to avoid residency status in those years you were gone. Its a complicated set of rules, but at minimum you have to prove you spent fewer than 90 days in a 1.5 year period or 30 days in a 1 year period in NY state. This is when the proof of where you physically were each day is relevant.
Yep, basically this. I had naively assumed a drivers license and address change (along with utility bill) would suffice. I was exceedingly wrong.
My situation was I moved out of my home state for about 3 years, and moved back. About a year (or two? been a bit) after I was back the past-due bill came.
I will also say that due to those actions I made it a life plan to leave this state permanently as soon as my kid is in college. I will not give another dime to them willingly if I can help it.
Edit: And just in case this is helpful to someone. I was "double taxed" by both states, but since these states had an agreement between them I was able to deduct the state taxes of the first state, and simply pay the difference. The difference wasn't extremely substantial, but 3 years of taxes plus 5 years of penalties/interest gets rather absurd quickly - where those fees end up being well over half of the total bill due.
Ah gotcha. You are talking about something different--leaving NY and then coming back, which is why domicile matters. Domicile is roughly defined as the place you intend to return to, so if you leave NY and then come back later, domicile isn't treated as changing because you came back you're implicitly assumed to have intended to return all along.
I'm talking about leaving NY permanently (excepting vacation trips) then change in voter registration and driver's license was sufficient to establish change of residency, and I say this based on actual experience with the NY tax dept for a client.
Yes, I agree that leaving NY permanently is a different situation. But this thread was explicitly about leaving temporarily before either you or I posted in it, so your post telling me I was wrong was at best a non-sequitur.
I'm kind of curious how much data they're mining though, obviously they need fine-grained details to figure out someone is spending too much time in the state to have "renounced" their citizenship so they must have at least individual credit card transactions and (possibly) cell phone location data.
“Taxes are generally subject to a three-year statute of limitations from when a return is filed, but taxpayers who start spending more time in New York even years after they’ve made a move -- like around the birth of a grandchild -- may come to auditors’ attention and be forced to provide evidence of a move that happened a decade or more in the past.”
Why? Because they still "work" in NY State but live elsewhere? I mean, for me, it was simple as pie--in 1997, I moved the hell out, brought all my shit in UHaul down to North Carolina, filled out an income tax form the following year, and then I was fucking done with NY State forever. Granted I wasn't still trying to earn income there. I changed all my bank accounts and everything.
I love Upstate NY geographically, but I hate the government there with a passion. Bunch of idiots. I also hate NYC for imposing its will on the rest of the people in that state.
I think the implication was "cryptocurrency cannot be subpoenaed by tax authorities when you are engaged in fiscal evasion".
This is certainly true, with an off-shore debit card linked to a crypto wallet one can evade most local taxes, while being exceptionally hard to trace down, unless engaging in conspicuous consumption.
You are correct. Under the present regulation they are just an asset, not a currency. So when you trade BTC is not the same as trading GBP, is that the only difference? Is taxation different in both cases?
I had this problem between Ohio and Kentucky about 10 years ago: I moved from Ohio to Kentucky, and they both considered me living in their state for the entire year.
I gave up trying to fight it after about 5 years (!!) and just paid the $15K to the Commonwealth of Kentucky and moved on with my life.
I now live in Florida -- legally and physically -- and don't have to deal with the headache of this crazy state income tax drama.
Are they so backwards they don't have a simple form to fill out if that is the case? e.g. in my state you file an additional schedule [0] to get exempted from state income tax for the part of the year you were no longer a resident.
What's backwards about that? It's a genius way for both state governments to squeeze a little more money out of people, while being able to write it off as a "mistake" if anyone complains too loudly. Real backwardness would be giving citizens a way to pay less money.
I'm sure they have a simple form to fill out, but it does not prevent the state from coming back and claiming they are owed $X in additional income taxes - prove that you do not.
This 'audit' has been happening in states with lots of mobile high earners (CA and NYS) for awhile. Other states are catching on, and now doing the same.
I've left Kentucky twice and in each case when I moved in or out there was no confusion about partial months. Not sure what happened in your case but I can tell you that is not normal. I've only ever paid taxes for the months I resided in the state.
Yes, in the rest of the country where taxes are “low” states and municipalities either sacrifice services we take for granted or believe industry will self regulate. So there are no things Like garbage collection, paying teachers a good wage , reviewing the text books schools teach with to insure the are not packed with lies . Keeping emergency services operating 24/7 , insuring hospitals are staffed and open , running public institutions of higher learning for the benefit of the public (according to the actual concept of not for profit, not scamming the government) . Going after white collar crime and properly regulating various industries to prevent owners and operators from cutting corners and building unsafe , dangerous or otherwise unwanted structures, products and food . Yes running a state takes money , pretending that this stuff is only for the poor folk and doing none of it is cheap and easy .
I don't know why anyone would want to appear to leave. Just leave. The property taxes are ridiculous, infrastructure is falling apart, etc.
On a recent trip back up there you can tell when you hit NYS roads - rusted bridges and crumbling asphalt pock marked with pot holes that can damage your car.
Maybe they should focus on things to make people want to stay?
It would be like a SaaS business changing the contracts so people can't leave (e.g. can't take data) instead of building features that people want.
> On a recent trip back up there you can tell when you hit NYS roads - rusted bridges and crumbling asphalt pock marked with pot holes that can damage your car.
Genuine question: where else in the US are roads better? I've been to several states and some Canadian provinces, and compared to the developed Gulf nations, all of the roads I saw there were like what described.
I was mostly referring to highway roads in poor shape. They were bad in other states but noticeably worse in NY.
Driving up from the south you do notice a "line" sort of where you enter areas that more commonly get snow and the highway degrades a bit but then entering NY seemed like even worse.
I’ve lived in 5 US states with state income taxes ranging from zero percent to merely substantially lower—nevermind a “city tax” that’s in addition and higher that most state taxes—and uniformally the roads and bridges are significantly better than NYS. And then there’s the billions NYC collects annually in fines [0].
Does anyone know the root cause of this? Where does all of the revenue go?
I found a few websites that seem to have repackaged this professor's lecture notes and then found the original.[1] The most unexpected insight was that slow traffic is a big factor. NY and LA definitely have slow traffic compared to most other cities in the US.
Traffic usage. NYC roads are simply used by more people during more parts of the day than pretty much any other city except LA. LA's roads are messed up as a result of the large volume of trucking traffic. As a result, both the roads in NYC and LA need resurfacing more frequently than other locations, but that takes a lot of time and a lot of money, and so in many cases unless the road is really messed up it's not worth it to accelerate maintenance ahead of cycle.
NY state actually maintains its roads pretty well. For a snow belt state they by and large have the best infrastructure with wide shoulders consistently used to minimize damage from plows and heaving. Poorer counties and large cities are less consistently good but the majority of the state's roads are nice. Compared to midwest concrete abominations that are allowed to deteriorate into crumbled messes 20 years past their design life I'll take the continuously improved NY asphalt.
Water doesn't need to freeze to destroy asphalt. Water soaks into the asphalt like a sponge and when vehicles drive over it, cracks form. Those cracks then fill with water and the process repeats.
In NH it varies from town to town. The smaller touristy towns have improved their roads dramatically in the last 10-20 years. Where I live, Epsom, you can tell immediately when you enter either Chichester or Northwood because the highway gets noticeably worse. Not awful, just worse. But overall I'd say NH highways are quite good now.
I agree, I came to NH from MA and was shocked at how nice the roads are in comparison. I'll never understand where MA tax money goes, because it clearly doesn't go to the roads.
I suspect NH puts a lot of money into that stretch of road as a form of advertising. Note that we also put the liquor outlets (and fireworks stores, though privately owned) right there on the border.
This on the money. Newfoundland, for instance, spends a lot of money on roads in some areas, because the road markings are completely scraped off by snowplowing every winter. Whereas Arizona and the Southwest are great for long-term preservation, which is why they put the Airplane Graveyard there.
The highways in and around Phoenix, Arizona have amazing road surfaces. Smooth & quiet driving for miles. I keep hoping someday day California surfaces its highways with the same material. Regular city streets seem pretty much the same.
This. Phoenix highways have the best pavement quality. Good news is that post SB-1 Caltrans is using the same material in CA highways as well - rubberized asphalt. I recently drove from SF to LA and sections of I-5 were recently repaved. Great ride quality
I've actually noticed this a few times. The asphalt around Phoenix is in amazing shape. Most of the road looks relatively new with freshly painted lines.
The people described in this article live in highly manicured NYC suburbs or in Manhattan itself, not some podunk town outside Syracuse. They'll be hard pressed to find a Chappaqua in Florida.
Miami has the highest income inequality [1] in the US, and the ultra pristine neighborhoods you'd expect due to that.
It's also generating jobs faster than almost anywhere else, with virtually every neighborhood getting better. That's more due to Latin American immigration than taxes though.
>It's also generating jobs faster than almost anywhere else, with virtually every neighborhood getting better. That's more due to Latin American immigration than taxes though.
Well also due to the flow of rich people (specifically flow of new ones, not just their presence) adding money. Rich people overpay a developer for a house some of which trickles down to the plumbers who go out to dinner and tip the waitstaff. It's like a tourist town with no off-season. Trickle down economics works quite well on a local level (e.g. every boom town ever for the duration of the boom) so long as you don't do something crazy like prevent new housing from being built.
So true, but many of the wealthy newcomers do come from Latin America, and the condo towers flying up are funded by Latin American investors for the most part.
Interesting place, weathered the recession well and maybe the next.
But if you are already out of state? They surely need to file a motion to garnish wages, which pretty much proves you are no longer a resident. Good luck attempting to garnish wages three states away.
I believe It doesn’t work that way. Executive action generally does not require filing things with the courts. They simply issue an administrative order, and the private parties especially the banks simply comply. Yes, you can initiate a court action to fight it.
The facts on the ground demonstrate that whatever you think about what proves what, and how hard it would be to garnish wages three states away, that isn't how things happen.
Rich, sophisticated people with good lawyers can and do have a big hassle convincing New York tax collectors that they are no longer residents.
If it was just as easy is disappearing, these people would do it. They spend tens of thousands of dollars (if not more) convincing New York that they aren't residents. If they could do it more cheaply, they would.
And if the facts on the ground don't match your theory, then your theory is wrong.
New York is also aggressive about collecting taxes from remote employees. If you work for a NY-based company, but live in another state, you most likely have to pay NYS income taxes. Depending on how your _actual_ home state deals with things, you might end up double-taxed.
To be fair, the MTA has largely been NYS's piggy bank for decades. That's why it's gotten this bad; it's being used to subsidize all the services upstate that don't generate any revenue.
I mean, yes, but part of the reason why it runs at a loss is because how it subsidizes the rest of the state. For example, when the MTA wants to issue a bond, it has to pay NYS a bond issuance fee. This has added up to about $105MM since 2006.
If you really decide never to set foot in the filthy dump that is NYC, why do you care about their claim on taxing authority anyways? Can they enforce that across state line?
Not to be pedantic but the article is about NY state, NJ, CT etc. Many people live in NY state but do not live in NYC. Additionally, as the article explains, some people try to live outside of the state for over half the year in order to avoid paying state taxes. Presumably, there are considerable financial and personal incentives for maintaining some presence in NY state. So, the answer to your question is yes because the people in question are still typically maintaining a residence in a high tax state.
People aren't moving because the rich would rather pay a little extra and do what they want.
What I find interesting is that, in following the California real estate market for the last two years in preparation to moving there, there is a drop in demand for high-end housing since the tax law took effect. The combination of higher taxes and lower mortgage deductions has kept a lot of people from buying bigger houses. I've also seen a lot of empty-nesters downsizing.
Interesting. From the perspective of someone already living in California, there has been an increase in demand for high-end houses in SoCal despite the tax law changes. Pricing trends plateaued briefly the first half of the year but half resumed their upward climb, especially in the nice parts of LA.
Pretty interesting. I happen to live in one of those areas where demand has not only held steady but somehow increased since last year--I've received multiple (cash!) offers on my place in the past 3 months and many of my fellow condo owners have had the same experience, but I can definitely see interest rates reducing demand in less desirable neighborhoods.
Interestingly enough, the higher priced homes are the only ones somewhat holding up. "Sales below $500,000 dropped 21 percent on a year-over-year basis, while deals of $500,000 or more fell about 3 percent, marking the first annual decline for that price category in nearly two years,” said LePage. “Home sales of $1 million or more last month rose just a tad – less than 1 percent – from a year earlier following annual gains of between 5 percent and 21 percent over the prior year.”
The article cited higher interest rates. I've talked to other people who say we are in the tenth year of an average 8 year real estate cycle. I think the market is peaking now and will downturn in the near future. But, I think it will be short and shallow consistent with national economic growth.
I don't understand how the effective tax rate in NY can be the same as Ontario, Canada - but here in Canada we have at least healthcare for all citizens that gets paid for out of that. It's not A+ care but it's good, and it covers everyone. And it's like 1/3 of the budget, it's a huge line item.
What the heyzeus are you Americans spending all that tax money on?
More on topic: the same issue exists between US and Canada, and it needs to be sorted. Some ports of entry on the US/Mexico border are not properly set up to process TN visas etc..
Out of the 4 trillion dollars the US Federal government spent in 2016 (the last year we had a full budget), 0.631 trillion of that was for the military. An almost infinitesimal part of the New York state budget is for the state national guard.
In 2016, the US Military Spending was roughly HALF of the Discretionary Spending of the budget, which you are correct, in that it totaled ~1.15 Trillion
Wouldn't that only apply to emergency medicine?
I don't think you can go to the emergency room for something like cancer treatment or physical therapy. However, I could be mistaken.
Was rushed to the ER after a seizure. They did give me a craniotomy, but only after a misdiagnosis... Which made things worse. A dye-injected MRI wasn't an option, being uninsured.
I don't know what Canada's approach to efficiency is, but most levels of public service in the US are quite indifferent to the idea of maximizing the good that can be done with tax revenue.
America as a whole? Social Security, Medicare, Medicaid are 3 mandatory spending programs that make up ~45% of gov't spending. Defense makes up ~15% and is discretionary (albeit also globally projected, though most of which goes to paying soldiers and maintenance/operational costs). [0]
New York? Mostly on healthcare (~22%) and education (~31%). [1]
One interesting thing I didn't know is that the US social security payments (old age pension) is much more generous than in Canada.
Even with fully contributions, the maximum you can receive in Canada is $1,100 per month. In the US, it's $2,800 per month. The US program is much larger than in Canada.
Correct me if I'm wrong but I thought the amount you get in the USA is related to a.) how much you put in b.) how old you are when you elect to start receiving benefits. I am not familiar with the Canadian system - does it differ in this respect?
The US spends more on public healthcare on a per capita basis than we do in Canada, and for that we get full coverage for everyone - the US only gets Medicare/Medicaid and some vet stuff.
Technically speaking the US could wipe out all private healthcare spending, reduce public spending on healthcare and still have enough over to cover everyone with 'adequate' care. Granted, it wouldn't be up to par for what many Americans expect.
Americans pay about 2x for services rendered, though often they are better, they are not 2x better. That said, someone who only has to wait 6 weeks for a hip replacement may consider wanting to pay 2x as opposed to waiting 15 months, as they might have to here in Canada.
In the US about 50% of healthcare is paid by various levels of government. The US spends about twice the percent of GDP on healthcare as most other western countries. So if the US could just figure out how to get similar costs to what Europe has, the US could have a European style government healthcare system without high taxes.
For example in the EU Ward style rooms are common with 5+ beds per room many have 10+, in the US 4 people in the room is bottom level of care where most get 2 people per room
They also have heavy price controls on Drugs, if the US one of the few remaining countries with out them goes down that path Research will suffer as the US funds a huge amount of Drug Related research that the rest of the world gets for far far less investment
There are 100's of other differences in how te US system works different in the US, and US Consumers have come to expect those things.
This is with out getting into the all the problem associated with 3rd party payer systems like the US has where we have "insurance" that is not really insurance but prepaid healthcare.
You forgot: massively more economically efficient.
Despite that I agree quality is a little lower - it's not that much lower. Health outcomes are similar.
In hospital in Montreal, the halls were lined with patients, not enough room, but ... they were doing a big round of a specific surgery (for some common things they line people up and do it factory style one after the next). This might seem uncomfortable, but you get similar outcome at fraction of the cost.
Also - it covers everyone - which is a huge advantage.
One of the most misunderstood issues of how socialized care works is the 'risk' element is removed. If you are messed up - you just go to the hospital. You're not going to go home with a $20K bill for a broken arm. It's an 'existentially' powerful aspect of daily life that is different.
But yes, fully socialized as in Canada is unfair, there needs to be a private outlet.
One of the most misunderstood issue of how private care works is confusing the US System as a private system. It takes the worst aspects of a Private System and the worst aspects of a Socialize system and merges them into the abomination we have today.
I would tend to agree that a Socialized system would be better than the current US system, I however do not agree that a Socialize system is better than a Truly private free market system of care
It would be nice if hospitals had to have a price list and companies were allowed to build them wherever they wanted. That would be a good start. Having at least one big western nation without socialized medicine is probably a good thing for the overall health and improvement of the medical field.
"But with pushes to enact higher and higher and higher taxes specifically TARGETING higher earners... the problem is something that will become more pronounced as those higher taxes will drive more away."
Which pushes, can you cite a few or a trend where the distribution of tax load is shifting? Isn't NYS trying like crazy to lower higher income bracket taxes because the Federal deduction for property taxes was decreased?
242 comments
[ 5.3 ms ] story [ 267 ms ] threadThere is a certain irony, seeing that bar outright dictatorships (China), the US state is and has been the strongest one for over half a century...
That system has been attacked from the beginning and the US is rapidly becoming a nation where government replaces the family as social structure. What is now will not always be - the trend is of far greater importance than momentary status.
Individuals are not able to do any of that when they're stuck working 3 jobs just to get by, or when they go bankrupt due to a simple medical procedure.
Multiple jobs just to get by sounds a lot like today yet plenty of people still grow, learn and create.
2. Several developed countries have "overwhelming taxation", yet quite high economic growth and are among the world's top 10 regarding human development.
3. Developing countries will have to increase their taxation. That's how development works: you get a bigger and more effective state that can offer advanced services reliably.
4. Almost all underdeveloped countries, on the contrary, have weak states that can barely collect taxes.
2. Name some countries - are they growing more than 10%?
3. Increasing taxation is how the strangulation of a population works, so in that sense you are correct. The state always fails. If it didn't, and taxation "worked", we would be living in a utopia.
4. Weak States that cannot enforce taxation are the ones where the population has freedom to grow without onerous tax burdens and corporate protectionism.
A static view of the world assumes taxation is necessary. A nonlinear view recognizes the destruction it causes.
2. Sustained growth at more than 10% is not realistic, especially for developed countries. I'm from a developing country and turning dirt farmers to office workers consistently will grow your economy by 10%. At some point you're going to run out of dirt farmers. This point is moot.
Regarding high, realistic growth (2-3%) for developed countries: Singapore, Sweden.
3. States tend to fail far more often due to external factors. In the modern era that's becoming rarer and rarer as the cost of destabilizing a foreign state generally outweighs the benefits.
4. I'd be very happy if you could show me some examples. Which "weak states" are developed states? I wouldn't call any state in a developed country a "weak state".
3. Yes, most states are not part of the core; peripheral nations fail long before the foundation does. Thankfully the cost of such failure has become much less likely to result in loss of life.
4. Not weak states that are developed states - ones that are considered developing, yet experience growth largely due to lack of excessive taxation and regulation thanks to weak government. They are thus progressing toward becoming developed. Two examples are Georgia and Puerto Rico - the amount of growth and development in those locations are proportionally far greater than other nations in similar locations and situations. This is directly affected by investment capital, much of which has left high-tax jurisdictions.
Which country are you from?
3. I'm an optimist, I don't see any signs of the foundation falling. The counterargument is that the fall is rarely seen ahead of time. Still, I think we can just file this as a difference in perspective and call it a day :)
4. Georgia, the state, I assume? Assuming it's the state, ok. But how come the vast majority of high-flyers still don't move to these states? How come those "oppressive" taxation regimes keep producing heavy hitters? Same thing is happening in Europe. Sweden, Norway, Germany, France, the UK, etc. have high productivity and high taxation. You'd expect everything to leak over to the low taxation countries. Yet these countries to lose a percentage of the high productivity members but come up with new ones. There must be something at work here (such as high taxation, coupled with half-decent administration, creating a good overall environment for productivity).
Romania. Not sure it's relevant :)
3. The larger the trend, the easier to forecast. Historically, empires fail slowly and then enter a rapid final decline. Martin Armstrong may be of interest, as he has built an extensive database and system that has analyzed the set.
4. Georgia the country, although the US state is one that is doing better than others[1] in the nation. Residence is sticky since it's expensive to relocate, so the incentive to move must be particularly high. There are certainly perceptions that persist with a lag since a practical perspective depends heavily upon direct experience, e.g. NYC is not the same place depicted in movies from the 1980s. The magnitude of resources available to be redistributed within a highly dynamic system can be significant. It is almost impossible to pinpoint the exact breaking point but the trend can be much more easily observed.
Turkey is an interesting place - domestic production includes almost everything except higher technology, yet the economy is precarious due capital fearing the government.
Romania is on my travel list :)
[1] https://www.businessinsider.com/san-francisco-bay-area-resid...
What I'd personally favor is super high income tax brackets for the very rich (income > $1 billion puts you in a 95% tax bracket for everything above 1 billion) and the state getting a percentage of a corporation automatically after it goes above a certain scale (say 5% at 1 billion, 20% at 20 billion), with the restriction on the state's share usage. This should take care indirectly of the "robot production", via the owners. Once you'd do this universal basic income would be interesting.
This should only be implemented if there's some sort of global tax agreement, otherwise the state that does this will have its tax revenue slither away to other countries.
But this needs an attitude of "fixing the state", not "starving the beast". Treat the state as an unavoidable single point of failure and harden it. Checks and balances, more transparency, more direct democracy, etc.
3 & 4. This is already getting super philosophical. I need to follow this phenomenon more, can't really say anything super relevant. Intuitively I'm not sure I agree.
> Romania is on my travel list :)
Go to Bucharest for the night life (preferably with a somewhat reliable local guide). Go to Brașov, Sighișoara, Sibiu for the medieval monuments and buildings. Go to Bucovina for the great landscapes and the beautiful monasteries. Go to Maramureș for the same reasons, but with a different twist. Go to the Apuseni for the rural life, unchanged since centuries.
Avoid the Black Sea (Constanța, Mamaia), except for the Danube Delta, which is a nature reserve.
Thanks for the recommendations!
You value work too much, if anything.
One's economy tends to do well when one has intact factories & workforce while the rest of the civilised world has been levelled and much of its workforce slain. We'll never see something like the post-war boom again unless we see something as utterly, senselessly destructive as the war itself (note that the economy would ultimately have been better in the long term had there never been a war).
https://en.wikipedia.org/wiki/Church_tax#Germany
Much like signing up for Netflix, except more expensive and a slightly different collection mechanism.
And if you think that's weird, look at the British "Chancel repair liability"
It was particularly bad until recently, as the obligations were often hidden. They no longer are - if there's an obligation it's right there on the land register, just like covenants, and show up in the standard searches during the conveyancing process. It's effectively a land tax to support a local amenity -- churches are part of the cultural background of British villages. I'd rather a formal land tax system to support all local amenities.
A larger concern to me are faith schools.
Of course, as mentioned, you can not have that and just pretend you're not in any of the recognized religious organisations.
The "this problem" that we are talking about here is the problem of the national government handling state taxes in addition to national taxes. For this problem the national government is dealing with states, not individuals, and so it is the number of states that it has to deal with that is the main factor affecting complexity and scaling.
Hence, each state collects levies, fines, rates, stamp duties, privatise public services and various other money grubbing exercises in order to raise capital for themselves so that they can waste/embezzle it according to their whims.
Then there's the problem of disproportionate tax distribution, which most states, particularly WA, seem to raise constantly.
[0] https://en.wikipedia.org/wiki/Constitutional_basis_of_taxati... [1] https://en.wikipedia.org/wiki/Section_90_of_the_Constitution...
The states gave up on the practicalities, but they still have the theoretical power to collect income tax.
Why? Because when the GST was introduced WA'S resource income was counted... During an unprecedented resources boom that has since collapsed. You know what doesn't get counted? Poker machine income, which is substantial in the three Eastern states.
Can it be changed? Technically, yes. Practically is incredibly difficult because no one wants to give up revenue and politicians are worried it'll be electoral suicide, which it may well be.
The fact that the government has proposed anything at all, however anemic, is kinda amazing.
This happens across the US political specturm, whether about their tax system, banking system, gun reform, electoral reform, and many other issues; it's a frequent refrain that the US is so different it can't learn from others.
As a US citizen who is resident elsewhere it is infuriating to watch.
Alternatively, it's a frequent refrain that the U.S. _should_ learn from others, which is e.g. why we should preserve our federal system, electoral system and rights.
I think it's a _good_ thing that the several states are separate sovereigns from the United States, and I think it's a good thing that the states are entirely reliant on the United States for their budgets (and in fact, those places where they are reliant, e.g. the highway budget, have led to anti-federal things like a uniform drinking age, something which is 100% not the business of the United States government).
If the United States looks only inwards, however, there's nobody left to learn from in terms of how to run a Union, since there is only one United States, and its powers and responsibilities are (because of federalism) quite different from those of the states.
It shifts the blame from the current politics which is something people can engage with to "reasons out of anyone's control", which just helps maintain status quo.
Most of the times it comes down to constitutional issues in which case they are technically not possible.
Case in hand; the federal government has no constitutional right to prevent the states from collecting taxes -- which would be required for there to be one official Collector of Taxes for all the states.
"Because the world is political, and any change will be bitterly fought by those who are impacted to the point of inventing whole national mythologies."
Really now, centralized collection of taxes, even in the face of different local rates, is a standard feature of the civilized world. It works in countries with gun rights, it works in socialist countries, in advanced and poor countries, it's not a cultural aspect.
A more useful response would be to give reasons why the "why can't we just" solution wouldn't work. (The GP indeed gave reasons)
What is the purpose of a forum if not discussion and getting (positive or negative) feedback on your views so you can improve them?
The problem I see is the following. The person who wrote the "why can't we just" has done next to no thinking of his own as to why the situation might be more complicated than his first thought suggests, but it goes beyond that. Someone who writes "why don't we just" is sending the signal that they're emotionally committed to the position that the solution _should_ be simple. If I take a deep breath and write a long, careful reply in response to the short, lazy "why don't we just" post, I'm not only taking on all the burden of thinking about the topic at hand, but there's every risk this will just be thrown back in my face by the poster who wants a shortcut to a simple answer. A "why don't we just" post has a poor chance of leading to a good discussion, and I think there will be overall more beneficial discussion on a forum if they are discouraged.
Some people are intellectually lazy. I think this is because it's easier to feel smarter when you think less. If there's a solution that seems obvious to Mr. A and he assumes everyone who missed it is a bozo, then Mr. A feels like a smart guy. If someone else comes along and starts telling Mr. A that actually it's not so simple, and there are reasons why the "obvious" solution isn't actually a full applicable solution, then Mr. A has to think harder, only to feel less smart as a result. A lot of people resist that. I don't know the full solution of how to inspire such people to start thinking more, but I think some push-back some of the time is part of the answer. A bit like when people come to stack overflow and ask for their homework to be done for them: it's good if they're prodded to try _something_ for themselves. Being "nice" and just doing their homework for them wouldn't be optimal.
Yes, "the world is complex" might not be ideal phrasing if you think it implies someone needs to grasp the entirety of that complexity. But I'm sure the poster who wrote that only meant to encourage Mr "why don't we just" to _start_ considering the complexity of the world.
> The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration
The power of taxation has rested with the federal government since the early 20th century.
> The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people
This makes filing taxes a nightmare on top of being horribly inefficient for local governments. The federal government could handle tax collection and refunds for everyone, and come up with a standard set of rules that apply across the US. It makes life easier and more efficient for everyone involved.
All sales tax revenue is 100% distributed back to the states - but it's done under a principle of "horizontal fiscal equalisation" (https://www.cgc.gov.au/index.php?option=com_content&view=art...) which means that richer states subsidise poorer states. Income tax is used to cover federal expenditure but also pays for a lot of federal grant money which is paid to the states.
In general, the Australian approach to federalism is a lot more federal-heavy than in the US, and some part of that is driven by how the feds have completely taken over most forms of taxation and thus control all the purse strings.
The municipalities can also levy taxes but usually only on common goods like sewage, water and on home ownership or equivalent for people who rent. The provinces do the same but it is far less than the central government does.
The EU should collect taxes for all the member states and then give it back to them in some equitable fashion. It would certainly stop all the bickering over tax havens and countries not collecting their "fair share".
I'm not sure of the specifics of how the tax money is doled out, but all my income tax and sales tax goes to the federal government, which then divvies it out to the states.
There are additional taxes in some states though, which are collected by the states, such as payroll tax, but I don't see that on my payslip.
The formula used to calculate the level of revenue support changes, some would say that the changes are politically based.
My feeling is that, given the robust politics that appears to exist in the US, coupled with what again appears to be frequent recourse to litigation between levels of government, you don't want to go down that route.
Or at least the states should have a double taxation treaty (but of course that would make sense so it's not going to be implemented)
That would give far too much power to a federal government that already far exceeds its constitutional mandate. I suggest the inverse: The federal government should get its funding only from the states. Each state can decide how much to contribute and how to raise the money. That would decentralize power significantly.
No, a stronger federal government was a solution that was proposed (and adopted) for it's manifest failure. It wasn't the idea that a strong federal government was good that led to the belief the Articles had failed, but exactly the reverse.
What happens if you spend 73 days in each of 5 states? (OK the 183 day rule in NY specific).
Do you have to pick a state to live in for tax purposes?
Places with low investment (and taxes) in the U.S. and around the world generally have a lower quality of life and don't produce much beyond rent-seeking industries such as fossil fuels. Is the goal to model the U.S. economy on the great successes of places like Alabama,[0] or would it be better to model it on California or New York? Almost all leading industries, as well as education, arts and other things, are in high-investment places like California, New York, Michigan (automobile industry), etc. Successful people from low-investment areas move to high-investment areas to pursue their dreams, for straightforward economic reasons: that is where resources are. Tim Cook, from Mobile Alabama, comes to mind as well as the many entrepreneurs in SV from India. Almost nobody born in SV moves to Mobile to start their business. Smart kids from California go to Berkley, not U of Alabama, because the state has invested in higher education. The smartest kids from Mobile go to Berkley too (or to other leading universities in high-investment places).
Poor countries are a simple example: They invest little out of necessity and their citizens are poorly educated and live harder and shorter lives. Under U.S. tax and investment policy, uniquely among wealthy countries life expectancy for Americans is now decreasing.
[0] My apologies to Alabamans for using their state as a simplistic example of low-investment government. Of course there is much more to Alabama than that, and it's much more complicated than a simple number or stereotype.
EDIT: some clarifications and enhancements
And taxes aren’t an investment, and neither is most government spending. Most government spending is actually diverted to connected insiders.
This was well before Silicon Valley was anything, well before the "traitorous eight". California's economy was growing like topsy from before the early Hollywood days in the 1920s. San Francisco was an immensely wealthy city before then, because of the gold rush.
Even today California's economy is so huge that Silicon Valley is only a small slice of it.
Yes, taxes are an investment. In the same way that putting money in your savings account is also an investment. But I wouldn't recommend that anyone keep all their money in a savings account.
Every dollar that the state takes away from people, in order to invest in itself, that is one less dollar that each person has to decide how THEY would want that dollar to be invested.
So higher taxes is not higher investment. It is a reduction in private investment, in exchange for a increase in public investment. Whether the world needs more private or more public investment is a matter of debate.
> For example, nobody would suggest you minimize investment in your home unless you were leaving soon
Well, that depends. If my choice is between paying off my credit cards, or investing in my house, I certainly believe that paying off my credit cards would be a better investment. Every dollar that I personally invest in my home is one less dollar that I am able to invest elsewhere. And those other investments may be a more pressing concern. Or they might not.
Also, even IF it is "proved" that a public investment has better returns than a private one, you also need to take into account that you are taking money from someone else, and there are moral questions about how much money we should be taking from other people.
I believe that it is OK to take some money from people, but certainly not all of it, regardless of how much better the public investment is. What that level should be is matter of debate.
To take it to the extreme, even IF the government had some amazing investment that was better than all private investments, I would STILL oppose it if the government decided to take a full 100% of money from everyone.
This is because I believe in private property, and that people are entitled to at least SOME of the profits of their efforts.
Indeed - because it's not necessarily an investment for one's own maximum gain - it's an investment in communal infrastructure where, yes, others might profit more from than you. However, in return, you might also profit from the contributions of others.
> Also, even IF it is "proved" that a public investment has better returns than a private one, you also need to take into account that you are taking money from someone else, and there are moral questions about how much money we should be taking from other people.
If we're starting with moral questions we should also discuss how morally justifiable it is to raise the price on products which buyers absolutely need but where they don't have an alternative. (E.g., recent pharmaceutical price hikes). This seems just as well "taking money from other people", except that it's done without any justification at all and, unlike taxes, you don't even in theory have any say about how high the prices should go or how the money is spent.
> I believe that it is OK to take some money from people, but certainly not all of it
Who was even proposing that?
The OP phrased taxes as an investment, similar to how one would "invest in their home".
And the comparison is not exactly valid. When I think of "investing", I think of taking my own money and putting it somewhere, not taking other people's money.
> Indeed - because it's not necessarily an investment for one's own maximum gain
Or maybe it doesn't maximize anything. Maybe other people are able to invest it better. Just because something is an investment, doesn't mean it is the BEST investment for society. And you always have to take into account that this "investment" is taking away money from other people, who might very well be doing something better for the world with it.
I think you make good points, but I disagree here: Almost all investing involves pooling money with others, including all banking, most business, and almost all financial instruments. When you buy your own house, unless you pay cash you borrow from the bank, which involves money from the bank's other customers being invested in your house.
No, it's an absolutely ludicrous statement that makes people no longer pay attention to you.
You're assuming that tax money centrally invested will yield more returns to the community as a whole than it would were it invested by each individual. We've got decades of research to demonstrate that's not true.
We probably need to fund some services communally, despite some of the enthusiastic & interesting proposals of anarchists like David Friedman. We may also need to investigate some form of universal basic income so that everyone has enough money to spend & invest as he desires. We probably also need to have some sort of information safety net to prevent parasitic 'investment' opportunities.
But in general, a single centralised entity just doesn't have the information to make wise decisions about the utility of all investments across all citizens.
I'd be very surprised if any research supported such a blanket statement. Can you cite it?
Non-tax money is not all invested. In fact, Americans have a low savings rate and tend to spend most of their money on consumption.
That's their choice, of course, and doesn't by itself justify government investment. It does create more demand and need for government investment.
Nothing in my post said it was.
> government does not exactly have a stellar track record when it comes to choosing investments so as to maximize ROI
Who does?
Vietnam is currently scoring 22nd in the world on math, and 7th in the world on science. The US is 41st on Math, 24th on science. And we spend more to anywhere in the world, excepting 3 nations, on education. You'll find Vietnam is not alone in this peculiar aspect. The correlation between government spending on education and educational performance is not particularly good. And people still think we need to substantially increase educational spending. This is really one of the fundamental problems with government. Everything is seen through the lens of money. Is something not performing well? You can solve it by just throwing more money at it! Of course this is not true. The spending tends to be wasteful at best, and completely ineffective at worst.
The point I'm getting at here is that as you see these sort of results of spending across the range of government fields, being asked to give them large sums of your money to continue spending is one reason people can grow discouraged when being forced to give this government so much of their money. Or consider our completely pointless wars. The total cost for the Iraq war alone is going to end up in the trillions of dollars. And on top of all of this it seems that no matter how much the government increases their gross receipts, they still manage to dive ever deeper into debt. Again, that's not particularly encouraging.
[1] - http://www.businessinsider.com/pisa-worldwide-ranking-of-mat...
[2] - https://en.wikipedia.org/wiki/List_of_countries_by_spending_...
According to J.Simons (Fields medalist turned hedge Fond billionaire) especially in STEM fields Schools compete with tech companies for talent and can only offer much worse compensation.
The other thing is that in the 50-70ties the number of people that studied in preparation for and went to college was somewhere between 8-15% (continuously rising) it is much easier to teach smart students with few good teachers than to prepare basically everyone for college.
In Germany my parents almost exclusively had PhDs as their teachers, now 60% of all students prepare for university and we have a shortfall of ~20000 teachers with half of the STEM education majors going to industry.
This is why Vietnam is such an interesting case study. Like many things, our spending is driven more by intuition than data. And Vietnam shows that our intuition on successful educational outcomes is pretty much useless.
[1] - http://english.vietnamnet.vn/fms/education/25476/50-percent-...
> This is really one of the fundamental problems with government. Everything is seen through the lens of money.
That is the problem with government? I'd say this is the problem with a culture that sees everything outside the most personal through an economic lens. Government is not the exception here.
To elaborate on what I mean by seeing things through an economic lens, imagine you see a problem that you need to fix. As this problem directly affects you, you're going to make sure that what you're doing is extremely likely to lead to a solution. And since you're also personally paying for it, you're going to keep costs as low as you possibly can. Your focus is on the solution and on minimizing costs. When government, high level or federal government in particular, solves problems they're taking on issues that frequently do not directly affect them. And they're spending other peoples' money. This leads to a rather broken system of motivations. Whether the prices involved are reasonable, or whether it's likely to lead to productive outcomes are not as important. Instead only the spending of money is seen as their action and role.
I think an interesting 'parable' for government spending is Alaska. Like you may know Alaska is the only state with something like a basic income. They have their permanent fund [2] which each year pays out a substantial dividend to every single man, woman, and child living in the state. It reached as high as $2,700 in 2018 'kind of', but where did it come from? Massive oil reserves were confirmed in Alaska in the late 60s and the state immediately set to leasing access to these fields. It resulted in a great windfall of money like nothing before or since. And what happened to the state as a result of the newly enriched government? Well... not much. Somehow the government managed to waste all their new revenue without much of anything to show for it.
Outrage within the state is what led then to the creation of the Alaska Permanent Fund. It is a privately managed fund which receives and invests a certain amount of money from all oil revenue and then distributes those profits back to society. The euphemism for its purpose is to 'ensure future generations will have access to the wealth long after the oil reserves are gone.' In reality, it's about letting society actually have access to the wealth created from the natural resources of their state instead of letting the government waste it all.
That alone is perhaps an interesting tale, but I think the most recent years are what really make the point. In recent years Alaska's government has been running their state into a dangerous deficit. Rather than adjusting their spending or trying to trim down waste or excess, they've turned to plundering dividends. I mentioned that $2,700 in 2018 as 'kind of'. The reason is that the state instead decided to make it $1,600 - effectively and legally stealing $1,100 from each man, woman, and child because they can't responsibly manage their own spending. Perhaps the dangers of having such a program in government control to start with.
I have absolutely 0 problems with some fair portion of my money being used as a means to help better society as a whole. But government does not really seem to be a body capable of achieving this end. And the problem, as I see it, is that government is more interested in throwing money at problems rather than ensuring that those problems are solved. I think the physically closer we get to problems (federal < state < county < city < distict < community < family < individual) the more likely problems are to be solved effectively, efficiently, and rapidly.
[1] - https://news.ycombinator.com/item?id=17600782
[2] - https://en.wikipedia.org/wiki/Alaska_Permanent_Fund
It was the California gold rush of 1848-1855. 49ers was a slang term for the miners. This gold rush created San Francisco. In 1846 California was a backwoods settlement of 200 people. In 1842, its population was 36,000 and it was booming as the primary port on the way to the gold rushes. California was the only state that was granted statehood (which happened in 1850) without first being a territory as the US raced to lay claim to its riches and successes. The Comstock Lode (silver's not quite as exciting as gold I guess) discovered in Nevada would further grow the city.
Even getting down to Berkeley. The university was founded in 1869. You know all those Phoebe Hearst references around the campus? She was a huge early donor that helped really develop the college. And the money? She was the wife of George Hearst, who struck it rich during the gold/silver rushes. The cities (and state for that matter) were built from the ground up by the people, for the people. "High-investment" government only came much later.
> The cities (and state for that matter) were built from the ground up by the people, for the people. "High-investment" government only came much later.
Democratic government is "by the people, for the people";. That was Abraham Lincoln's original quote: "government of the people, by the people, for the people". It's the people making decisions and investing in their community, fairly and democratically, instead of an aristocracy / oligarchy of a few wealthy people making the decisions.
This kind of stuff will likely be litigated for years, especially as people with means are being harassed in this way. It will be interesting to see which of these tactics ultimately pass muster. I wonder if you could bring a RICO suite.
Why would I move to a state and have a career there if I know at the end of my career I'll be at peak earnings and at that time want to move elsewhere for retirement or pre-retirement? Many people in my state move at that time to other states for tax reasons or cost of living reasons. They know they won't be able to afford to live in the high priced state when their earnings drop.
I know of at least one person who's in the process of moving to FL, and they received legal advice to save all receipts and other evidence. The only reason they received this advice is due to the widespread abuse by the state.
Not a NYer, but I
That has much more to due with how the people and the government believe government should act than it does with the taxes themselves. ME and VT are fairly high tax but politicians would be hanging from bridges (edit: it should be obvious that this is an exaggeration) if the ME or VT government tried to behave like the NY or MA government because the people simply don't see that sort of government style as how things should be and the government is a large organization made up of people.
At that point I no longer had much documented proof I had really (legitimately) moved - since I had moved back to original state by then. Sworn statements from employers/colleagues/etc. weren't enough, and to fight it would have cost more than the amount "due".
In the end I paid it, with the state tax representative even outright stating "I might even believe you, but it's going to cost you more to fight us in court over it than just paying". And right he was.
I learned some lessons about record keeping - but the fact I needed to "prove my innocence" vs. the other way around was absurd.
What is evidence of change of residency is change of voter registration and acquiring a driver's license in your new state of residence. Coupled with proof of a non-New York address, it shifts the burden to NY to prove that you are no longer one of their residents.
> since I had moved back to original state by then
In NY if you leave the state and come back, legally your domicile never changed. Change of voter registration and driver's license are explicitly called out as not being relevant to the question of domicile.
If your domicile is in NY, you have to follow a much stricter test to avoid residency status in those years you were gone. Its a complicated set of rules, but at minimum you have to prove you spent fewer than 90 days in a 1.5 year period or 30 days in a 1 year period in NY state. This is when the proof of where you physically were each day is relevant.
My situation was I moved out of my home state for about 3 years, and moved back. About a year (or two? been a bit) after I was back the past-due bill came.
I will also say that due to those actions I made it a life plan to leave this state permanently as soon as my kid is in college. I will not give another dime to them willingly if I can help it.
Edit: And just in case this is helpful to someone. I was "double taxed" by both states, but since these states had an agreement between them I was able to deduct the state taxes of the first state, and simply pay the difference. The difference wasn't extremely substantial, but 3 years of taxes plus 5 years of penalties/interest gets rather absurd quickly - where those fees end up being well over half of the total bill due.
I'm talking about leaving NY permanently (excepting vacation trips) then change in voter registration and driver's license was sufficient to establish change of residency, and I say this based on actual experience with the NY tax dept for a client.
The original title is accurate, it appears hard whether you do it legitimately or not.
I'm kind of curious how much data they're mining though, obviously they need fine-grained details to figure out someone is spending too much time in the state to have "renounced" their citizenship so they must have at least individual credit card transactions and (possibly) cell phone location data.
“Taxes are generally subject to a three-year statute of limitations from when a return is filed, but taxpayers who start spending more time in New York even years after they’ve made a move -- like around the birth of a grandchild -- may come to auditors’ attention and be forced to provide evidence of a move that happened a decade or more in the past.”
I love Upstate NY geographically, but I hate the government there with a passion. Bunch of idiots. I also hate NYC for imposing its will on the rest of the people in that state.
"Spending a day or two a month in a Florida vacation home" is not "uprooting your lives".
This is certainly true, with an off-shore debit card linked to a crypto wallet one can evade most local taxes, while being exceptionally hard to trace down, unless engaging in conspicuous consumption.
This is willful tax evasion. It is a crime for which you go to jail.
I gave up trying to fight it after about 5 years (!!) and just paid the $15K to the Commonwealth of Kentucky and moved on with my life.
I now live in Florida -- legally and physically -- and don't have to deal with the headache of this crazy state income tax drama.
I was honestly just happy to pay it and get it over with.
[0]https://www.maine.gov/revenue/faq/income_faq.html#faq1040_4
This 'audit' has been happening in states with lots of mobile high earners (CA and NYS) for awhile. Other states are catching on, and now doing the same.
On a recent trip back up there you can tell when you hit NYS roads - rusted bridges and crumbling asphalt pock marked with pot holes that can damage your car.
Maybe they should focus on things to make people want to stay?
It would be like a SaaS business changing the contracts so people can't leave (e.g. can't take data) instead of building features that people want.
Genuine question: where else in the US are roads better? I've been to several states and some Canadian provinces, and compared to the developed Gulf nations, all of the roads I saw there were like what described.
Driving up from the south you do notice a "line" sort of where you enter areas that more commonly get snow and the highway degrades a bit but then entering NY seemed like even worse.
I’ve lived in 5 US states with state income taxes ranging from zero percent to merely substantially lower—nevermind a “city tax” that’s in addition and higher that most state taxes—and uniformally the roads and bridges are significantly better than NYS. And then there’s the billions NYC collects annually in fines [0].
Does anyone know the root cause of this? Where does all of the revenue go?
[0] www.dnainfo.com/new-york/20160324/civic-center/new-york-city-collects-record-19-billion-fines-fees.amp
I found a few websites that seem to have repackaged this professor's lecture notes and then found the original.[1] The most unexpected insight was that slow traffic is a big factor. NY and LA definitely have slow traffic compared to most other cities in the US.
[1]: Mathew, Tom V. "Factors affecting pavement design." 3 August 2009. https://www.civil.iitb.ac.in/tvm/1100_LnTse/402_lnTse/plain/... "
I also found this Virginia Tech paper that lists a number of citations that may provide additional insight, https://vtechworks.lib.vt.edu/handle/10919/56449
https://www.citylab.com/transportation/2018/06/dominos-pizza...
The best roads are probably those in the desert.
It's also generating jobs faster than almost anywhere else, with virtually every neighborhood getting better. That's more due to Latin American immigration than taxes though.
https://www.miamiherald.com/news/local/community/miami-dade/...
Well also due to the flow of rich people (specifically flow of new ones, not just their presence) adding money. Rich people overpay a developer for a house some of which trickles down to the plumbers who go out to dinner and tip the waitstaff. It's like a tourist town with no off-season. Trickle down economics works quite well on a local level (e.g. every boom town ever for the duration of the boom) so long as you don't do something crazy like prevent new housing from being built.
Interesting place, weathered the recession well and maybe the next.
Rich, sophisticated people with good lawyers can and do have a big hassle convincing New York tax collectors that they are no longer residents.
If it was just as easy is disappearing, these people would do it. They spend tens of thousands of dollars (if not more) convincing New York that they aren't residents. If they could do it more cheaply, they would.
And if the facts on the ground don't match your theory, then your theory is wrong.
Because they still want to live there, they just don't want to pay for it.
Edit: I have a love/hate relationship with NY and NYC in particular.
The New York Times made an interesting video about it: https://www.youtube.com/watch?v=COLMODzYX7U
What I find interesting is that, in following the California real estate market for the last two years in preparation to moving there, there is a drop in demand for high-end housing since the tax law took effect. The combination of higher taxes and lower mortgage deductions has kept a lot of people from buying bigger houses. I've also seen a lot of empty-nesters downsizing.
Interestingly enough, the higher priced homes are the only ones somewhat holding up. "Sales below $500,000 dropped 21 percent on a year-over-year basis, while deals of $500,000 or more fell about 3 percent, marking the first annual decline for that price category in nearly two years,” said LePage. “Home sales of $1 million or more last month rose just a tad – less than 1 percent – from a year earlier following annual gains of between 5 percent and 21 percent over the prior year.”
https://www.wsj.com/articles/chinese-real-estate-investors-r...
What the heyzeus are you Americans spending all that tax money on?
More on topic: the same issue exists between US and Canada, and it needs to be sorted. Some ports of entry on the US/Mexico border are not properly set up to process TN visas etc..
The Military.
https://en.m.wikipedia.org/wiki/Black_budget
WaPo estimated it was $52.8 billion in 2012.
Was rushed to the ER after a seizure. They did give me a craniotomy, but only after a misdiagnosis... Which made things worse. A dye-injected MRI wasn't an option, being uninsured.
The cost for the "free" care people get that can not pay for Emergency room Care is paid for by the people that can pay
This is why a Halls Cough Drop is $15 ea and other common things are 100x more expensive in a Hospital when billed to a insurance company.
the City, the government, does not pay for this care nor is it paid for by the tax payers
Example in NYC:
https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-...
New York? Mostly on healthcare (~22%) and education (~31%). [1]
[0] https://upload.wikimedia.org/wikipedia/commons/thumb/e/e1/CB... [1] https://openbudget.ny.gov/overview.html
Even with fully contributions, the maximum you can receive in Canada is $1,100 per month. In the US, it's $2,800 per month. The US program is much larger than in Canada.
Technically speaking the US could wipe out all private healthcare spending, reduce public spending on healthcare and still have enough over to cover everyone with 'adequate' care. Granted, it wouldn't be up to par for what many Americans expect.
Americans pay about 2x for services rendered, though often they are better, they are not 2x better. That said, someone who only has to wait 6 weeks for a hip replacement may consider wanting to pay 2x as opposed to waiting 15 months, as they might have to here in Canada.
ETA: Maybe not, given less tax revenue and all. The US healthcare system has a lot of waste and bureaucracy after all.
For example in the EU Ward style rooms are common with 5+ beds per room many have 10+, in the US 4 people in the room is bottom level of care where most get 2 people per room
They also have heavy price controls on Drugs, if the US one of the few remaining countries with out them goes down that path Research will suffer as the US funds a huge amount of Drug Related research that the rest of the world gets for far far less investment
There are 100's of other differences in how te US system works different in the US, and US Consumers have come to expect those things.
This is with out getting into the all the problem associated with 3rd party payer systems like the US has where we have "insurance" that is not really insurance but prepaid healthcare.
You forgot: massively more economically efficient.
Despite that I agree quality is a little lower - it's not that much lower. Health outcomes are similar.
In hospital in Montreal, the halls were lined with patients, not enough room, but ... they were doing a big round of a specific surgery (for some common things they line people up and do it factory style one after the next). This might seem uncomfortable, but you get similar outcome at fraction of the cost.
Also - it covers everyone - which is a huge advantage.
One of the most misunderstood issues of how socialized care works is the 'risk' element is removed. If you are messed up - you just go to the hospital. You're not going to go home with a $20K bill for a broken arm. It's an 'existentially' powerful aspect of daily life that is different.
But yes, fully socialized as in Canada is unfair, there needs to be a private outlet.
I would tend to agree that a Socialized system would be better than the current US system, I however do not agree that a Socialize system is better than a Truly private free market system of care
Which pushes, can you cite a few or a trend where the distribution of tax load is shifting? Isn't NYS trying like crazy to lower higher income bracket taxes because the Federal deduction for property taxes was decreased?