8 ms·

>On the other hand, Silicon Valley money is made in California and draws on California services. Employees commute to work on taxpayer-funded roads and many stu

by pliny 8y ago

>On the other hand, Silicon Valley money is made in California and draws on California services. Employees commute to work on taxpayer-funded roads and many studied at taxpayer-funded schools. And one extreme example: When a gunman shot four people on the campus of YouTube last spring, it was San Bruno police that responded to the scene. This argument is scale invariant, you could say that any level of taxation justifies any level of services. The moral argument for not aggressively minimizing your tax burden has to pass through the question of how effective the state is at spending the money it collects, and so it must also depend on the question of how other states manage to do the same work the California Government does (having schools, roads and police) with much lower rates of income and sales tax and a much less smaller tax base.

cpursley 8y ago
> how effective the state is at spending the money Exactly! I'm okay with higher taxes as long as the jurisdictions who collect them are good stewards of the money. First, governments must prove to me that they can efficiency provide promised services before convincing me to hand over more. How is it that other nations/jurisdictions can have lower taxes than the USA, but still manage to provide for universal healthcare, free education, and a well funded military (Russia with a 13% flat tax and Singapore with a 22% top rate come to mind)? I just don't understand where the tax money is going in the USA at both federal and state levels. Why do we get such low value for our tax revenue? Also, my problem with tax systems is they are often about "punishment" and politics instead of providing government services...
- anonuser123456 8y ago
  >I just don't understand where the tax money is going in the USA at both federal and state levels. You can find it online with a simple Google search. Pensions, medicare and social security are the bulk of the spending.
  - pjc50 8y ago
    Two out of the three of those are deferred compensation and linked to earlier wage deductions.
    - castlecrasher2 8y ago
      Unless I'm mistaken and the national debt is actually the national assets, the money is obtained through taxes now rather than taxes before.
      - dragonwriter 8y ago
        > Unless I'm mistaken and the national debt is actually the national assets, the money is obtained through taxes now rather than taxes before. Well, the part of the national debt at issue (at least as regards Social Security and Medicare) is also part of the national assets; since “intragovernmental debt” sits on both sides of the balance sheet.
    - dragonwriter 8y ago
      All three are linked to earlier wage deductions, though one of them is in an extremely course grained way.
  - dragonwriter 8y ago
    > Pensions, medicare and social security are the bulk of the spending. In aggregate, less than half, even if you add Medicaid and other public health spending on top of Medicare, so not the bulk.
- pjc50 8y ago
  Singapore is in many ways the anti-America: it's a tiny low-freedom centrally planned one-party state. It earns a good deal of its money from transhipment and being a commercial hub. https://www.bbc.co.uk/news/business-32028693 https://www.bbc.co.uk/news/business-32028693 Russia is a petro-state run by the Mafia.
  - cpursley 8y ago
    Sure, those systems aren't perfect. I'm sure there's better examples (Switzerland, Uruguay). But they still manage to provide a situation where you're not stuck paying student loans for decades or go bankrupt because you happen to get sick. Why can't the USA, a nation with higher levels of freedom and transparency, provide the same despite collecting more tax revenue? I'm not convinced higher taxes is the answer; there's an efficiency problem. Solve that, then we can talk about raising taxes.
- yurymik 8y ago
  > Russia with a 13% flat tax That's a common misconception. Yes, personal tax rate is 13%, but your employer will have to pay for health insurance (5.1), social services (2.9), and pension fund (22). Overall, you get closer to 43% flat tax rate. The big difference is - you never see these moneys in the first place. Your paycheck is a net pay, all deducts are applied by the accounting department and only 13% rate is widely advertised as one the lowest in the world.
  - cpursley 8y ago
    Interesting, thanks for pointing this out. I have been considering becoming a Russian resident (and eventually citizen ~ yes, crazy). Do you know if self-employed people are liable for the other taxes you mentioned?
    - yurymik 8y ago
      There are several tax schemes available and depending on your situation (who pays your bills, employees, etc) you might be eligible for "УСН - упрощенная система налогообложения" (simplified tax system). You'll pay 6% from your income + 15% from your profit. Here's an article you might find interesting (in Russian of course): https://www.moedelo.org/club/article-knowledge/individualnyj-predprinimatel-vse-ob-ip-prostym-azykom https://www.moedelo.org/club/article-knowledge/individualnyj...
      - cpursley 8y ago
        Спасибо!
- dragonwriter 8y ago
  > How is it that other nations/jurisdictions can have lower taxes than the USA The US has substantially lower tax burden (share of GDP in taxes) than the OECD average, about 1/4 of GDP collared to about 1/3 as the OECD average. > Russia with a 13% flat tax Russia has a 13% flat income tax, but also has a national VAT (with different rates, not sure what the overall average is), and a social insurance tax that is regressive and has a rate of 26% up to about 3/4 of the median income.
pjc50 8y ago
> much lower rates of income and sales tax and a much less smaller tax base. What about property tax? Some of California's higher budget may be explained by higher property prices - employees need to be paid more for the same standard of living, government property purchases cost more, etc.
dragonwriter 8y ago
> so it must also depend on the question of how other states manage to do the same work the California Government does (having schools, roads and police) with much lower rates of income and sales tax and a much less smaller tax base. (1) They don't do the work the CA government does, which is why CA has a larger tax base. (2) They have higher property taxes; California has the third highest median home price of the 50 states plus DC, yet the 10th lowest tax bill on median priced home of the same 51 jurisdictions.
- masonic 8y ago
  the 10th lowest tax bill on median priced home of the same 51 jurisdictions You don't give a source, so it's unclear whether that figure accounts for Prop 13 effects or local added parcel taxes. The average of existing tax bills (with embedded Prop 13 reductions) is meaningless for comparing to new-property taxes in another state.
  - dragonwriter 8y ago
    > You don't give a source, so it's unclear whether that figure accounts for Prop 13 effects Since Prop 13 both sets the maximum rate of property tax and sets the procedural requirements for increasing any tax in California, everything about property tax in California is “Prop 13 effects.” I suspect what you mean is “effects of the Prop 13 limits on annual assessment increases”. > The average of existing tax bills (with embedded Prop 13 reductions) is meaningless for comparing to new-property taxes in another state. The point wasn't comparing new-property taxes, it was addressing “how other states manage to do the same work the California Government does (having schools, roads and police) with much lower rates of income and sales tax and a much less smaller [sic] tax base.” One of the ways they do it is by having higher property taxes. Often at effective tax rates higher than the prop 13 limit on nominal rates, even before the effect of assessment limits. (And, in the broader context of the thread, consideration of moving out of California, if the alternative is staying in place in California, property taxes with the Prop 13 assessment limit are absolutely the right comparison with new-home taxes in other states.)
    - 8y ago

by pliny 8y ago

cpursley 8y ago

> how effective the state is at spending the money Exactly! I'm okay with higher taxes as long as the jurisdictions who collect them are good stewards of the money. First, governments must prove to me that they can efficiency provide promised services before convincing me to hand over more. How is it that other nations/jurisdictions can have lower taxes than the USA, but still manage to provide for universal healthcare, free education, and a well funded military (Russia with a 13% flat tax and Singapore with a 22% top rate come to mind)? I just don't understand where the tax money is going in the USA at both federal and state levels. Why do we get such low value for our tax revenue? Also, my problem with tax systems is they are often about "punishment" and politics instead of providing government services...

anonuser123456 8y ago
>I just don't understand where the tax money is going in the USA at both federal and state levels. You can find it online with a simple Google search. Pensions, medicare and social security are the bulk of the spending.
- pjc50 8y ago
  Two out of the three of those are deferred compensation and linked to earlier wage deductions.
  - castlecrasher2 8y ago
    Unless I'm mistaken and the national debt is actually the national assets, the money is obtained through taxes now rather than taxes before.
    - dragonwriter 8y ago
      > Unless I'm mistaken and the national debt is actually the national assets, the money is obtained through taxes now rather than taxes before. Well, the part of the national debt at issue (at least as regards Social Security and Medicare) is also part of the national assets; since “intragovernmental debt” sits on both sides of the balance sheet.
  - dragonwriter 8y ago
    All three are linked to earlier wage deductions, though one of them is in an extremely course grained way.
- dragonwriter 8y ago
  > Pensions, medicare and social security are the bulk of the spending. In aggregate, less than half, even if you add Medicaid and other public health spending on top of Medicare, so not the bulk.
pjc50 8y ago
Singapore is in many ways the anti-America: it's a tiny low-freedom centrally planned one-party state. It earns a good deal of its money from transhipment and being a commercial hub. https://www.bbc.co.uk/news/business-32028693 https://www.bbc.co.uk/news/business-32028693 Russia is a petro-state run by the Mafia.
- cpursley 8y ago
  Sure, those systems aren't perfect. I'm sure there's better examples (Switzerland, Uruguay). But they still manage to provide a situation where you're not stuck paying student loans for decades or go bankrupt because you happen to get sick. Why can't the USA, a nation with higher levels of freedom and transparency, provide the same despite collecting more tax revenue? I'm not convinced higher taxes is the answer; there's an efficiency problem. Solve that, then we can talk about raising taxes.
yurymik 8y ago
> Russia with a 13% flat tax That's a common misconception. Yes, personal tax rate is 13%, but your employer will have to pay for health insurance (5.1), social services (2.9), and pension fund (22). Overall, you get closer to 43% flat tax rate. The big difference is - you never see these moneys in the first place. Your paycheck is a net pay, all deducts are applied by the accounting department and only 13% rate is widely advertised as one the lowest in the world.
- cpursley 8y ago
  Interesting, thanks for pointing this out. I have been considering becoming a Russian resident (and eventually citizen ~ yes, crazy). Do you know if self-employed people are liable for the other taxes you mentioned?
  - yurymik 8y ago
    There are several tax schemes available and depending on your situation (who pays your bills, employees, etc) you might be eligible for "УСН - упрощенная система налогообложения" (simplified tax system). You'll pay 6% from your income + 15% from your profit. Here's an article you might find interesting (in Russian of course): https://www.moedelo.org/club/article-knowledge/individualnyj-predprinimatel-vse-ob-ip-prostym-azykom https://www.moedelo.org/club/article-knowledge/individualnyj...
    - cpursley 8y ago
      Спасибо!
dragonwriter 8y ago
> How is it that other nations/jurisdictions can have lower taxes than the USA The US has substantially lower tax burden (share of GDP in taxes) than the OECD average, about 1/4 of GDP collared to about 1/3 as the OECD average. > Russia with a 13% flat tax Russia has a 13% flat income tax, but also has a national VAT (with different rates, not sure what the overall average is), and a social insurance tax that is regressive and has a rate of 26% up to about 3/4 of the median income.

pjc50 8y ago

> much lower rates of income and sales tax and a much less smaller tax base. What about property tax? Some of California's higher budget may be explained by higher property prices - employees need to be paid more for the same standard of living, government property purchases cost more, etc.

dragonwriter 8y ago

> so it must also depend on the question of how other states manage to do the same work the California Government does (having schools, roads and police) with much lower rates of income and sales tax and a much less smaller tax base. (1) They don't do the work the CA government does, which is why CA has a larger tax base. (2) They have higher property taxes; California has the third highest median home price of the 50 states plus DC, yet the 10th lowest tax bill on median priced home of the same 51 jurisdictions.

masonic 8y ago
the 10th lowest tax bill on median priced home of the same 51 jurisdictions You don't give a source, so it's unclear whether that figure accounts for Prop 13 effects or local added parcel taxes. The average of existing tax bills (with embedded Prop 13 reductions) is meaningless for comparing to new-property taxes in another state.
- dragonwriter 8y ago
  > You don't give a source, so it's unclear whether that figure accounts for Prop 13 effects Since Prop 13 both sets the maximum rate of property tax and sets the procedural requirements for increasing any tax in California, everything about property tax in California is “Prop 13 effects.” I suspect what you mean is “effects of the Prop 13 limits on annual assessment increases”. > The average of existing tax bills (with embedded Prop 13 reductions) is meaningless for comparing to new-property taxes in another state. The point wasn't comparing new-property taxes, it was addressing “how other states manage to do the same work the California Government does (having schools, roads and police) with much lower rates of income and sales tax and a much less smaller [sic] tax base.” One of the ways they do it is by having higher property taxes. Often at effective tax rates higher than the prop 13 limit on nominal rates, even before the effect of assessment limits. (And, in the broader context of the thread, consideration of moving out of California, if the alternative is staying in place in California, property taxes with the Prop 13 assessment limit are absolutely the right comparison with new-home taxes in other states.)
  - 8y ago