> The potential disparity between the value of personal data and what users receive in return creates space for governments to seek reimbursement on society’s behalf.
Is there a way to leverage competition to reduce this disparity instead of taxation? If there were proper competition, would there be a disparity?
This happens because tech companies are well-equipped to siphon user data at massive scale and have been given the luxury of embedding these services into our daily lives without sufficiently educating the public around their business models. Ultimately, the public has very little control over what these companies do with this data, so there's a perverse mismatch of incentives here.
Tech companies are incentivized to collect user data and not explain how it's used. Tech companies are incentivized to pay lobbyists to discourage the government from placing a market value on data. The public doesn't have that kind of lobbying influence.
There might not ever be proper competition if internet companies are fundamentally winner-take-all monopolies where the more data you have the better you do.
What would competition do in terms of how advertising companies benefit from user data?
I think the point is to start forcing companies into thinking sensitive user data is a liability that is taxed or worse if they do anything "nefarious" with that data (where nefarious could be whatever we think to put in that law).
So it's like asking for Coca-cola to "have competition" (which generally just creates more sugar soda brands) vs taxing sugar.
This is brilliant, I've never thought of it this way.
In a sense, GDPR already kind of does this, increasing the burden of storing user data. Would be interesting to consider dramatically ramp up this burden---maybe with a literal tax---for behavioral data stored longer than 90 days (or some other grace period), like a weaker version of Maciej Ceglowski's Six Fixes. https://idlewords.com/talks/what_happens_next_will_amaze_you...
What does keeping surveillance records of your customers' online activity indefinitely have to do with not treating customers like crap?
Offline businesses now and always don't and have never had indefinite surveillance records of their customer's behavior. Is it your position that offline businesses are incapable of not treating their customers like crap?
Besides which, aggregated data that can't be de-anonymized would be exempted, as described by Maciej Ceglowski. The 90-day limit is only on fine-grained, personally-identifiable behavioral data that isn't explicitly shared (the content of my HN comment should of course be kept forever/until I delete it; but there's no reason to keep the IP address I used, other than aggregate statistics about what cities people access HN from).
Selection bias. HN community tends towards disliking Google/FB, and will tend to show articles that target those kinds of tech giants.
In all honesty, they do have monopolies and it seems that the same type of anti-trust enforcement that was used to help Apple/Google in the browser war against Microsoft just isn't there anymore. Now Google/FB really do have a monopoly on user data.
I think properly regulating instead of just taxing is more useful.
If you have to name more than one company, the companies you've named do not have a monopoly. They can at worst be a duopoly. However, with the existence of Amazon, Microsoft, Twitter, Snapchat, and others, Google/FB are not even really a duopoly.
But you're right that HN is immensely biased against Google and Facebook. That's why you frequently see commenters like yourself make the patently ridiculous claim that they are a monopoly.
The way to tax the corporations is to have a minimum base rate they cannot escape and rules tightened on what qualifies to reduce their rate to that point.
the value of personal data can only be quantified if you can follow the path to its eventual sale. If they are not selling it but using to expand their own presence I have no issue. However buyers should be easy to identify along with the transaction value.
i just find it odd government and some who don't like what these companies put so much value into this data when the vast majority really assign it no value. people willfully give up so much and its not going to change because people want to be noticed more than they want to notice others
How do they manage to pay zero taxes then? I thought AMT assumes that once you're beyond a certain level of income, your lose most deductions and essentially pay a certain percent of the income.
An org that invests all their margin into growth doesn't pay (as much) tax.
The best way though is to create an offshore subsidiary, and then have the subsidiary invoice the main office for "services" or "IP licensing". The invoice becomes a cost and is deducted from revenue. "Everyone" (all the big players) do things like that. It's 100% legal.
Through subsidiary companies and assigning IP rights, they move their income to a low tax country like Ireland. Its kind of like movie studio accounting. Take Ikea for example. It doesn't make much money because all the profits are sent to a charity that owns the Ikea name.
Presumably they are thinking of revenue, that would of course be tricky, and quite apart from that set up an incentive to limit revenue. Just as we've seen profit limited by taxing profit (for example Amazon could be making obscene profits, but chooses not to), we would see revenue limited by taxing revenue. I've no idea what that would look like. Has anyone tried it?
Just as tax rates have an impact on architecture, they also help to shape companies.
Why single out Google and FB or tech in general? Is the belief that these companies pay less taxes than non tech companies? I don’t have the breadth nor depth on this topic, just wanting to learn.
Disproportionately deep pockets and impact. Research the breakup of Standard Oil (which became Exxon, Amoco, Mobil and Chevron) in the US. The power Standard Oil wielded was non-insignificant, as with behemoth tech companies.
While these regulatory actions are surprising to some, if you’re into history it’s no surprise it’s happening again, but to tech instead of oil.
Standard oil had major political influence and the energy companies today still have major political clout. Source: worked for 6 years for a vertically integrated energy company.
It’s not clear how big tech companies have the same political influence. Yes, social media has been manipulated I think to influence outcomes, but do social media companies themselves have that influence over politicians? To be clear, I am not saying you’re wrong. I’m asking a question.
Because politicians attack things perceived as bad by the public. If there's a time to implement such a tax it's after a year of sensationalist (and largely fake) news about FB and Google, from exaggerated data breaches to helping terrorists.
No. I have a database of all news article titles from major Czech Media over the last decade, and there's precisely 2 news about google and data leaks and 2 news about google helping terrorists.
The big tech companies are US-based and haven’t had as much time to build deep political connections like older industries. This makes them a natural target.
The fact that Bloomberg employs people who think minimum wages are a good idea is all I need to know that they are not a credible source for economic policy recommendations.
I have a feeling that this won't work. The only robust way to implement fair tax is to tax corporation 1%, but everyone in EEA has to do it. I know that taxing revenue is not optimal, but how much money corporations spend on gov audits, accounting what is profit and what is cost etc.
Full time AirBnB rentals almost certainly exacerbate any housing shortages that might exist. A tourist in general is willing to pay far more (maybe 5-10x) per night of temporary lodging than a resident is willing/able to pay for 365 days per year. This is especially true in beautiful but inexpensive, tourist magnet cities like Prague, Vienna, Budapest, and the like.
Taking otherwise available rentals off the full-time rental market and moving the "up" the economic return ladder to AirBnB rentals makes the housing situation tighter for residents and would-be residents.
(I'm a happy user of AirBnB platform and am "OK" with the conversion of real estate to its highest and best use, but I understand the opposition argument and think it has some merit.)
Airbnb is highlighting a zoning problem that governments are unwilling to admit to themselves. Sublets and short term rentals existed long before before and most cities on Earth didn't care, but once a frictionless platform came along it suddenly was a problem.
My landlord kicked us out to run an airbnb fulltime after seeing how much a neighbour was earning. (Around New Years /Christmas you could easily bring in 2 months rent). Despite all this I hold no illwill towards Airbnb.
If any other basic need was chronically undersupplied due to government inaction people tend to riot, yet somehow housing gets a free pass.
People say "zoning problem", but should we really solve the problem that 1 in 6 residences in Edinburgh is an airbnb by building skyscrapers in a World Heritage Site? I suppose it would repel the tourists.
Not arresting, yet, but Czech Tax Office is getting data from AirBnB on the hosts, and performing checks based on that, so those that avoid taxes may end up in trouble.
Skyscrapers on the royal mile? No. Sky scrapers in shitty nearby suburbs? Absolutely. In London, the whole Isle of Dogs is being slowly eaten up by high rises, and nothing of value will be lost.
You comment reminds me of what a friend said about Venice.
Venice is as real a city as the Magic Kingdom. Because tourists ate it completely. There have always been tourists going to Venice, but since the jet age so many that all the old families that used to make it their home have been kicked out.
Probably the future is everyone not wealthy gets kicked out and put on the equivalent of an Indian Reservation. Enforced by rents, toll roads and congestion pricing.
It's not a "zoning problem." It's much simpler than that.
* Airbnb flophouses are not obliged to conform to fire, health, or safety codes, and they don't pay taxes. Right off the bat, they're scads cheaper than hotels because they don't bear those costs.
* Visitors and residents have very different incentives. Tourists may wish to stay in cute residential areas, but they are not necessarily interested in being neighborly -- they're not particularly invested in the comfort and safety of the people around them, because they'll be leaving soon.
* People do a lot of gross stuff in a hotel that you probably don't want to encounter in your apartment building. Drugs, prostitution, loud parties.
No amount of "zoning" is going to make the commingling of apartments and hotels attractive to full-time residents, nor will any change in "zoning" make flophouses less profitable.
>No amount of "zoning" is going to make the commingling of apartments and hotels attractive to full-time residents, nor will any change in "zoning" make flophouses less profitable.
In most old cities, hotels, bed and breakfasts, hostels etc all exist in residential areas. And boarding houses used to be common in these same areas too.
> Airbnb flophouses are not obliged to conform to fire, health, or safety codes, and they don't pay taxes. Right off the bat, they're scads cheaper than hotels because they don't bear those costs.
Because Airbnbs aren't flophouses. They're holding usually just a couple or family, maybe a dozen people tops unless the place being rented is a really big detached house. Expecting them to be held to the same standards as hotels is not necessary. If this lack of compliance is so dangerous, then why are letting people live in these places full time?
> Visitors and residents have very different incentives. Tourists may wish to stay in cute residential areas, but they are not necessarily interested in being neighborly -- they're not particularly invested in the comfort and safety of the people around them, because they'll be leaving soon.
Tourists also spend more money while on vacation, especially on small businesses like restaurants and bars. More importantly, they bring this money in externally. More tourism attracts the ire of residents that now have to deal with out-of-town people walking around their neighborhood, but I have rarely seen someone complain about negative economic impact of tourism let alone make a coherent argument about why it's bad.
> People do a lot of gross stuff in a hotel that you probably don't want to encounter in your apartment building. Drugs, prostitution, loud parties.
Plenty of people do these things in their apartments, condos, and houses, too.
> No amount of "zoning" is going to make the commingling of apartments and hotels attractive to full-time residents, nor will any change in "zoning" make flophouses less profitable.
Tourists generally don't want to visit residential areas. Airbnb-ing instead of renting a hotel is usually less convenient because the former are further from the city center. When I used an Airbnb in Iceland it was more of a hassle because I effectively needed to rent a car (and then subsequently park a car) to get to the center of the city. It was worth it because of cost. If there were hotel rooms available at the same cost of Airbnb then I would have used that.
However, the number of hotels is usually kept artificially limited. This drives up the cost of renting hotel rooms, which benefits hoteliers. This is the main reason why Airbnb is so much cheaper than hotels. Hoteliers don't want to build more hotels because that would drive their costs down and their expenses up.
> More tourism attracts the ire of residents that now have to deal with out-of-town people walking around their neighborhood, but I have rarely seen someone complain about negative economic impact of tourism let alone make a coherent argument about why it's bad.
Tourism is an economic curse similar to the curse of resources. It makes most unrelated economic activity less viable.
> Tourism is an economic curse similar to the curse of resources. It makes most unrelated economic activity less viable.
Got any source to back up this claim? Plenty of regions with strong tourism industries have other viable industries. San Francisco, LA, and New York are all heavy tourist destinations but no reasonable person would say that this tourism has made unrelated economic activity less viable. Same with London and Paris. Large tourism industry, but plenty of other industries.
It may be true that as other economic opportunities are exhausted, communities try to use tourism to bring in money to the community (e.g. Leavenwoth, WA https://en.wikipedia.org/wiki/Leavenworth,_Washington). Underdeveloped countries that don't have the ability to participate in many industries lean on tourism more heavily (especially eco-tourism since the lack of development is actually an asset for that industry) which makes tourism take up a larger proportion of their GDP.
But I am highly skeptical of your claim of a causal link between growth of tourism and inability to sustain other industries.
I don't know that it's a negative overall, but in general the most economically lucrative sector of commerce in an area does tend to out-compete the others. Much of Silicon Valley used to be farmland. Tech surely disrupted and ejected many farming uses of that land. Gambling disrupted the previously sleepy area of Las Vegas. Disney disrupted parts of Orlando. The auto industry disrupted much of Detroit.
I think it's generally a good thing overall, but if I were a buggy whip manufacturer around Detroit in 1920, I wasn't as happy with my lot in life 20 years later...
This is more pronounced in underdeveloped areas and especially if the whole country is underdeveloped -- people can't exactly move away to an area with a different major economic force, because all other forces are dwarfed. See this article [0] for more elaboration.
I dont know about the cheap part. When I travel in the US I stay in hotels that normally run about $150/night, and they are usually pretty nice. When I look at comparable AirBnB rentals they are the same price or even more with those cleaning fees.
AirBnB isn't highlighting a zoning problem; rather, it enables ordinary people to engage in frictionless regulation-skirting commerce. Incidentally, Uber does the same thing.
The problem with this is that it makes masses of lawbreakers out of normal people. When suddenly lots of people are breaking the law, and they're not easily treated as an outgroup, the incentives about enforcing the law get complicated.
Only a very small fraction of the people involved actually break the law, but those bad actors are a surprisingly large fraction of the total nights booked through AirBnB, so the company wishes to conceal and defend them.
For instance, renting a room inside your home to visitors, while you continue to occupy the home, is perfectly legal almost everywhere. Often, there is little or no regulation to comply with. (For example, actual BnBs.)
But many, many, many of AirBnB's rentals are illegal flophouses. Entire-apartment rentals inside established buildings, or flophouses with 2-4-6-8 bedrooms rented to unrelated strangers, with a maintenance service that comes by to turn down the beds. Those are where the money are at.
A lot of these places are lacking hotels because we don't want them there.
These are residential areas because we want them to be.
We want the tourists, the traffic, and the mess on the other side of town.
You're sort of acting like just because the market wants something it is right to do so and it's a failing of central planning if it differs in opinion about needs.
AirBnb also makes real estate investments more liquid. You can sell a property on short notice. No need to wait for tenants to move out. That drives speculation and influx of foreign capital.
the uber one is certainly a lie. the simple fact is these companies have money, can very easily be portrayed as the bogeyman, bonus points because they are not companies to country that will tax them, and simply because most of the populace won't care because its not them.
talk to any of the uber drivers where I work, so take it as you will, and many will tell you of passengers who use uber/lyft because the drivers are friendlier, arrive on time, and tend to drive nicer cars. the arrive on time and don't just drive off because you need to go where the taxi won't is very important. and it is people of all income levels using them
"drivers are friendlier, arrive on time, and tend to drive nicer cars", but they also have zero worker protections and dance to whatever tune Uber is playing.
I'm not selfish enough to only think about my comfort, I want those drivers to be able to have some damn job security, because we're in the 21st century, not the dark ages.
I've heard that in Prague due to explosion of AirBnB rentals it's difficult even for software developers to rent reasonably priced apartments. I guess this is a counter reaction meant for a city that hosts >10% of country's population.
Not sure about the situation in Czechia but in Spain (where I live) I'd say most of it is caused by the fact that jobs have moved to the big cities to the point where there's nothing left to do in small/mid-sized towns. Personally I blame shopping centres (which have destroyed most small stores in every town they've settled in, and don't require as many active people) and cheap production in Eastern Europe and China (which has destroyed the secondary sector).
I live in Krakow and I definitely see AirBnb as the culprit. Students are having a much harder finding housing than before. The situation in Europe is somewhat unique in that there's both a large disparity in nominal income and a large disparity in taxation of alcohol. The cost of a beer at a bar varies from €1 to €10. That creates incentive for people to fly out to places like Prague or Tallinn on the weekend just to get plastered. AirBnb, of course, caters specifically to these "tourists". Quality of the accommodation is unimportant when one's completely shitfaced.
The New Yorker had an interesting piece on the effect that Airbnb had in Barcelona[0] recently.
tldr: residential population in the more attractive parts of town have decreased as much as 45% in the last 12 years. Activists staged protests of illegal Airbnb's by renting them, occupying them, and refusing to leave, all while filming their interactions.
At least for my own country, if you buy advertising from Google, you pay 0% VAT because it's not a local purchase. With a local company there's 18% VAT. The local companies are starting the competition at a huge disadvantage.
An even playing field is a healthier market, without megacorps that can run at a loss for decades to crush out any chance competition in a field.
If you do business with VAT registered company from different country, you do not pay VAT upfront with purchase, but you report it at the end of quarter (monthly if you are big enough). You will actually never pay this VAT if you are VAT registered company as you will report it and ask for refund at the same time.
On the the other hand, if you are doing business with local company you pay VAT with payment for service or goods and ask for refund at the end of quarter. Long term cost is same, but it blocks your resources (paid VAT) and it may be difference for some companies.
How is prejudicially taking money directly out of the market "pro-market"? Anti-globalist I'd maybe grant, but since the tax is universal, I think it's pretty globalist as well.
They're in fact assisting in the beginning of an economic war between the US and the EU. These taxes, intentionally and specifically targeting critical US companies, are de facto tariffs. The US will have no choice but to respond in kind.
There's no scenario where Germany doesn't get its export machine hammered with tariffs if the EU broadly goes too far with this. It will drag the EU economy below water into a perma recession (which it has almost been in already since 2007, all the major economies of Europe have seen near zero net GDP expansion for over a decade). Europe is extraordinarily weak, with Brexit and France, as well as the continued residual mess in Spain, Italy, Greece and Portugal from the great recession. Germany is the only thing propping up the EU economic house of cards. And that's what the US will target to break the back of the EU. If I were the US, I'd start with finishing off the collapse of Deutsche Bank (down to a $16b market cap now) and move to decimate their auto industry (conspire with China as it makes sense, we can carve the world in half between superpowers; they'd love to take the place of some of Germany's advanced industry and move up the ladder of development further). Once it's war, it's war. Or you know, the EU could be smart, turn back and stop the targeted assault on the US economy.
If it gets really feisty, just look the other way, Russia will begin rebuilding its empire by consuming parts of Eastern Europe (which it's always desperate to do). That will destabilize an already weakened EU. These countries are either allies of the US, or not. If they are, they will stop attacking the US economy. If they're not, I don't see why the US should be protecting them from Russia with its military power. And there's absolutely nothing the EU can do to stop Russia from taking what it wants in Eastern Europe.
It is important to know, that our ruling party is a populist left wing all the time promising one. So whatever might be proposed might not have enough push to be implemented.
Could SF and other cities like Vanc, BC, Miami, London, etc., levy a significant tax and use that tax to build affordable or subsidized housing to counteract pricing out of the affected people.
So if AB&B are reducing the supply of housing to locals who don’t own, then this tax could be used to build or subsidize housing costs for those who because of the reduced inventory and commensurate price increase can’t afford the housing they were once able to.
AirBnB is not "reducing the supply", they're increasing the demand. The supply is limited, both artificially and naturally, and the demand is growing mostly normally (AirBnB or no).
The local governments get more revenue from high demand (since it increases assessments), and limited supply, so they generally do not have the right incentives to make housing affordable. The public is pretty ignorant in these places, as they should perhaps be allowed to be, so they do not put any pressure on politicians to stop this gambit.
I think that’s two sides of the same coin. If someone’s rent budget meant they had in theory access to say 10% of the units for rent, but AB&B’s additional demand means now their budget only puts 5% of the units available within their range, that effectively reduces their supply (or in other words access).
No, importantly, it does not reduce the supply. If you want to apply terms like this, pay attention to how they are defined.
Access is not supply, and supply is not access.
There is an immense supply of housing in Vancouver, and as much as is possible, AirBnB-facilitated demand (although it's really a tiny fraction of the total demand) puts pressure on the market to increase supply (even if the circumstances make that unlikely to succeed greatly). Whether people living in Vancouver are buying their housing through rental agreements, purchases, or short term rentals like AirBnB, the supply will only tend to increase (just not enough that some of it is "cheap").
For an example of high supply with poor access, just look at the tremendous number of low-quality developments across China with few or no legitimate residents.
Do you mean e-residency (https://e-resident.gov.ee/)? I work there, happy to answer questions if you have them. The value of starting a business in Estonia vs. elsewhere depends on a number of factors - we mainly focus on folks from outside the EU (or citizens of the EU but living outside it) who want an EU based company they can run remotely in English which is tough in some jurisdictions
Ah yes! Pleasantly surprised you'd follow up on here.
Does Estonia offer any anonymity through its e-residency program?
A lot of us have stereotypes towards EU regulations as being restrictive, wonder if you could address this one glaring fear in the back of our minds (ex. GPDR).
What should folks on HN know a thing or two about Estonia? I've literally only heard of the country 4 years ago when I played Arma: Cold War with an Estonian gamer, which ironically is a military simulation of gorilla warfare against a USSR invasion of the Baltics..... (see OF: Resistance)
Haha I'm a big HN reader so I was happy to jump in :) Sorry for the delay, I'm actually on vacation back home (I'm an American from SF)
It depends what you mean by anonymity - if you're just an e-Resident (eg. you've applied for the status and gotten the card) then it's not public to anyone except you and the Estonian government. If you open a business however, then there is a large amount of transparency. Estonia is very very transparent, I can even see things like the age of the owner of a company if I'm so inclined to look it up.
To be honest, I haven't seen much in terms of restrictive policy in Estonia specifically with the exception of banking - Estonia is a small country of just 1.3m and most of the banks are foreign owned. That means there's not much sway we have domestically over policy and it's dictated from outside (mainly from the parent banks in the Nordics) and it can be tough to open a bank account as a foreigner if you don't have strong ties to Estonia. That said, this is getting tighter just about everywhere as banks try to comply with Know Your Customer regulations (however, my impression is that this is mainly brought on by the US rather than the EU and banks are so stringent because they don't want to lose their US dollar payment capabilities from correspondent banks)
There are a lot of interesting things about Estonia - I'll skip the Googleable things and say that from living there the most interesting thing is on one side how closed and yet how open the people are. To give an example, in my apartment complex I don't believe I ever spoke one word to any of my neighbors in a year, but for the people I met via some group activity or was introed by Estonians I knew from work, they are incredibly open and friendly (basically if you don't have a reason to speak with an Estonian they think you're incredibly strange if you try to initiate a conversation, but if there's a reason, they're very friendly people). The other really interesting thing I've found is the Russian/Estonian dynamic. There's still a large Russian minority of people in Estonia from the Soviet days and some communities are not integrated at all, there are constant political debates about forcing schools to only teach in Estonian (there are currently ones that have all Russian courses). So you have a situation where there are people born and raised in Estonia but who don't speak the language and live pretty much only in Russian communities and have a different worldview of many Estonians.
"It has helped malicious actors during the 2016 U.S. presidential election and the Brexit referendum, arguably helping to subvert democratic institutions."
Wow, it seems clear to me that some people only respect democracy when they win. I don't like Brexit but if people in UK vote for it, let them be.
The malicious actors and those that try to subvert democracy are the billionaires that buy Media in order to propagate lies that at the current time remain unproven.
A tax on absolute income is a very dangerous thing in any gobertment. But we already have it, with inflation.
We can do this in Europe because we are great at killing innovation through our taxes and regulations. This way we can safely tax innovative tech giants without hurting our own tech giants. Because they don't exist here.
We don't like that thing that you do. So we'll just apply taxes and let you continue doing the thing we don't like you to do.
A 7% tax on revenues is a 50% tax on a business with a 14% margin. It's even more damaging when one considers start-ups, who run negative profits in their early years. (Seven percent is thus eleven months of runway in the Czech Republic for every 12 months a German competitor gets.)
Seven percent is generally prohibitive to low-gross margin business, e.g. any tech company producing physical devices or doing anything next to retail. It thus compresses an economy's accessible tech sector to enterprise businesses.
If these taxes remain confined to ad-driven businesses, that's a fair tradeoff. But given Europe's penchant for over-encroachment, it could very easily be over-applied.
TL; DR Top-line taxes transfer wealth to high-margin businesses over low-margin businesses and from start-ups to incumbents.
The tax is on revenue, so the thinner your margins, the more extreme the tax. Another reply here says that a 7% revenue tax is a 50% tax on a 14% margin transaction, but it's even worse than that, since the tax is on the whole revenue, including your margins.
Consumption taxes are very difficult to avoid and often very efficient. Especially online.
Income and corporate taxes are so easily manipulated that there's entire industries built around it. Nations should be aiming for efficient taxation sources not ever more complex regulations creating yet another industry sector to simply navigate it.
You say that like "tech giants" are a good thing. The biggest difference doesn't seem to be taxes, but a predatory attitude focused only on their own growth and "to hell with everyone else".
"Tech giants" of the past and present like IBM, AT&T, Microsoft, Facebook, Oracle, Uber, and Amazon are all widely disliked and criticized.
Aside from that there are plenty of European tech companies (ASML, Logitech, Skype, Spotify, just to name a few) the attitudes in Europe tend to be different. Attend one of the Silicon Valley conferences where it's all "we're going to change world!" vs. the German CCC where it's "we're not sure if society as a whole benefits from this technology".
There are probably other reasons too. Silicon valley and that Chinese city I forgot the name of are powerful "tech hubs" where workers, innovators, and investors meet. Europe lacks such a powerful "hub". I suspect the most important reason for this is that "Europe" isn't a single country but dozens of countries. Even in the EU – where you can legally move to another country at a whim – it's not so easy, as you may not speak the language.
This is why the UK probably has more EU immigrants than many other countries, since most people speak some English.
And sure, perhaps taxes can be a factor? I'm unsure of it, and I've never seen it proven, but I am willing to be convinced. Either way, it's certainly a lot more complex than "taxes kill innovation".
> You say that like "tech giants" are a good thing.
What you see is that - if the Czech Republic would have their own tech giants - they wouldn't propose such an aggressive taxation towards it. It's why Germany was against such taxes because they fear repercussions towards their own industry.
> But a predatory attitude focused only on their own growth and "to hell with everyone else".
Such a predatory attitude also gets punished through free market forces. A company like Microsoft got severely punished for their predatory behaviors.
One of my favorite tech giants is 'Robert Bosch Stiftung' from Germany.
> Aside from that there are plenty of European tech companies (ASML, Logitech, Skype, Spotify, just to name a few)
ASML is the meager remnant of the once almighty Philips. Logitech is Swiss. Switzerland indeed does a better job providing a healthy climate for innovation. Skype is owned by Microsoft. Spotify is indeed a lovely company (worth protecting for sure).
> Europe lacks such a powerful "hub".
This is indeed a problem. San Francisco provides an excellent climate that attracts innovation. An important factor was perhaps that there was so much room to grow. The right city at the right time. In Europe most of the land is already accounted or planned for something.
China got to grow so quickly exactly because the government decided to embrace free market forces.
> This is why the UK probably has more EU immigrants than many other countries
Many wealthy people migrated from France to the UK when Hollande proposed his tax plans.
The Czech tech giant would be operating globally. The Czech government would be less inclined to tax foreign tech companies if there exists a risk of foreign countries introducing tax repercussions for your own tech giants.
Then if you apply specific "personal data taxes" they would come on top of the regular taxes already payed by your local tech giant. If such a tech giant would exist.
The way this should be balanced out is by stimulating counter-innovation coming from Europe. Not by taxing innovation coming from foreign countries.
Well if Czechia had their tech giants they would lobby (read buy influence) against this as if their life depended on it. It's good that bigcorps don't have their claws in every country on the planet.
Your "free market forces" argument comes straight from the 70s. How much more abuse are you willing to tolerate before it becomes blindingly obvious that market forces don't punish companies except if they don't make money.
Microsoft was punished by the government, i.e. the law, not the market.
And how did the market forces punish Facebook for the colossal fuck-ups? Because even after expecting a 5 Billion fine their stock was up.
Saying that market forces punish predatory attitudes is beyond the pale. It's gaslighting and ignorance rolled into one.
Skirting laws (Uber, Airbnb, Amazon), giving worker protections a runaround (any gig economy company) or destroying privacy (Google, Facebook, MS, many more) is not the kind of innovation this planet needs.
> Microsoft was punished by the government, i.e. the law, not the market.
I wholeheartedly disagree. There has been a huge active community rigorously battling Microsoft's dominance offering alternative technologies and innovations. They deserve all the credit for maintaining the balance. Not government.
> And how did the market forces punish Facebook for the colossal fuck-ups?
Facebook has become less and less popular in recent years. Exactly because people got concerned with those colossal fuck-ups. So you see Facebook on the fence of those things and trying to improve their company ethics.
> Saying that market forces punish predatory attitudes is beyond the pale. It's gaslighting and ignorance rolled into one.
This is perhaps the popular opinion in Europe. Do you completely deny the existence of corrective forces? It seems to me a the US is doing a far better job at embracing them and has a lot of its innovative success to thank for it.
So not taxing companies would be the best solution?
Let's not forget that tech giants often don't pay any taxes to eu countries. Like zero. This is real problem for system based around taxes. It also puts smaller players that have to pay at disadvantage.
This is just way how to tax the giants. I thin soon this is going to be normal and probably even higher.
But that's just not how it happened. That settlement was pretty much insignificant.
First Amazon launched their online book store. Then Microsoft made a $150 million investment into Apple. Then Google launched its search innovation. Linux and Apache were already hugely successful with dominating the web. Java and PHP were kicking ASP's ass.
Microsoft got so much distracted by certain market dominance they totally missed the uprising of the web players. Then Valve released their app store, Apple released the iPhone including its app store, Google released Android and Microsoft saw its dominance fall apart. The settlement didn't contribute to any of these developments.
So what happened is - because Microsoft was so dominant - the competition needed to seriously up their innovative game to conquer their positions. If government would have intervened more strongly there wouldn't have been the need for stronger competition which would have resulted in less innovation. The market corrected itself.
That settlement tied their hands competitively, made them think thrice before playing dirty and took the wind out of their sails. The settlement is what permitted Apple and Google to exist in the first place, so that they could launch the iPhone and Android.
Amazon was utterly irrelevant back then, they were a book store FFS. The investment into Apple was happening in the middle of the anti-trust fight, for crying out loud. And Google was invented also during that time and would have gone exactly nowhere with an IE monopoly.
MS crushed Linux on the desktop and they use it just like anybody else on the server. They even included it in Windows, Linux for them is not a competitor, it's a tool.
> The settlement is what permitted Apple and Google to exist in the first place.
How did it permit Google to exist? Google was running fine on IE.
> Amazon was utterly irrelevant back then
It was busy growing into the giant it is today. Nobody saw that coming back then.
> And Google was invented also during that time and would have gone exactly nowhere with an IE monopoly.
Why would an IE monopoly have prevented Google? Google came into existence exactly when Microsoft was dominating the browser market. Microsoft wasn't set out to dominate the web. They were pretty much embracing the dotcom boom (which included Google). They just wanted to make sure you would be browsing the web using their OS.
> Linux for them is not a competitor, it's a tool.
How is being a tool not a measure of success? We all use Windows as our tool. Linux was simply dominating its market.
You paint a grim picture of a predatory company trying to dominate the world. Meanwhile Microsoft was exactly so successful because - on the one hand - they allowed other vendors to create hardware for their OS and - on the other hand - Windows was very much geared towards other companies building software on top of Windows. Sure, Microsoft was taking some protective measures to solidify their business. But what you're implying is that - without the antitrust case - they would've gone straight against their own business model that made them so successful.
I will grant you the 150 million investment into Apple. That would perhaps not have happened without the antitrust case. Perhaps there wouldn't have been an iPhone. But what's often overlooked is how Steam was actually the first app store with auto-update features. Apple wasn't the only player in the mobile market. Android was already under development 4 years before the first iPhone came out. Google had already acquired Android 2 years before the first iPhone came out.
It's all pure speculation. But the fact is there were plenty of corrective/competitive forces. Who knows what would've happened without the antitrust case. I'm not convinced it would have resulted in Microsoft being able to maintain its dominance.
Okay, but you didn't really reply to anything I said in any meaningful way. Instead you just hooked in to out-of-context fragments to insert your own points.
For example on my point about Europe's fragmentary nature due to the different languages you reply with some observations about ... France's tax rates? Okay...
I'm sorry. I can rant on about this for hours and hours and I feel like I'm already dominating this discussion too much. I don't believe language barriers are such a big problem. Most tech people speak English.
What's ironic is that those language barriers are exactly solved thanks to translation innovations coming from the US. I'm now able to communicate much more easily with fellow Europeans.
I truly believe we have a problem in Europe where there's too much focus on welfare and government control at the cost of free market and innovation. Too much "system thinking" as opposed to creative engineering. This used to be different a couple of decades ago.
I think you are underestimating the language and cultural barriers inside Europe. When I still lived in the Netherlands (my native country) we got a British employee at some point. Everyone in the company spoke English reasonably well, but not quite fluently. So what happened was that lunch conversations started out in English but quickly evolved to Dutch. I felt bad about it, but it was just so much easier to joke around in Dutch.
This also mirrors the experience of my British ex-girlfriend, who lived and worked in the Netherlands.
After this I lived in the UK for two years while working remote for an Irish company, and it took me a while to truly communicate efficiently with native English speakers. I knew the grammar and vocabulary, it just wasn't always obvious how to use it. People have made entire charts about miscommunications[1]. I also wrote a bit about this elsewhere[2].
It's one thing to argue in English on HN or watch Star Trek, but quite another to actually work in English every day. Perhaps it might actually be easier is everyone is a non-native speaker, but then you quickly run in to the "large group of natives speaking their own language"-problem I described before.
In addition, actually living in a foreign country is also a bit harder if you don't speak the language.
Either way, the barrier is certainly higher than in the US or China, where everyone just speaks the same language.
> too much focus on welfare and government control at the cost of free market and innovation. Too much "system thinking" as opposed to creative engineering. This used to be different a couple of decades ago.
Wasn't there much more welfare several decades ago? This certainly seems the case in my own country of the Netherlands, and it was also true in the UK (until Tatcher came in). I can't speak to other countries.
I'm not convinced these things are strongly correlated to creativity or innovation. It seems to me that the primary reason people create things is because humans are just creative; it's part of our nature. Certainly if I look at my own motivations the amount of money going to the taxman is pretty far down the list of why I do things.
Additionally, not everything is about economics. I have some amount of sympathy for libertarianism/free market thinking, but too often does everything get reduced to merely an economical argument. The world is more than just economics. In Germany they've been having a large debate about the ethics of driverless cars, for example, whereas in the US they've just put the cars on the road without first having a public debate. It may be more "innovative", but is it also the right thing to do?
So according to the CPB welfare spending as a percentage of GDP in the Netherlands increased significantly from ~20% (1930) to ~40% (1970) up to ~60% (1980).
As welfare spending increased we started losing our ability to innovate. We lost DAF cars (1972), Fokker (1996) and Philips has become a shadow of what it used to be.
So take a company like Philips. Before they brought technical innovations like color television, the VCR and Compact Disc. I believe product development has since shifted from hardcore engineering design (technical) towards industrial design (art). Philips now believes it's all about "consumer lifestyle" as opposed to developing the next technological breakthroughs. Since then the consumer divisions pretty much died and all that remains are the consumer-less engineering divisions (ASML and Philips healthcare).
How did this happen? I believe the welfare attitude plays a big role. People have gotten too comfortable. The education system is part to blame as well. Colleges and universities trying to lure students with sexy programs and the promises of sexy careers (that no company needs). Engineering usually isn't on that list of sexy jobs.
In the US people seem to better understand you need to work hard to move forward. A job is more about the value you can provide as opposed to the value you receive. It seems we understood that better in Europe a couple of decades ago.
It's worth noting that Czechia is small 10mil citizen country. So are many other eu countries. The language/culture/policy difference is a real decentralizing showstoping force. What it means is that many countries have their startups just filling vacuims of small local services (their ubers, airbnbs, craigslists, groupons etc.) companies you've never heard of.
At best the countries find "niche" in tech. For example for Czechia it's been security - AVG, Avast, Eset and Kerio. Tooling - InteliJ, Netbeans. And gaming - apart of big merger+acusition which led to 2K czech you have many smaller players like Madfinger.
Also kiwi.com is czech so it's not like there completely no tech scene. Education is great.
It's just mindset is not so much go big or go home. People in europe seem to be ok with moderate success.
The parent comment suggests European countries are killing "innovation" through taxes and regulation.
This sounds like a bad idea, so I had a look at the article to see what "innovation" was being taxed.
Innovation is a "new idea, creative thoughts, new imaginations in form of device or method". (source: merriam-webster.com)
Plugging in our definition of innovation, the question becomes:
What is the new idea, creative thoughts, new imaghinations in form of device or method that trigger this new tax in Europe?
First the article says the UK gov't wants to tax "companies whose business model requires the active participation of U.K. users in creating content, being targeted with advertising or linked by intermediary platforms."
Is collecting user content and serving ads "innovation"? That is what triggers the tax.
What if we just collected user content, maybe charged a fee? No ads. Do we get taxed?
Second, it says the Czech gov't wants to tax companies with "advertising and personal data sales as the primary base" as well as "sharing economy platforms". The article says the tax "prioritizes targeted ads".
Is selling advertising and personal data "innovation"?
What if some Czech programmer make an Uber or AirBnB style app but do not sell advertising or data? Do they get taxed?
Third, it says the French gov't wants to tax "platforms that put users in touch with each other for a fee".
Is putting users in touch with each other for a fee "innovation"? Does that make ad-supported companies that do this exempt?
What if a company sells native software that puts users in touch with other, peer-to-peer. Is that a "platform"? If not, do they get taxed?
What is their definition of "platform"? Under the Wikipedia definition, the internet itself is a "platform".
As always, the devil is in the details. We need to see the text of these tax laws.
Finally, the article discusses the merits of the "[t]axing advertising that is based on personal data".
Is advertising based on personal data "innovation"? What loss would we, the majority, suffer if this particular innovation were taxed?
Is it possible to have "innovation" that does not involve advertising based on personal data? Of course. That is the kind of innovation I prefer. I am using some to write this comment.
We will not lose the benefits of personal computer-based innovations simply because we take away the financial incentive to collect personal data and serve ads. That is not the raison d'etre for the type of innovation we seek to encourage. It is the advances in hardware and networking.
Actually I would like to see those questions answered. :)
I personally see very little innovation (in terms of greater addition to our society) in sites like facebook, airbnb ...
I was kind of fan of Uber in the beginning, but after the scandals it seems they're not different from any other big corp. Just greedy as others.
Czechia is one of a few countries with local competitors to Google and other tech giants. Why should we care about Google? Seznam actually pays taxes here.
I think they should raise it to 30%.
Any given country provides a much better platform to these companies compared to what google play provides to app publishers.
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[ 4.2 ms ] story [ 154 ms ] threadIs there a way to leverage competition to reduce this disparity instead of taxation? If there were proper competition, would there be a disparity?
This happens because tech companies are well-equipped to siphon user data at massive scale and have been given the luxury of embedding these services into our daily lives without sufficiently educating the public around their business models. Ultimately, the public has very little control over what these companies do with this data, so there's a perverse mismatch of incentives here.
Tech companies are incentivized to collect user data and not explain how it's used. Tech companies are incentivized to pay lobbyists to discourage the government from placing a market value on data. The public doesn't have that kind of lobbying influence.
That's what I'm getting at.
See for example: https://stratechery.com/2016/antitrust-and-aggregation/
I think the point is to start forcing companies into thinking sensitive user data is a liability that is taxed or worse if they do anything "nefarious" with that data (where nefarious could be whatever we think to put in that law).
So it's like asking for Coca-cola to "have competition" (which generally just creates more sugar soda brands) vs taxing sugar.
In a sense, GDPR already kind of does this, increasing the burden of storing user data. Would be interesting to consider dramatically ramp up this burden---maybe with a literal tax---for behavioral data stored longer than 90 days (or some other grace period), like a weaker version of Maciej Ceglowski's Six Fixes. https://idlewords.com/talks/what_happens_next_will_amaze_you...
Offline businesses now and always don't and have never had indefinite surveillance records of their customer's behavior. Is it your position that offline businesses are incapable of not treating their customers like crap?
Besides which, aggregated data that can't be de-anonymized would be exempted, as described by Maciej Ceglowski. The 90-day limit is only on fine-grained, personally-identifiable behavioral data that isn't explicitly shared (the content of my HN comment should of course be kept forever/until I delete it; but there's no reason to keep the IP address I used, other than aggregate statistics about what cities people access HN from).
In all honesty, they do have monopolies and it seems that the same type of anti-trust enforcement that was used to help Apple/Google in the browser war against Microsoft just isn't there anymore. Now Google/FB really do have a monopoly on user data.
I think properly regulating instead of just taxing is more useful.
But you're right that HN is immensely biased against Google and Facebook. That's why you frequently see commenters like yourself make the patently ridiculous claim that they are a monopoly.
HN community also understands better Google/FB business model and what actually happens with their data when fed into Google/FB.
the value of personal data can only be quantified if you can follow the path to its eventual sale. If they are not selling it but using to expand their own presence I have no issue. However buyers should be easy to identify along with the transaction value.
i just find it odd government and some who don't like what these companies put so much value into this data when the vast majority really assign it no value. people willfully give up so much and its not going to change because people want to be noticed more than they want to notice others
How do they manage to pay zero taxes then? I thought AMT assumes that once you're beyond a certain level of income, your lose most deductions and essentially pay a certain percent of the income.
An org that invests all their margin into growth doesn't pay (as much) tax.
The best way though is to create an offshore subsidiary, and then have the subsidiary invoice the main office for "services" or "IP licensing". The invoice becomes a cost and is deducted from revenue. "Everyone" (all the big players) do things like that. It's 100% legal.
Just as tax rates have an impact on architecture, they also help to shape companies.
https://99percentinvisible.org/article/vernacular-economics-...
While these regulatory actions are surprising to some, if you’re into history it’s no surprise it’s happening again, but to tech instead of oil.
It’s not clear how big tech companies have the same political influence. Yes, social media has been manipulated I think to influence outcomes, but do social media companies themselves have that influence over politicians? To be clear, I am not saying you’re wrong. I’m asking a question.
think about taxi drivers: very low numbers, low revenue=low taxes, huge political clout.
same thing with the model aircraft enthusiasts: https://www.google.co.uk/amp/s/amp.ft.com/content/2574825c-6...
considering that most young people that work in these tech companies don’t vote, these tech companies are ripe for plundering.
Its interesting that this line has no support and just treated as fact for this article. Is there a source to explain the reasoning?
Taking otherwise available rentals off the full-time rental market and moving the "up" the economic return ladder to AirBnB rentals makes the housing situation tighter for residents and would-be residents.
(I'm a happy user of AirBnB platform and am "OK" with the conversion of real estate to its highest and best use, but I understand the opposition argument and think it has some merit.)
My landlord kicked us out to run an airbnb fulltime after seeing how much a neighbour was earning. (Around New Years /Christmas you could easily bring in 2 months rent). Despite all this I hold no illwill towards Airbnb.
If any other basic need was chronically undersupplied due to government inaction people tend to riot, yet somehow housing gets a free pass.
https://emerging-europe.com/news/central-prague-does-battle-...
Venice is as real a city as the Magic Kingdom. Because tourists ate it completely. There have always been tourists going to Venice, but since the jet age so many that all the old families that used to make it their home have been kicked out.
Probably the future is everyone not wealthy gets kicked out and put on the equivalent of an Indian Reservation. Enforced by rents, toll roads and congestion pricing.
Venice airport is comparatively small with 11'000'000 flights a year.
Property owners, who are also voters, have incentives for keeping zoning a problem.
* Airbnb flophouses are not obliged to conform to fire, health, or safety codes, and they don't pay taxes. Right off the bat, they're scads cheaper than hotels because they don't bear those costs.
* Visitors and residents have very different incentives. Tourists may wish to stay in cute residential areas, but they are not necessarily interested in being neighborly -- they're not particularly invested in the comfort and safety of the people around them, because they'll be leaving soon.
* People do a lot of gross stuff in a hotel that you probably don't want to encounter in your apartment building. Drugs, prostitution, loud parties.
No amount of "zoning" is going to make the commingling of apartments and hotels attractive to full-time residents, nor will any change in "zoning" make flophouses less profitable.
In most old cities, hotels, bed and breakfasts, hostels etc all exist in residential areas. And boarding houses used to be common in these same areas too.
Because Airbnbs aren't flophouses. They're holding usually just a couple or family, maybe a dozen people tops unless the place being rented is a really big detached house. Expecting them to be held to the same standards as hotels is not necessary. If this lack of compliance is so dangerous, then why are letting people live in these places full time?
> Visitors and residents have very different incentives. Tourists may wish to stay in cute residential areas, but they are not necessarily interested in being neighborly -- they're not particularly invested in the comfort and safety of the people around them, because they'll be leaving soon.
Tourists also spend more money while on vacation, especially on small businesses like restaurants and bars. More importantly, they bring this money in externally. More tourism attracts the ire of residents that now have to deal with out-of-town people walking around their neighborhood, but I have rarely seen someone complain about negative economic impact of tourism let alone make a coherent argument about why it's bad.
> People do a lot of gross stuff in a hotel that you probably don't want to encounter in your apartment building. Drugs, prostitution, loud parties.
Plenty of people do these things in their apartments, condos, and houses, too.
> No amount of "zoning" is going to make the commingling of apartments and hotels attractive to full-time residents, nor will any change in "zoning" make flophouses less profitable.
Tourists generally don't want to visit residential areas. Airbnb-ing instead of renting a hotel is usually less convenient because the former are further from the city center. When I used an Airbnb in Iceland it was more of a hassle because I effectively needed to rent a car (and then subsequently park a car) to get to the center of the city. It was worth it because of cost. If there were hotel rooms available at the same cost of Airbnb then I would have used that.
However, the number of hotels is usually kept artificially limited. This drives up the cost of renting hotel rooms, which benefits hoteliers. This is the main reason why Airbnb is so much cheaper than hotels. Hoteliers don't want to build more hotels because that would drive their costs down and their expenses up.
Tourism is an economic curse similar to the curse of resources. It makes most unrelated economic activity less viable.
Got any source to back up this claim? Plenty of regions with strong tourism industries have other viable industries. San Francisco, LA, and New York are all heavy tourist destinations but no reasonable person would say that this tourism has made unrelated economic activity less viable. Same with London and Paris. Large tourism industry, but plenty of other industries.
It may be true that as other economic opportunities are exhausted, communities try to use tourism to bring in money to the community (e.g. Leavenwoth, WA https://en.wikipedia.org/wiki/Leavenworth,_Washington). Underdeveloped countries that don't have the ability to participate in many industries lean on tourism more heavily (especially eco-tourism since the lack of development is actually an asset for that industry) which makes tourism take up a larger proportion of their GDP.
But I am highly skeptical of your claim of a causal link between growth of tourism and inability to sustain other industries.
I think it's generally a good thing overall, but if I were a buggy whip manufacturer around Detroit in 1920, I wasn't as happy with my lot in life 20 years later...
[0] http://unevenearth.org/2017/04/is-tourism-a-poverty-trap/
For the most part I stick with hotels.
The problem with this is that it makes masses of lawbreakers out of normal people. When suddenly lots of people are breaking the law, and they're not easily treated as an outgroup, the incentives about enforcing the law get complicated.
For instance, renting a room inside your home to visitors, while you continue to occupy the home, is perfectly legal almost everywhere. Often, there is little or no regulation to comply with. (For example, actual BnBs.)
But many, many, many of AirBnB's rentals are illegal flophouses. Entire-apartment rentals inside established buildings, or flophouses with 2-4-6-8 bedrooms rented to unrelated strangers, with a maintenance service that comes by to turn down the beds. Those are where the money are at.
A lot of these places are lacking hotels because we don't want them there.
These are residential areas because we want them to be.
We want the tourists, the traffic, and the mess on the other side of town.
You're sort of acting like just because the market wants something it is right to do so and it's a failing of central planning if it differs in opinion about needs.
talk to any of the uber drivers where I work, so take it as you will, and many will tell you of passengers who use uber/lyft because the drivers are friendlier, arrive on time, and tend to drive nicer cars. the arrive on time and don't just drive off because you need to go where the taxi won't is very important. and it is people of all income levels using them
I'm not selfish enough to only think about my comfort, I want those drivers to be able to have some damn job security, because we're in the 21st century, not the dark ages.
tldr: residential population in the more attractive parts of town have decreased as much as 45% in the last 12 years. Activists staged protests of illegal Airbnb's by renting them, occupying them, and refusing to leave, all while filming their interactions.
0: https://www.newyorker.com/magazine/2019/04/29/the-airbnb-inv...
An even playing field is a healthier market, without megacorps that can run at a loss for decades to crush out any chance competition in a field.
You don't have to pay it right away at the time of purchase, but you do have to pay it. You might want to talk to your company's accountant...
There's no scenario where Germany doesn't get its export machine hammered with tariffs if the EU broadly goes too far with this. It will drag the EU economy below water into a perma recession (which it has almost been in already since 2007, all the major economies of Europe have seen near zero net GDP expansion for over a decade). Europe is extraordinarily weak, with Brexit and France, as well as the continued residual mess in Spain, Italy, Greece and Portugal from the great recession. Germany is the only thing propping up the EU economic house of cards. And that's what the US will target to break the back of the EU. If I were the US, I'd start with finishing off the collapse of Deutsche Bank (down to a $16b market cap now) and move to decimate their auto industry (conspire with China as it makes sense, we can carve the world in half between superpowers; they'd love to take the place of some of Germany's advanced industry and move up the ladder of development further). Once it's war, it's war. Or you know, the EU could be smart, turn back and stop the targeted assault on the US economy.
If it gets really feisty, just look the other way, Russia will begin rebuilding its empire by consuming parts of Eastern Europe (which it's always desperate to do). That will destabilize an already weakened EU. These countries are either allies of the US, or not. If they are, they will stop attacking the US economy. If they're not, I don't see why the US should be protecting them from Russia with its military power. And there's absolutely nothing the EU can do to stop Russia from taking what it wants in Eastern Europe.
The local governments get more revenue from high demand (since it increases assessments), and limited supply, so they generally do not have the right incentives to make housing affordable. The public is pretty ignorant in these places, as they should perhaps be allowed to be, so they do not put any pressure on politicians to stop this gambit.
No, importantly, it does not reduce the supply. If you want to apply terms like this, pay attention to how they are defined.
Access is not supply, and supply is not access.
There is an immense supply of housing in Vancouver, and as much as is possible, AirBnB-facilitated demand (although it's really a tiny fraction of the total demand) puts pressure on the market to increase supply (even if the circumstances make that unlikely to succeed greatly). Whether people living in Vancouver are buying their housing through rental agreements, purchases, or short term rentals like AirBnB, the supply will only tend to increase (just not enough that some of it is "cheap").
For an example of high supply with poor access, just look at the tremendous number of low-quality developments across China with few or no legitimate residents.
What would be the point of starting a business in countries like Czech and Estonia vs the US?
Does Estonia offer any anonymity through its e-residency program?
A lot of us have stereotypes towards EU regulations as being restrictive, wonder if you could address this one glaring fear in the back of our minds (ex. GPDR).
What should folks on HN know a thing or two about Estonia? I've literally only heard of the country 4 years ago when I played Arma: Cold War with an Estonian gamer, which ironically is a military simulation of gorilla warfare against a USSR invasion of the Baltics..... (see OF: Resistance)
It depends what you mean by anonymity - if you're just an e-Resident (eg. you've applied for the status and gotten the card) then it's not public to anyone except you and the Estonian government. If you open a business however, then there is a large amount of transparency. Estonia is very very transparent, I can even see things like the age of the owner of a company if I'm so inclined to look it up.
To be honest, I haven't seen much in terms of restrictive policy in Estonia specifically with the exception of banking - Estonia is a small country of just 1.3m and most of the banks are foreign owned. That means there's not much sway we have domestically over policy and it's dictated from outside (mainly from the parent banks in the Nordics) and it can be tough to open a bank account as a foreigner if you don't have strong ties to Estonia. That said, this is getting tighter just about everywhere as banks try to comply with Know Your Customer regulations (however, my impression is that this is mainly brought on by the US rather than the EU and banks are so stringent because they don't want to lose their US dollar payment capabilities from correspondent banks)
There are a lot of interesting things about Estonia - I'll skip the Googleable things and say that from living there the most interesting thing is on one side how closed and yet how open the people are. To give an example, in my apartment complex I don't believe I ever spoke one word to any of my neighbors in a year, but for the people I met via some group activity or was introed by Estonians I knew from work, they are incredibly open and friendly (basically if you don't have a reason to speak with an Estonian they think you're incredibly strange if you try to initiate a conversation, but if there's a reason, they're very friendly people). The other really interesting thing I've found is the Russian/Estonian dynamic. There's still a large Russian minority of people in Estonia from the Soviet days and some communities are not integrated at all, there are constant political debates about forcing schools to only teach in Estonian (there are currently ones that have all Russian courses). So you have a situation where there are people born and raised in Estonia but who don't speak the language and live pretty much only in Russian communities and have a different worldview of many Estonians.
Wow, it seems clear to me that some people only respect democracy when they win. I don't like Brexit but if people in UK vote for it, let them be.
The malicious actors and those that try to subvert democracy are the billionaires that buy Media in order to propagate lies that at the current time remain unproven.
A tax on absolute income is a very dangerous thing in any gobertment. But we already have it, with inflation.
We don't like that thing that you do. So we'll just apply taxes and let you continue doing the thing we don't like you to do.
A 7% tax on revenues is a 50% tax on a business with a 14% margin. It's even more damaging when one considers start-ups, who run negative profits in their early years. (Seven percent is thus eleven months of runway in the Czech Republic for every 12 months a German competitor gets.)
Seven percent is generally prohibitive to low-gross margin business, e.g. any tech company producing physical devices or doing anything next to retail. It thus compresses an economy's accessible tech sector to enterprise businesses.
If these taxes remain confined to ad-driven businesses, that's a fair tradeoff. But given Europe's penchant for over-encroachment, it could very easily be over-applied.
TL; DR Top-line taxes transfer wealth to high-margin businesses over low-margin businesses and from start-ups to incumbents.
Income and corporate taxes are so easily manipulated that there's entire industries built around it. Nations should be aiming for efficient taxation sources not ever more complex regulations creating yet another industry sector to simply navigate it.
"Tech giants" of the past and present like IBM, AT&T, Microsoft, Facebook, Oracle, Uber, and Amazon are all widely disliked and criticized.
Aside from that there are plenty of European tech companies (ASML, Logitech, Skype, Spotify, just to name a few) the attitudes in Europe tend to be different. Attend one of the Silicon Valley conferences where it's all "we're going to change world!" vs. the German CCC where it's "we're not sure if society as a whole benefits from this technology".
There are probably other reasons too. Silicon valley and that Chinese city I forgot the name of are powerful "tech hubs" where workers, innovators, and investors meet. Europe lacks such a powerful "hub". I suspect the most important reason for this is that "Europe" isn't a single country but dozens of countries. Even in the EU – where you can legally move to another country at a whim – it's not so easy, as you may not speak the language.
This is why the UK probably has more EU immigrants than many other countries, since most people speak some English.
And sure, perhaps taxes can be a factor? I'm unsure of it, and I've never seen it proven, but I am willing to be convinced. Either way, it's certainly a lot more complex than "taxes kill innovation".
What you see is that - if the Czech Republic would have their own tech giants - they wouldn't propose such an aggressive taxation towards it. It's why Germany was against such taxes because they fear repercussions towards their own industry.
> But a predatory attitude focused only on their own growth and "to hell with everyone else".
Such a predatory attitude also gets punished through free market forces. A company like Microsoft got severely punished for their predatory behaviors.
One of my favorite tech giants is 'Robert Bosch Stiftung' from Germany.
> Aside from that there are plenty of European tech companies (ASML, Logitech, Skype, Spotify, just to name a few)
ASML is the meager remnant of the once almighty Philips. Logitech is Swiss. Switzerland indeed does a better job providing a healthy climate for innovation. Skype is owned by Microsoft. Spotify is indeed a lovely company (worth protecting for sure).
> Europe lacks such a powerful "hub".
This is indeed a problem. San Francisco provides an excellent climate that attracts innovation. An important factor was perhaps that there was so much room to grow. The right city at the right time. In Europe most of the land is already accounted or planned for something.
China got to grow so quickly exactly because the government decided to embrace free market forces.
> This is why the UK probably has more EU immigrants than many other countries
Many wealthy people migrated from France to the UK when Hollande proposed his tax plans.
https://www.businessinsider.com/small-business-owners-explai...
Now we see France giving all kinds of tax breaks to lure UK companies to France after Brexit.
Wait, if the company was in Czech rep. it would pay taxes there already. Or what am I missing?
Then if you apply specific "personal data taxes" they would come on top of the regular taxes already payed by your local tech giant. If such a tech giant would exist.
The way this should be balanced out is by stimulating counter-innovation coming from Europe. Not by taxing innovation coming from foreign countries.
Your "free market forces" argument comes straight from the 70s. How much more abuse are you willing to tolerate before it becomes blindingly obvious that market forces don't punish companies except if they don't make money.
Microsoft was punished by the government, i.e. the law, not the market. And how did the market forces punish Facebook for the colossal fuck-ups? Because even after expecting a 5 Billion fine their stock was up.
Saying that market forces punish predatory attitudes is beyond the pale. It's gaslighting and ignorance rolled into one.
Skirting laws (Uber, Airbnb, Amazon), giving worker protections a runaround (any gig economy company) or destroying privacy (Google, Facebook, MS, many more) is not the kind of innovation this planet needs.
I wholeheartedly disagree. There has been a huge active community rigorously battling Microsoft's dominance offering alternative technologies and innovations. They deserve all the credit for maintaining the balance. Not government.
> And how did the market forces punish Facebook for the colossal fuck-ups?
Facebook has become less and less popular in recent years. Exactly because people got concerned with those colossal fuck-ups. So you see Facebook on the fence of those things and trying to improve their company ethics.
> Saying that market forces punish predatory attitudes is beyond the pale. It's gaslighting and ignorance rolled into one.
This is perhaps the popular opinion in Europe. Do you completely deny the existence of corrective forces? It seems to me a the US is doing a far better job at embracing them and has a lot of its innovative success to thank for it.
Let's not forget that tech giants often don't pay any taxes to eu countries. Like zero. This is real problem for system based around taxes. It also puts smaller players that have to pay at disadvantage.
This is just way how to tax the giants. I thin soon this is going to be normal and probably even higher.
Microsoft was steamrolling over the huge community battling it, including Apple, Netscape, Sun and Linux.
United States vs. Microsoft Corp forced them to behave, otherwise that huge community would have had to battle them from beyond the grave.
Facebook is a very profitable behemoth. Where exactly is the punishment? Oh, they have to improve their company ethics.
First Amazon launched their online book store. Then Microsoft made a $150 million investment into Apple. Then Google launched its search innovation. Linux and Apache were already hugely successful with dominating the web. Java and PHP were kicking ASP's ass.
https://news.netcraft.com/archives/2019/04/22/april-2019-web...
Microsoft got so much distracted by certain market dominance they totally missed the uprising of the web players. Then Valve released their app store, Apple released the iPhone including its app store, Google released Android and Microsoft saw its dominance fall apart. The settlement didn't contribute to any of these developments.
So what happened is - because Microsoft was so dominant - the competition needed to seriously up their innovative game to conquer their positions. If government would have intervened more strongly there wouldn't have been the need for stronger competition which would have resulted in less innovation. The market corrected itself.
Amazon was utterly irrelevant back then, they were a book store FFS. The investment into Apple was happening in the middle of the anti-trust fight, for crying out loud. And Google was invented also during that time and would have gone exactly nowhere with an IE monopoly.
MS crushed Linux on the desktop and they use it just like anybody else on the server. They even included it in Windows, Linux for them is not a competitor, it's a tool.
How did it permit Google to exist? Google was running fine on IE.
> Amazon was utterly irrelevant back then
It was busy growing into the giant it is today. Nobody saw that coming back then.
> And Google was invented also during that time and would have gone exactly nowhere with an IE monopoly.
Why would an IE monopoly have prevented Google? Google came into existence exactly when Microsoft was dominating the browser market. Microsoft wasn't set out to dominate the web. They were pretty much embracing the dotcom boom (which included Google). They just wanted to make sure you would be browsing the web using their OS.
> Linux for them is not a competitor, it's a tool.
How is being a tool not a measure of success? We all use Windows as our tool. Linux was simply dominating its market.
You paint a grim picture of a predatory company trying to dominate the world. Meanwhile Microsoft was exactly so successful because - on the one hand - they allowed other vendors to create hardware for their OS and - on the other hand - Windows was very much geared towards other companies building software on top of Windows. Sure, Microsoft was taking some protective measures to solidify their business. But what you're implying is that - without the antitrust case - they would've gone straight against their own business model that made them so successful.
I will grant you the 150 million investment into Apple. That would perhaps not have happened without the antitrust case. Perhaps there wouldn't have been an iPhone. But what's often overlooked is how Steam was actually the first app store with auto-update features. Apple wasn't the only player in the mobile market. Android was already under development 4 years before the first iPhone came out. Google had already acquired Android 2 years before the first iPhone came out.
It's all pure speculation. But the fact is there were plenty of corrective/competitive forces. Who knows what would've happened without the antitrust case. I'm not convinced it would have resulted in Microsoft being able to maintain its dominance.
For example on my point about Europe's fragmentary nature due to the different languages you reply with some observations about ... France's tax rates? Okay...
This is not really how conversations work.
What's ironic is that those language barriers are exactly solved thanks to translation innovations coming from the US. I'm now able to communicate much more easily with fellow Europeans.
I truly believe we have a problem in Europe where there's too much focus on welfare and government control at the cost of free market and innovation. Too much "system thinking" as opposed to creative engineering. This used to be different a couple of decades ago.
I think you are underestimating the language and cultural barriers inside Europe. When I still lived in the Netherlands (my native country) we got a British employee at some point. Everyone in the company spoke English reasonably well, but not quite fluently. So what happened was that lunch conversations started out in English but quickly evolved to Dutch. I felt bad about it, but it was just so much easier to joke around in Dutch.
This also mirrors the experience of my British ex-girlfriend, who lived and worked in the Netherlands.
After this I lived in the UK for two years while working remote for an Irish company, and it took me a while to truly communicate efficiently with native English speakers. I knew the grammar and vocabulary, it just wasn't always obvious how to use it. People have made entire charts about miscommunications[1]. I also wrote a bit about this elsewhere[2].
It's one thing to argue in English on HN or watch Star Trek, but quite another to actually work in English every day. Perhaps it might actually be easier is everyone is a non-native speaker, but then you quickly run in to the "large group of natives speaking their own language"-problem I described before.
In addition, actually living in a foreign country is also a bit harder if you don't speak the language.
Either way, the barrier is certainly higher than in the US or China, where everyone just speaks the same language.
[1]: https://pbs.twimg.com/media/B0jvF8NIMAAFIn6.png:large and https://merican.vickihollett.com/wp-content/upLoads/anglo-du...
[2]: https://lobste.rs/s/xnjo8g/add_downvote_reason_unkind#c_imbo...
> too much focus on welfare and government control at the cost of free market and innovation. Too much "system thinking" as opposed to creative engineering. This used to be different a couple of decades ago.
Wasn't there much more welfare several decades ago? This certainly seems the case in my own country of the Netherlands, and it was also true in the UK (until Tatcher came in). I can't speak to other countries.
I'm not convinced these things are strongly correlated to creativity or innovation. It seems to me that the primary reason people create things is because humans are just creative; it's part of our nature. Certainly if I look at my own motivations the amount of money going to the taxman is pretty far down the list of why I do things.
Additionally, not everything is about economics. I have some amount of sympathy for libertarianism/free market thinking, but too often does everything get reduced to merely an economical argument. The world is more than just economics. In Germany they've been having a large debate about the ethics of driverless cars, for example, whereas in the US they've just put the cars on the road without first having a public debate. It may be more "innovative", but is it also the right thing to do?
https://www.cpb.nl/sites/default/files/publicaties/download/...
As welfare spending increased we started losing our ability to innovate. We lost DAF cars (1972), Fokker (1996) and Philips has become a shadow of what it used to be.
So take a company like Philips. Before they brought technical innovations like color television, the VCR and Compact Disc. I believe product development has since shifted from hardcore engineering design (technical) towards industrial design (art). Philips now believes it's all about "consumer lifestyle" as opposed to developing the next technological breakthroughs. Since then the consumer divisions pretty much died and all that remains are the consumer-less engineering divisions (ASML and Philips healthcare).
How did this happen? I believe the welfare attitude plays a big role. People have gotten too comfortable. The education system is part to blame as well. Colleges and universities trying to lure students with sexy programs and the promises of sexy careers (that no company needs). Engineering usually isn't on that list of sexy jobs.
In the US people seem to better understand you need to work hard to move forward. A job is more about the value you can provide as opposed to the value you receive. It seems we understood that better in Europe a couple of decades ago.
At best the countries find "niche" in tech. For example for Czechia it's been security - AVG, Avast, Eset and Kerio. Tooling - InteliJ, Netbeans. And gaming - apart of big merger+acusition which led to 2K czech you have many smaller players like Madfinger.
Also kiwi.com is czech so it's not like there completely no tech scene. Education is great.
It's just mindset is not so much go big or go home. People in europe seem to be ok with moderate success.
This sounds like a bad idea, so I had a look at the article to see what "innovation" was being taxed.
Innovation is a "new idea, creative thoughts, new imaginations in form of device or method". (source: merriam-webster.com)
Plugging in our definition of innovation, the question becomes:
What is the new idea, creative thoughts, new imaghinations in form of device or method that trigger this new tax in Europe?
First the article says the UK gov't wants to tax "companies whose business model requires the active participation of U.K. users in creating content, being targeted with advertising or linked by intermediary platforms."
Is collecting user content and serving ads "innovation"? That is what triggers the tax.
What if we just collected user content, maybe charged a fee? No ads. Do we get taxed?
Second, it says the Czech gov't wants to tax companies with "advertising and personal data sales as the primary base" as well as "sharing economy platforms". The article says the tax "prioritizes targeted ads".
Is selling advertising and personal data "innovation"?
What if some Czech programmer make an Uber or AirBnB style app but do not sell advertising or data? Do they get taxed?
Third, it says the French gov't wants to tax "platforms that put users in touch with each other for a fee".
Is putting users in touch with each other for a fee "innovation"? Does that make ad-supported companies that do this exempt?
What if a company sells native software that puts users in touch with other, peer-to-peer. Is that a "platform"? If not, do they get taxed?
What is their definition of "platform"? Under the Wikipedia definition, the internet itself is a "platform".
As always, the devil is in the details. We need to see the text of these tax laws.
Finally, the article discusses the merits of the "[t]axing advertising that is based on personal data".
Is advertising based on personal data "innovation"? What loss would we, the majority, suffer if this particular innovation were taxed?
Is it possible to have "innovation" that does not involve advertising based on personal data? Of course. That is the kind of innovation I prefer. I am using some to write this comment.
We will not lose the benefits of personal computer-based innovations simply because we take away the financial incentive to collect personal data and serve ads. That is not the raison d'etre for the type of innovation we seek to encourage. It is the advances in hardware and networking.