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> income taxes are not cost-of-living adjusted Well, this is another issue. It's incoherent, honestly, that someone can be considered both rich and poor from t

by xaa 9y ago

> income taxes are not cost-of-living adjusted Well, this is another issue. It's incoherent, honestly, that someone can be considered both rich and poor from the federal perspective. But in the end, a COL adjustment on income tax would be equivalent to the type of subsidy in question. - The diplomatic, covert, and military apparatus which dominates the world to the extent necessary to secure the flow of cheap oil for your car. lel. If that was ever true, which I doubt, it isn't any more. If there was ever a point that our military paid for itself (even on the margin) in terms of cheaper oil, I'll eat my hat. > Welfare so that unemployed people can stay in dead-end towns, instead of moving to where they are needed. This is really the core of it. If people are really needed, economically and relatively to elsewhere, in supercities, then supercities will pay enough for them to live there. Ergo, you are overstating how much they are needed. This is exactly analogous to employers claiming there is a "shortage" of programmers, but they aren't willing to raise wages. Besides, am I to believe that there are no unemployed people on welfare in cities? I don't know what the relative rate is. I do agree people should be incentivized to move where they are needed. We may have different views on where that is, exactly. Any kind of welfare distorts economic "need" signals, which is a big downside of it. Imagining welfare or wealth transfers didn't exist, I'd say that the place where people are most "needed" is a place where benefits of living - COL is highest. I have no data on where that might be, but I doubt SV ranks high on the list unless you are a programmer. By that metric I would imagine that there would be a dynamic equilibrium between urbanization and countryside, as there is now. In some ways, SV programmers defending subsidies for service workers in SV sounds like "please subsidize my $10 latte and Whole Foods bill". > the low-density regions they enable This is pretty creative. If cities had to grow their own food and extract their own natural resources, I think they'd have quite a problem, yes? It may be fair to say cities & countryside are codependent, but the idea that cities are one-sidedly enabling everyone else is not credible. It is quite likely that there is a net transfer of wealth from cities to the countryside. The reason I would argue this is "fair" is because people in the cities are also the primary beneficiaries of GDP growth. BTW, I don't live in the country, I live in a medium-sized city. I am limiting my criticisms to cities that have so poorly planned expansion, or are so crowded, that the COL is sky-high, and they want a bailout from everyone else.

closeparen 9y ago
>If there was ever a point that our military paid for itself (even on the margin) in terms of cheaper oil Of course it doesn't pay for itself. Cities with their GDP growth pay for it (financially), and exurbs with their cheap sprawling subdivisions and giant SUVs benefit from it. People are most needed where they would create the most value, regardless of cost of living. Let's say your programming labor would be worth $120k/year ($40k in taxes) in San Francisco, but you're stuck making $50k/year ($10k in taxes) in Indianapolis because San Francisco would still be a net less for you. Your not being in San Francisco costs the government $30k/year. Any subsidy below $30k/year that gets you to that more productive job is profitable for the taxpayer. Now imagine someone who costs taxpayers $20k/year in Appalachia, but could generate $30k/year ($5k in taxes) as a barista at the Googleplex. It's still worth any price below $25k to get her to Mountain View. Of course, these subsidies might just arm you (and the barista) to displace other, also productive Bay Area residents, resulting in no net change. There would also have to be a zoning policy intervention to create new units. I do agree that high and low density regions are codependent, and subsidies are appropriate in both directions. I simply argue that subsidies to get people to high-productivity cities are much less costly (they can even be profitable!) than subsidies to help people stay in low-productivity situations.
- xaa 9y ago
  > exurbs with their cheap sprawling subdivisions and giant SUVs benefit from it I guess I'm with you to the extent this means they "recoup a larger proportion of their losses on these pointless endeavors". > Your not being in San Francisco costs the government $30k/year. Any subsidy below $30k/year that gets you to that more productive job is profitable for the taxpayer. With this I agree, although it seems at odds with what I think you were saying earlier, that tax should be COL-adjusted. If this were the case, it would no longer be true. > People are most needed where they would create the most value, regardless of cost of living. Nope! True, this would be best from the government's perspective. From the individual's perspective, it is most rational to live where they have the biggest surplus of wages over costs. Doesn't do you much good to make $1M if it's $1.5M for a crappy apartment and basic food. Unless you are separating the concept of "people are needed most at X" from the concept of "it is most economically rational to live at X". > imagine someone who costs taxpayers $20k/year in Appalachia, but could generate $30k/year ($5k in taxes) as a barista at the Googleplex OK, yes, but this sets up a mostly false dichotomy between "employed in SV (etc)" or "unemployed in Appalachia". There are a lot of places in the US that are less dysfunctional than either one of those two places. > I simply argue that subsidies to get people to high-productivity cities are much less costly (they can even be profitable!) than subsidies to help people stay in low-productivity situations. It just seems self-contradictory. You say that people in SV pay more tax than people not in SV. That's right. But then you say people in SV should be subsidized, which removes the logical basis you're using to argue they should be there in the first place. It is helpful to remember that subsidizing someone's COL in a low-cost area is by definition going to cost less than someone in a high-cost area. In short, if we HAVE to subsidize people a lot, then we should subsidize them to live in Appalachia, not SV. But if only a little (i.e., they still pay tax in net), then it could make economic sense to subsidize people in SV. Ironically, by this logic, it makes more sense to subsidize the $90K person in SV than the $30K person.

by xaa 9y ago

closeparen 9y ago

>If there was ever a point that our military paid for itself (even on the margin) in terms of cheaper oil Of course it doesn't pay for itself. Cities with their GDP growth pay for it (financially), and exurbs with their cheap sprawling subdivisions and giant SUVs benefit from it. People are most needed where they would create the most value, regardless of cost of living. Let's say your programming labor would be worth $120k/year ($40k in taxes) in San Francisco, but you're stuck making $50k/year ($10k in taxes) in Indianapolis because San Francisco would still be a net less for you. Your not being in San Francisco costs the government $30k/year. Any subsidy below $30k/year that gets you to that more productive job is profitable for the taxpayer. Now imagine someone who costs taxpayers $20k/year in Appalachia, but could generate $30k/year ($5k in taxes) as a barista at the Googleplex. It's still worth any price below $25k to get her to Mountain View. Of course, these subsidies might just arm you (and the barista) to displace other, also productive Bay Area residents, resulting in no net change. There would also have to be a zoning policy intervention to create new units. I do agree that high and low density regions are codependent, and subsidies are appropriate in both directions. I simply argue that subsidies to get people to high-productivity cities are much less costly (they can even be profitable!) than subsidies to help people stay in low-productivity situations.

xaa 9y ago
> exurbs with their cheap sprawling subdivisions and giant SUVs benefit from it I guess I'm with you to the extent this means they "recoup a larger proportion of their losses on these pointless endeavors". > Your not being in San Francisco costs the government $30k/year. Any subsidy below $30k/year that gets you to that more productive job is profitable for the taxpayer. With this I agree, although it seems at odds with what I think you were saying earlier, that tax should be COL-adjusted. If this were the case, it would no longer be true. > People are most needed where they would create the most value, regardless of cost of living. Nope! True, this would be best from the government's perspective. From the individual's perspective, it is most rational to live where they have the biggest surplus of wages over costs. Doesn't do you much good to make $1M if it's $1.5M for a crappy apartment and basic food. Unless you are separating the concept of "people are needed most at X" from the concept of "it is most economically rational to live at X". > imagine someone who costs taxpayers $20k/year in Appalachia, but could generate $30k/year ($5k in taxes) as a barista at the Googleplex OK, yes, but this sets up a mostly false dichotomy between "employed in SV (etc)" or "unemployed in Appalachia". There are a lot of places in the US that are less dysfunctional than either one of those two places. > I simply argue that subsidies to get people to high-productivity cities are much less costly (they can even be profitable!) than subsidies to help people stay in low-productivity situations. It just seems self-contradictory. You say that people in SV pay more tax than people not in SV. That's right. But then you say people in SV should be subsidized, which removes the logical basis you're using to argue they should be there in the first place. It is helpful to remember that subsidizing someone's COL in a low-cost area is by definition going to cost less than someone in a high-cost area. In short, if we HAVE to subsidize people a lot, then we should subsidize them to live in Appalachia, not SV. But if only a little (i.e., they still pay tax in net), then it could make economic sense to subsidize people in SV. Ironically, by this logic, it makes more sense to subsidize the $90K person in SV than the $30K person.