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> Our infrastructure is crumbling because we do not collect enough taxes to subsidize it. That's just not true. We have crumbling infrastructure because we re

by dcposch 11y ago

> Our infrastructure is crumbling because we do not collect enough taxes to subsidize it. That's just not true. We have crumbling infrastructure because we refuse to prioritize it due to political dysfunction. If youre a surgeon or a lawyer living in San Francisco, your marginal tax rate is 39.5% federal + 11% state. Over 50%. You also pay 8.75% VAT on a lot of common purchases and 1% property tax. This is not a low tax environment. Hong Kong has a 15% flat tax and yet they have vastly better infrastructure than we do. Singapore is a similar story. Even Istanbul, with per capita income and tax collection thats a small fraction of ours, has a great light rail system that puts Bart to shame. Istikal Street is incredible--imagine Market and Mission put together, and pedestrian only. It is a beautiful city. So how do these places do it? * They respect and prioritize infrastructure * Their governments are less gridlocked * They value density and walkability * They have fewer NIMBYs, with much less power to obstruct * They're less lawsuit-friendly. In the Bay every big infra project spends time and money fighting lawsuits. * They have leaner bureaucracies. BART has tons of six figure salaries on the payroll for random adminstrative positions.

beachstartup 11y ago
if you're a surgeon or lawyer (or any other kind of high end services professional) living in SF and making any kind of significant money, most of your earnings are probably not coming on a W2 in the form of a salary. you're probably a partner or a shareholder in a business and get a dividend or a distribution from the business as a K-1 or a 1099-DIV/INT, and your effective tax rate is going to be way, way lower than 50%, probably closer to 20% or below. because you own part of the businesses a huge amount of your expenses are either deductible or simply covered by the business, which then deducts it from its earnings (which are probably getting passed through to you directly). lunch and some dinners, ambiguous trips to major cities, car lease, laptops, phones, christmas gifts, etc. also, a lot of people just straight up buy shit for their house on the business dime like nice TVs, furniture, etc. field audit? move it to the office. sales (you call it VAT .. okay) tax is probably high, but it's optional, you don't have to actually buy anything. also, you can buy stuff in cheaper places, especially if you and own a second home in a lower tax area (which many people do).
- ryanwaggoner 11y ago
  Can you please share this magic method for lawyers and surgeons to somehow get paid at an effective tax rate of 20%?
  - beachstartup 11y ago
    uh, i just did. be a partner in a firm, not some guy on the payroll.
    - ryanwaggoner 11y ago
      If you're a partner, you're either getting profit distributions that are taxed at ordinary income rates, or you're getting dividends that are taxed lower, but the corporation paid 35% tax on profits (plus state), which makes it much worse than just ordinary income rates. The only real ways I'm aware of to get taxes much lower is capital gains, or perhaps real estate where depreciation "losses" defer a lot of taxes on your income. But neither of those would really be available for partners in a law firm or medical practice. So again, please elaborate on how partners get taxed at 20%?
      - deleted 11y ago
        [deleted]
- WalterBright 11y ago
  Dividends and other distributions are taxed at normal income tax rates. You are likely thinking of long term capital gains taxes, which are something else entirely.
  - beachstartup 11y ago
    no, i'm not. distributions are taxed at 'normal' rates, but if you are receiving non-w2 income, the amount of things you can deduct from that income are far and away more varied and comprehensive.
nkurz 11y ago
Do you know how the operating costs for BART compare to comparable systems in the US and internationally? And how cost of new construction compares? My guess is that both costs are on the high side, but I don't know any details.
- shalmanese 11y ago
  US infrastructure construction is routinely 3 - 10x more expensive [1][2][3] on a like-for-like basis compared to other developed nations. This is one of the biggest facts that even well educated people seem completely unaware of, despite it foundationally shaping the debate around infrastructure investment. The primary cause appears to be the way the US solicits and manages infrastructure projects which leads to massive bloat and inefficiency. [1] https://pedestrianobservations.wordpress.com/2011/05/16/us-rail-construction-costs/ https://pedestrianobservations.wordpress.com/2011/05/16/us-r... [2] https://pedestrianobservations.wordpress.com/2013/06/03/comparative-subway-construction-costs-revised/ https://pedestrianobservations.wordpress.com/2013/06/03/comp... [3] http://www.bloombergview.com/articles/2012-08-26/u-s-taxpayers-are-gouged-on-mass-transit-costs http://www.bloombergview.com/articles/2012-08-26/u-s-taxpaye...
  - dcposch 11y ago
    > US infrastructure construction is routinely 3 - 10x more expensive on a like-for-like basis compared to other developed nations. > The primary cause appears to be the way the US solicits and manages infrastructure projects which leads to massive bloat and inefficiency. This is depressing. What can we, as voters or political donors or investors or entrepreneurs, do to fix it? The US has well organized and effective political advocacy groups for a number of causes. For example, there's one whose sole focus is maximizing people's gun rights. We need one for ending bureaucratic bloat, corruption, rent seeking and pork. A group whose sole goal is to fix government so we can get projects done cleanly and on time and at reasonable cost.
    - shalmanese 11y ago
      The problem is this is one of those issues that democracy has a hard time handling because it affects many people diffusely but almost nobody acutely.
Bahamut 11y ago
Where do you get 11% state tax from? Every California state income tax calculator I've seen for $150k-200k puts it at around 7.4% - 8% (sliding scale due to how California state taxes work). Not the lowest taxes still, but I'm bewildered as to where does some of this myth of the 10+% state income tax comes from.
- nkurz 11y ago
  Presumably he says 11% because the tax bracket for California incomes for $300K to $500K is 11.3%, and because he assume this is how much a surgeon in San Francisco makes. This does ignore the brackets, but he does note that he's discussing the marginal rate: https://www.ftb.ca.gov/forms/2015_California_Tax_Rates_and_Exemptions.shtml https://www.ftb.ca.gov/forms/2015_California_Tax_Rates_and_E... At a glance, this seems like a very reasonable estimate: How much does a Surgeon in San Francisco, CA make? The median annual Surgeon salary in San Francisco, CA is $435,890, as of February 22, 2016, with a range usually between $368,625-$517,331 not including bonus and benefit information and other factors that impact base pay." http://www1.salary.com/CA/San-Francisco/surgeon-salary.html http://www1.salary.com/CA/San-Francisco/surgeon-salary.html Where you do get your $150K-$200K estimate from?
  - Bahamut 11y ago
    I was just using it as an example where the effective rate ends up nowhere near the rates people temd to talk about - I've seen a lot of prior talk about state taxes for engineers mentioning rates like that too, and did a quick lookup on online income tax calculators to make the point that effective state income tax rates in California are not as straightforward as looking up a % and quoting it.
- sk5t 11y ago
  Top marginal CA state tax rate appears to be 12.3%. $150-200k income is not surgeon/lawyer money in CA... think 400+.
  - learc83 11y ago
learc83 11y ago
>Hong Kong has a 15% flat tax and yet they have vastly better infrastructure than we do. First, Hong Kong has such low taxes because the government makes most of their money by leasing and selling land. They don't need much to bring in as much tax revenue because of this. Their low tax rate has little to do with being more efficient or "prioritizing infrastructure." Second, why are you using the marginal tax rate for San Fransisco? You should be using the effective tax rate which is much much lower than 50%.
- deleted 11y ago
  [deleted]
- eru 11y ago
  The local government should institute a land value tax, then. That would bring in revenue, and have positive impact on the economy. (As opposed to almost all other taxes.)
  - panglott 11y ago
    Land value taxes are interesting, but if you look at the communities that implemented them in the era of Henry George, most of those communities have abandoned them because it's difficult to administer over the long term a taxation system that's quite different from the norm, and the benefits may be fairly mild.
    - newjersey 11y ago
      Also, I think it taxes should try to be uniform across the nation. I find it smelly for Texas to try to attract business from California it worse, Kansas to steal businesses from Missouri by promising not just lower tax rates but effectively zero tax. Why is it not OK for China PR to manipulate the RMB but it is OK for Texas to lower worker rights to attract business? And no, I don't believe in this "laboratories of democracy" bs. There are things in which uniqueness is good but there are other times when we need a standard (you know like the Constitution and the bill if rights). Now, I'd be all for a low tax, maybe 0.1% (due annually) of property value so that someone who owns one million dollars of land and building will pay $1000 extra each year. I'd go further and say no exceptions (not even non profit or charity) just to illustrate a simple problem: we don't know how to do any redistribution. Should this new tax go directly to the county government to spend as they wish? Should it go to the state so they can take money from Lawrence and spend it in Kansas City, KS? Should it go to the federal government so it can spend more in Iowa than the tax raised from Iowa? I am just bringing this up because I've thought about the fetish among some people that everything would be OK if the federal government just backed off and let the state governments take charge. The problem is it wouldn't really fix the problem. I don't think Divide and conquer really works like this because we haven't divided the problem enough. Our States are too big themselves. I guess my main point is that as long as the tax rate is uniform across the whole system regardless of location, I could live with a small land/house tax not exceeding 0.1% of property value so that a person with a million dollar house pays $1000 each year. The problem is in how we spend this money. Does the money have to be spent in the same neighborhood? Town? County? State? Country?
superuser2 11y ago
>BART has tons of six figure salaries Six figures is table stakes for living in the Bay Area, and I certainly don't want to see the BART staffed by people who live so far away they don't even ride it.
- amazon_not 11y ago
  Now that's an interesting question. How many (six figure) employees of BART ride the BART to work?
technomancy 11y ago
Singapore's income taxes are low, but they tax newly purchased vehicles at significantly over 100%.
- megablast 11y ago
  Seems reasonable to me. They might come close to recouping the huge costs that cars actually cost.

by dcposch 11y ago

beachstartup 11y ago

if you're a surgeon or lawyer (or any other kind of high end services professional) living in SF and making any kind of significant money, most of your earnings are probably not coming on a W2 in the form of a salary. you're probably a partner or a shareholder in a business and get a dividend or a distribution from the business as a K-1 or a 1099-DIV/INT, and your effective tax rate is going to be way, way lower than 50%, probably closer to 20% or below. because you own part of the businesses a huge amount of your expenses are either deductible or simply covered by the business, which then deducts it from its earnings (which are probably getting passed through to you directly). lunch and some dinners, ambiguous trips to major cities, car lease, laptops, phones, christmas gifts, etc. also, a lot of people just straight up buy shit for their house on the business dime like nice TVs, furniture, etc. field audit? move it to the office. sales (you call it VAT .. okay) tax is probably high, but it's optional, you don't have to actually buy anything. also, you can buy stuff in cheaper places, especially if you and own a second home in a lower tax area (which many people do).

ryanwaggoner 11y ago
Can you please share this magic method for lawyers and surgeons to somehow get paid at an effective tax rate of 20%?
- beachstartup 11y ago
  uh, i just did. be a partner in a firm, not some guy on the payroll.
  - ryanwaggoner 11y ago
    If you're a partner, you're either getting profit distributions that are taxed at ordinary income rates, or you're getting dividends that are taxed lower, but the corporation paid 35% tax on profits (plus state), which makes it much worse than just ordinary income rates. The only real ways I'm aware of to get taxes much lower is capital gains, or perhaps real estate where depreciation "losses" defer a lot of taxes on your income. But neither of those would really be available for partners in a law firm or medical practice. So again, please elaborate on how partners get taxed at 20%?
    - deleted 11y ago
      [deleted]
WalterBright 11y ago
Dividends and other distributions are taxed at normal income tax rates. You are likely thinking of long term capital gains taxes, which are something else entirely.
- beachstartup 11y ago
  no, i'm not. distributions are taxed at 'normal' rates, but if you are receiving non-w2 income, the amount of things you can deduct from that income are far and away more varied and comprehensive.

nkurz 11y ago

Do you know how the operating costs for BART compare to comparable systems in the US and internationally? And how cost of new construction compares? My guess is that both costs are on the high side, but I don't know any details.

shalmanese 11y ago
US infrastructure construction is routinely 3 - 10x more expensive [1][2][3] on a like-for-like basis compared to other developed nations. This is one of the biggest facts that even well educated people seem completely unaware of, despite it foundationally shaping the debate around infrastructure investment. The primary cause appears to be the way the US solicits and manages infrastructure projects which leads to massive bloat and inefficiency. [1] https://pedestrianobservations.wordpress.com/2011/05/16/us-rail-construction-costs/ https://pedestrianobservations.wordpress.com/2011/05/16/us-r... [2] https://pedestrianobservations.wordpress.com/2013/06/03/comparative-subway-construction-costs-revised/ https://pedestrianobservations.wordpress.com/2013/06/03/comp... [3] http://www.bloombergview.com/articles/2012-08-26/u-s-taxpayers-are-gouged-on-mass-transit-costs http://www.bloombergview.com/articles/2012-08-26/u-s-taxpaye...
- dcposch 11y ago
  > US infrastructure construction is routinely 3 - 10x more expensive on a like-for-like basis compared to other developed nations. > The primary cause appears to be the way the US solicits and manages infrastructure projects which leads to massive bloat and inefficiency. This is depressing. What can we, as voters or political donors or investors or entrepreneurs, do to fix it? The US has well organized and effective political advocacy groups for a number of causes. For example, there's one whose sole focus is maximizing people's gun rights. We need one for ending bureaucratic bloat, corruption, rent seeking and pork. A group whose sole goal is to fix government so we can get projects done cleanly and on time and at reasonable cost.
  - shalmanese 11y ago
    The problem is this is one of those issues that democracy has a hard time handling because it affects many people diffusely but almost nobody acutely.

Bahamut 11y ago

Where do you get 11% state tax from? Every California state income tax calculator I've seen for $150k-200k puts it at around 7.4% - 8% (sliding scale due to how California state taxes work). Not the lowest taxes still, but I'm bewildered as to where does some of this myth of the 10+% state income tax comes from.

nkurz 11y ago
Presumably he says 11% because the tax bracket for California incomes for $300K to $500K is 11.3%, and because he assume this is how much a surgeon in San Francisco makes. This does ignore the brackets, but he does note that he's discussing the marginal rate: https://www.ftb.ca.gov/forms/2015_California_Tax_Rates_and_Exemptions.shtml https://www.ftb.ca.gov/forms/2015_California_Tax_Rates_and_E... At a glance, this seems like a very reasonable estimate: How much does a Surgeon in San Francisco, CA make? The median annual Surgeon salary in San Francisco, CA is $435,890, as of February 22, 2016, with a range usually between $368,625-$517,331 not including bonus and benefit information and other factors that impact base pay." http://www1.salary.com/CA/San-Francisco/surgeon-salary.html http://www1.salary.com/CA/San-Francisco/surgeon-salary.html Where you do get your $150K-$200K estimate from?
- Bahamut 11y ago
  I was just using it as an example where the effective rate ends up nowhere near the rates people temd to talk about - I've seen a lot of prior talk about state taxes for engineers mentioning rates like that too, and did a quick lookup on online income tax calculators to make the point that effective state income tax rates in California are not as straightforward as looking up a % and quoting it.
sk5t 11y ago
Top marginal CA state tax rate appears to be 12.3%. $150-200k income is not surgeon/lawyer money in CA... think 400+.
- learc83 11y ago

learc83 11y ago

>Hong Kong has a 15% flat tax and yet they have vastly better infrastructure than we do. First, Hong Kong has such low taxes because the government makes most of their money by leasing and selling land. They don't need much to bring in as much tax revenue because of this. Their low tax rate has little to do with being more efficient or "prioritizing infrastructure." Second, why are you using the marginal tax rate for San Fransisco? You should be using the effective tax rate which is much much lower than 50%.

deleted 11y ago
[deleted]
eru 11y ago
The local government should institute a land value tax, then. That would bring in revenue, and have positive impact on the economy. (As opposed to almost all other taxes.)
- panglott 11y ago
  Land value taxes are interesting, but if you look at the communities that implemented them in the era of Henry George, most of those communities have abandoned them because it's difficult to administer over the long term a taxation system that's quite different from the norm, and the benefits may be fairly mild.
  - newjersey 11y ago
    Also, I think it taxes should try to be uniform across the nation. I find it smelly for Texas to try to attract business from California it worse, Kansas to steal businesses from Missouri by promising not just lower tax rates but effectively zero tax. Why is it not OK for China PR to manipulate the RMB but it is OK for Texas to lower worker rights to attract business? And no, I don't believe in this "laboratories of democracy" bs. There are things in which uniqueness is good but there are other times when we need a standard (you know like the Constitution and the bill if rights). Now, I'd be all for a low tax, maybe 0.1% (due annually) of property value so that someone who owns one million dollars of land and building will pay $1000 extra each year. I'd go further and say no exceptions (not even non profit or charity) just to illustrate a simple problem: we don't know how to do any redistribution. Should this new tax go directly to the county government to spend as they wish? Should it go to the state so they can take money from Lawrence and spend it in Kansas City, KS? Should it go to the federal government so it can spend more in Iowa than the tax raised from Iowa? I am just bringing this up because I've thought about the fetish among some people that everything would be OK if the federal government just backed off and let the state governments take charge. The problem is it wouldn't really fix the problem. I don't think Divide and conquer really works like this because we haven't divided the problem enough. Our States are too big themselves. I guess my main point is that as long as the tax rate is uniform across the whole system regardless of location, I could live with a small land/house tax not exceeding 0.1% of property value so that a person with a million dollar house pays $1000 each year. The problem is in how we spend this money. Does the money have to be spent in the same neighborhood? Town? County? State? Country?

superuser2 11y ago

>BART has tons of six figure salaries Six figures is table stakes for living in the Bay Area, and I certainly don't want to see the BART staffed by people who live so far away they don't even ride it.

amazon_not 11y ago
Now that's an interesting question. How many (six figure) employees of BART ride the BART to work?

technomancy 11y ago

Singapore's income taxes are low, but they tax newly purchased vehicles at significantly over 100%.

megablast 11y ago
Seems reasonable to me. They might come close to recouping the huge costs that cars actually cost.