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How is the current exceptional focus on taxes a productive policy? Taxes are investment in your (country/locality). While nobody likes the cost of investment, o

How is the current exceptional focus on taxes a productive policy? Taxes are investment in your (country/locality). While nobody likes the cost of investment, our lives and prosperity and everything else depends on it. And while some investments are worthwhile and some are not (just ask any VC!), to say we should minimize and avoid all investment is, of course, ridiculous. For example, nobody would suggest you minimize investment in your home unless you were leaving soon, or would advice YCombinator to minimize investment in startups unless they simple wanted to close out business now. You can't leave your country (or you must live somewhere) and it's never going out of business, you hope. Places with low investment (and taxes) in the U.S. and around the world generally have a lower quality of life and don't produce much beyond rent-seeking industries such as fossil fuels. Is the goal to model the U.S. economy on the great successes of places like Alabama,[0] or would it be better to model it on California or New York? Almost all leading industries, as well as education, arts and other things, are in high-investment places like California, New York, Michigan (automobile industry), etc. Successful people from low-investment areas move to high-investment areas to pursue their dreams, for straightforward economic reasons: that is where resources are. Tim Cook, from Mobile Alabama, comes to mind as well as the many entrepreneurs in SV from India. Almost nobody born in SV moves to Mobile to start their business. Smart kids from California go to Berkley, not U of Alabama, because the state has invested in higher education. The smartest kids from Mobile go to Berkley too (or to other leading universities in high-investment places). Poor countries are a simple example: They invest little out of necessity and their citizens are poorly educated and live harder and shorter lives. Under U.S. tax and investment policy, uniquely among wealthy countries life expectancy for Americans is now decreasing. [0] My apologies to Alabamans for using their state as a simplistic example of low-investment government. Of course there is much more to Alabama than that, and it's much more complicated than a simple number or stereotype. EDIT: some clarifications and enhancements

valuearb 8y ago
New York and California were not high tax states when they build the foundation of their wealth. And taxes aren’t an investment, and neither is most government spending. Most government spending is actually diverted to connected insiders.
- labster 8y ago
  [citation needed]
- forapurpose 8y ago
  California was not a high tax/investment state when SV was built and has boomed? New York wasn't during the boom of the financial industry (1980-now)?
  - scythe 8y ago
    I could believe the first. Income taxes became high in California only after Proposition 13. New York on the other hand has been the largest US city since the colonial era.
    - forapurpose 8y ago
      > Income taxes became high in California only after Proposition 13. Do you know of any data? I looked quickly online but with no luck. > New York on the other hand has been the largest US city since the colonial era. How is that related to tax rates?
    - s73v3r_ 8y ago
      But before then, weren't property taxes high?
  - valuearb 8y ago
    California was booming so hard in the 1950s that within a single decade three MLB teams moved there, two directly from New York City, and California got another as an expansion franchise. This was well before Silicon Valley was anything, well before the "traitorous eight". California's economy was growing like topsy from before the early Hollywood days in the 1920s. San Francisco was an immensely wealthy city before then, because of the gold rush. Even today California's economy is so huge that Silicon Valley is only a small slice of it.
stale2002 8y ago
> While nobody likes the cost of investment, our lives and prosperity and everything else depends on it. Yes, taxes are an investment. In the same way that putting money in your savings account is also an investment. But I wouldn't recommend that anyone keep all their money in a savings account. Every dollar that the state takes away from people, in order to invest in itself, that is one less dollar that each person has to decide how THEY would want that dollar to be invested. So higher taxes is not higher investment. It is a reduction in private investment, in exchange for a increase in public investment. Whether the world needs more private or more public investment is a matter of debate. > For example, nobody would suggest you minimize investment in your home unless you were leaving soon Well, that depends. If my choice is between paying off my credit cards, or investing in my house, I certainly believe that paying off my credit cards would be a better investment. Every dollar that I personally invest in my home is one less dollar that I am able to invest elsewhere. And those other investments may be a more pressing concern. Or they might not. Also, even IF it is "proved" that a public investment has better returns than a private one, you also need to take into account that you are taking money from someone else, and there are moral questions about how much money we should be taking from other people. I believe that it is OK to take some money from people, but certainly not all of it, regardless of how much better the public investment is. What that level should be is matter of debate. To take it to the extreme, even IF the government had some amazing investment that was better than all private investments, I would STILL oppose it if the government decided to take a full 100% of money from everyone. This is because I believe in private property, and that people are entitled to at least SOME of the profits of their efforts.
- xg15 8y ago
  > Every dollar that the state takes away from people, in order to invest in itself, that is one less dollar that each person has to decide how THEY would want that dollar to be invested. Indeed - because it's not necessarily an investment for one's own maximum gain - it's an investment in communal infrastructure where, yes, others might profit more from than you. However, in return, you might also profit from the contributions of others. > Also, even IF it is "proved" that a public investment has better returns than a private one, you also need to take into account that you are taking money from someone else, and there are moral questions about how much money we should be taking from other people. If we're starting with moral questions we should also discuss how morally justifiable it is to raise the price on products which buyers absolutely need but where they don't have an alternative. (E.g., recent pharmaceutical price hikes). This seems just as well "taking money from other people", except that it's done without any justification at all and, unlike taxes, you don't even in theory have any say about how high the prices should go or how the money is spent. > I believe that it is OK to take some money from people, but certainly not all of it Who was even proposing that?
deleted 8y ago
[deleted]
TangoTrotFox 8y ago
Poor countries are actually a great example. Vietnam for instance is an extremely poor nation. Their parity adjusted GDP/capita is $6,925. It's $2,305 nominal. They end up spending a paltry $450/capita party adjusted on education [2]. In the US we proudly spend $3,455/capita - upwards of 700% more. [1] This is a listing of nations in academic performance by PISA results. [2] This is a list of countries by how much they spend on education, if you'd like to compare other nations. Vietnam is not a single outlier. Vietnam is currently scoring 22nd in the world on math, and 7th in the world on science. The US is 41st on Math, 24th on science. And we spend more to anywhere in the world, excepting 3 nations, on education. You'll find Vietnam is not alone in this peculiar aspect. The correlation between government spending on education and educational performance is not particularly good. And people still think we need to substantially increase educational spending. This is really one of the fundamental problems with government. Everything is seen through the lens of money. Is something not performing well? You can solve it by just throwing more money at it! Of course this is not true. The spending tends to be wasteful at best, and completely ineffective at worst. The point I'm getting at here is that as you see these sort of results of spending across the range of government fields, being asked to give them large sums of your money to continue spending is one reason people can grow discouraged when being forced to give this government so much of their money. Or consider our completely pointless wars. The total cost for the Iraq war alone is going to end up in the trillions of dollars. And on top of all of this it seems that no matter how much the government increases their gross receipts, they still manage to dive ever deeper into debt. Again, that's not particularly encouraging. [1] - http://www.businessinsider.com/pisa-worldwide-ranking-of-math-science-reading-skills-2016-12 http://www.businessinsider.com/pisa-worldwide-ranking-of-mat... [2] - https://en.wikipedia.org/wiki/List_of_countries_by_spending_on_education_%28%25_of_GDP%29 https://en.wikipedia.org/wiki/List_of_countries_by_spending_...
- Firadeoclus 8y ago
  Given that education expenditure is mostly local (rather than, say, paying for imported commodities) there is little reason to compare dollar amounts. > This is really one of the fundamental problems with government. Everything is seen through the lens of money. That is the problem with government? I'd say this is the problem with a culture that sees everything outside the most personal through an economic lens. Government is not the exception here.
TangoTrotFox 8y ago
I think you may be conflating the directionality of success and "high-investment", to use your terminology. "High-investment" government tends to follow domestic success, not vice versa. For instance California is a phenomenally clear example of this. I assume you know what the San Francisco 49ers are named after? It was the California gold rush of 1848-1855. 49ers was a slang term for the miners. This gold rush created San Francisco. In 1846 California was a backwoods settlement of 200 people. In 1842, its population was 36,000 and it was booming as the primary port on the way to the gold rushes. California was the only state that was granted statehood (which happened in 1850) without first being a territory as the US raced to lay claim to its riches and successes. The Comstock Lode (silver's not quite as exciting as gold I guess) discovered in Nevada would further grow the city. Even getting down to Berkeley. The university was founded in 1869. You know all those Phoebe Hearst references around the campus? She was a huge early donor that helped really develop the college. And the money? She was the wife of George Hearst, who struck it rich during the gold/silver rushes. The cities (and state for that matter) were built from the ground up by the people, for the people. "High-investment" government only came much later.
- forapurpose 8y ago
  The entire Silicon Valley boom, through today, is under 'high-investment' > The cities (and state for that matter) were built from the ground up by the people, for the people. "High-investment" government only came much later. Democratic government is "by the people, for the people";. That was Abraham Lincoln's original quote: "government of the people, by the people, for the people". It's the people making decisions and investing in their community, fairly and democratically, instead of an aristocracy / oligarchy of a few wealthy people making the decisions.
  - d4rti 8y ago
    Silicon Valley was built on defence spending as chronicled by Steve Blank : https://steveblank.com/secret-history/ https://steveblank.com/secret-history/
    - 8y ago

valuearb 8y ago

New York and California were not high tax states when they build the foundation of their wealth. And taxes aren’t an investment, and neither is most government spending. Most government spending is actually diverted to connected insiders.

labster 8y ago
[citation needed]
forapurpose 8y ago
California was not a high tax/investment state when SV was built and has boomed? New York wasn't during the boom of the financial industry (1980-now)?
- scythe 8y ago
  I could believe the first. Income taxes became high in California only after Proposition 13. New York on the other hand has been the largest US city since the colonial era.
  - forapurpose 8y ago
    > Income taxes became high in California only after Proposition 13. Do you know of any data? I looked quickly online but with no luck. > New York on the other hand has been the largest US city since the colonial era. How is that related to tax rates?
  - s73v3r_ 8y ago
    But before then, weren't property taxes high?
- valuearb 8y ago
  California was booming so hard in the 1950s that within a single decade three MLB teams moved there, two directly from New York City, and California got another as an expansion franchise. This was well before Silicon Valley was anything, well before the "traitorous eight". California's economy was growing like topsy from before the early Hollywood days in the 1920s. San Francisco was an immensely wealthy city before then, because of the gold rush. Even today California's economy is so huge that Silicon Valley is only a small slice of it.

stale2002 8y ago

> While nobody likes the cost of investment, our lives and prosperity and everything else depends on it. Yes, taxes are an investment. In the same way that putting money in your savings account is also an investment. But I wouldn't recommend that anyone keep all their money in a savings account. Every dollar that the state takes away from people, in order to invest in itself, that is one less dollar that each person has to decide how THEY would want that dollar to be invested. So higher taxes is not higher investment. It is a reduction in private investment, in exchange for a increase in public investment. Whether the world needs more private or more public investment is a matter of debate. > For example, nobody would suggest you minimize investment in your home unless you were leaving soon Well, that depends. If my choice is between paying off my credit cards, or investing in my house, I certainly believe that paying off my credit cards would be a better investment. Every dollar that I personally invest in my home is one less dollar that I am able to invest elsewhere. And those other investments may be a more pressing concern. Or they might not. Also, even IF it is "proved" that a public investment has better returns than a private one, you also need to take into account that you are taking money from someone else, and there are moral questions about how much money we should be taking from other people. I believe that it is OK to take some money from people, but certainly not all of it, regardless of how much better the public investment is. What that level should be is matter of debate. To take it to the extreme, even IF the government had some amazing investment that was better than all private investments, I would STILL oppose it if the government decided to take a full 100% of money from everyone. This is because I believe in private property, and that people are entitled to at least SOME of the profits of their efforts.

xg15 8y ago
> Every dollar that the state takes away from people, in order to invest in itself, that is one less dollar that each person has to decide how THEY would want that dollar to be invested. Indeed - because it's not necessarily an investment for one's own maximum gain - it's an investment in communal infrastructure where, yes, others might profit more from than you. However, in return, you might also profit from the contributions of others. > Also, even IF it is "proved" that a public investment has better returns than a private one, you also need to take into account that you are taking money from someone else, and there are moral questions about how much money we should be taking from other people. If we're starting with moral questions we should also discuss how morally justifiable it is to raise the price on products which buyers absolutely need but where they don't have an alternative. (E.g., recent pharmaceutical price hikes). This seems just as well "taking money from other people", except that it's done without any justification at all and, unlike taxes, you don't even in theory have any say about how high the prices should go or how the money is spent. > I believe that it is OK to take some money from people, but certainly not all of it Who was even proposing that?

deleted 8y ago

[deleted]

TangoTrotFox 8y ago

Poor countries are actually a great example. Vietnam for instance is an extremely poor nation. Their parity adjusted GDP/capita is $6,925. It's $2,305 nominal. They end up spending a paltry $450/capita party adjusted on education [2]. In the US we proudly spend $3,455/capita - upwards of 700% more. [1] This is a listing of nations in academic performance by PISA results. [2] This is a list of countries by how much they spend on education, if you'd like to compare other nations. Vietnam is not a single outlier. Vietnam is currently scoring 22nd in the world on math, and 7th in the world on science. The US is 41st on Math, 24th on science. And we spend more to anywhere in the world, excepting 3 nations, on education. You'll find Vietnam is not alone in this peculiar aspect. The correlation between government spending on education and educational performance is not particularly good. And people still think we need to substantially increase educational spending. This is really one of the fundamental problems with government. Everything is seen through the lens of money. Is something not performing well? You can solve it by just throwing more money at it! Of course this is not true. The spending tends to be wasteful at best, and completely ineffective at worst. The point I'm getting at here is that as you see these sort of results of spending across the range of government fields, being asked to give them large sums of your money to continue spending is one reason people can grow discouraged when being forced to give this government so much of their money. Or consider our completely pointless wars. The total cost for the Iraq war alone is going to end up in the trillions of dollars. And on top of all of this it seems that no matter how much the government increases their gross receipts, they still manage to dive ever deeper into debt. Again, that's not particularly encouraging. [1] - http://www.businessinsider.com/pisa-worldwide-ranking-of-math-science-reading-skills-2016-12 http://www.businessinsider.com/pisa-worldwide-ranking-of-mat... [2] - https://en.wikipedia.org/wiki/List_of_countries_by_spending_on_education_%28%25_of_GDP%29 https://en.wikipedia.org/wiki/List_of_countries_by_spending_...

Firadeoclus 8y ago
Given that education expenditure is mostly local (rather than, say, paying for imported commodities) there is little reason to compare dollar amounts. > This is really one of the fundamental problems with government. Everything is seen through the lens of money. That is the problem with government? I'd say this is the problem with a culture that sees everything outside the most personal through an economic lens. Government is not the exception here.

TangoTrotFox 8y ago

I think you may be conflating the directionality of success and "high-investment", to use your terminology. "High-investment" government tends to follow domestic success, not vice versa. For instance California is a phenomenally clear example of this. I assume you know what the San Francisco 49ers are named after? It was the California gold rush of 1848-1855. 49ers was a slang term for the miners. This gold rush created San Francisco. In 1846 California was a backwoods settlement of 200 people. In 1842, its population was 36,000 and it was booming as the primary port on the way to the gold rushes. California was the only state that was granted statehood (which happened in 1850) without first being a territory as the US raced to lay claim to its riches and successes. The Comstock Lode (silver's not quite as exciting as gold I guess) discovered in Nevada would further grow the city. Even getting down to Berkeley. The university was founded in 1869. You know all those Phoebe Hearst references around the campus? She was a huge early donor that helped really develop the college. And the money? She was the wife of George Hearst, who struck it rich during the gold/silver rushes. The cities (and state for that matter) were built from the ground up by the people, for the people. "High-investment" government only came much later.

forapurpose 8y ago
The entire Silicon Valley boom, through today, is under 'high-investment' > The cities (and state for that matter) were built from the ground up by the people, for the people. "High-investment" government only came much later. Democratic government is "by the people, for the people";. That was Abraham Lincoln's original quote: "government of the people, by the people, for the people". It's the people making decisions and investing in their community, fairly and democratically, instead of an aristocracy / oligarchy of a few wealthy people making the decisions.
- d4rti 8y ago
  Silicon Valley was built on defence spending as chronicled by Steve Blank : https://steveblank.com/secret-history/ https://steveblank.com/secret-history/
  - 8y ago