4 ms·

Fair point. Perhaps some things get more standardized across regions, like income tax, and other things stay geographically defined. A balance between standardi

Fair point. Perhaps some things get more standardized across regions, like income tax, and other things stay geographically defined. A balance between standardization and localization. But overall, I have no idea. Just seems as if government hasn't known how to handle very well things that happen across geographic boundaries. Maybe that's because government is geographically bound. If I sell a digital file online, if someone buys it in Spain, Germany, France, and Italy, I have to collect and submit VAT at four different rates for just four customers. I'm not sure what the answers are, just really hoping we start discussing this as a society, because things may become even more geographically independent.

bobthepanda 6y ago
(Some) government services and their beneficiaries are geographically bound, so it makes sense that the fundraising for such services is also geographically bound. On the face of it, this makes sense. Some services will always be locally bound, because things like police or fire wouldn't make much sense at a federal level; why should someone in Billings have input on policing in New York City, or vice versa? Should someone in Cork have say on how Bucharest is handling garbage pickup? Whether or not the current legal subregion boundaries (for the US, the states) make much sense is another story, but the Founders were of the opinion that the imperfect state borders would be preferable to having the federal government exercise complete control lest it fall into the hands of a tyrant.
- jimkleiber 6y ago
  I really like those points. At the end of the day, the local government charges money (taxes) to provide services (police, fire, etc), and yeah, many of those are like local businesses. Local people pay to receive local services. I guess I'm just wondering if they have to pay for those local services through income tax and not some other tax (e.g., property, road, sales) that would be more local. Just seems to me that income tax is local when someone is physically performing work at the place of labor (e.g., factory, store) and confuses me when it's done more virtually. I guess I technically work on my computer in a location, so then yes, where I physically type could be the location of income. I don't know. I also think health insurance being state-based and employer-based, and just imagine the level of complications that HR will have to deal with.
  - bobthepanda 6y ago
    It's reasons like this why I think the post-COVID death of the high-COL city is greatly exaggerated. Because we live in a federal system, the definition of what is "locally" taxable and what is not varies betweens states, and at a global level this varies between countries (the US taxes global income, which is uncommon), and obviously these entities are not inclined to do things that would reduce their funding. Even if they could reduce some taxes and raise others to make up for it and the end result made "more sense", how to raise others is a big fight in and of itself, and so they usually don't go through the bother of debating all of this. These types of debates have already happened to some degree; a lot of New Jersey residents work in New York, and the way the dust has currently settled is that New Jersey will credit income tax paid in NY by NJ residents. Not everyone is happy with this arrangement, and whether or not it is working optimally could be debated until the heat death of the universe, but it is a valid allocation of resources that is working at some minimal level. This will probably blow up now that remote work enables a nearly endless combination of jurisdictional fights.
    - jimkleiber 6y ago
      Yes, i love these points especially the last one. With remote, it’s no longer just two neighboring regions but so many different possible combinations.
gamblor956 6y ago
Your VAT example is wrong. You would not reach minimum thresholds for VAT compliance on the basis in a single sale of a digital good into a foreign country.
- jimkleiber 6y ago
  Ahh, thank you! Good point. I’ll change my rhetoric on this. I just checked the minimum thresholds and the lowest one I found in Europe was Finland at €10,000, with almost every country having a different threshold. So yes, unless it were a very expensive digital good, then one sale wouldn’t do it. I think the logic still applies, in that when I sell it here from my home in the US, I’m supposed to track and monitor who in which countries are buying how much and then stay up to date on all the tax laws of all those countries.

bobthepanda 6y ago

(Some) government services and their beneficiaries are geographically bound, so it makes sense that the fundraising for such services is also geographically bound. On the face of it, this makes sense. Some services will always be locally bound, because things like police or fire wouldn't make much sense at a federal level; why should someone in Billings have input on policing in New York City, or vice versa? Should someone in Cork have say on how Bucharest is handling garbage pickup? Whether or not the current legal subregion boundaries (for the US, the states) make much sense is another story, but the Founders were of the opinion that the imperfect state borders would be preferable to having the federal government exercise complete control lest it fall into the hands of a tyrant.

jimkleiber 6y ago
I really like those points. At the end of the day, the local government charges money (taxes) to provide services (police, fire, etc), and yeah, many of those are like local businesses. Local people pay to receive local services. I guess I'm just wondering if they have to pay for those local services through income tax and not some other tax (e.g., property, road, sales) that would be more local. Just seems to me that income tax is local when someone is physically performing work at the place of labor (e.g., factory, store) and confuses me when it's done more virtually. I guess I technically work on my computer in a location, so then yes, where I physically type could be the location of income. I don't know. I also think health insurance being state-based and employer-based, and just imagine the level of complications that HR will have to deal with.
- bobthepanda 6y ago
  It's reasons like this why I think the post-COVID death of the high-COL city is greatly exaggerated. Because we live in a federal system, the definition of what is "locally" taxable and what is not varies betweens states, and at a global level this varies between countries (the US taxes global income, which is uncommon), and obviously these entities are not inclined to do things that would reduce their funding. Even if they could reduce some taxes and raise others to make up for it and the end result made "more sense", how to raise others is a big fight in and of itself, and so they usually don't go through the bother of debating all of this. These types of debates have already happened to some degree; a lot of New Jersey residents work in New York, and the way the dust has currently settled is that New Jersey will credit income tax paid in NY by NJ residents. Not everyone is happy with this arrangement, and whether or not it is working optimally could be debated until the heat death of the universe, but it is a valid allocation of resources that is working at some minimal level. This will probably blow up now that remote work enables a nearly endless combination of jurisdictional fights.
  - jimkleiber 6y ago
    Yes, i love these points especially the last one. With remote, it’s no longer just two neighboring regions but so many different possible combinations.

gamblor956 6y ago

Your VAT example is wrong. You would not reach minimum thresholds for VAT compliance on the basis in a single sale of a digital good into a foreign country.

jimkleiber 6y ago
Ahh, thank you! Good point. I’ll change my rhetoric on this. I just checked the minimum thresholds and the lowest one I found in Europe was Finland at €10,000, with almost every country having a different threshold. So yes, unless it were a very expensive digital good, then one sale wouldn’t do it. I think the logic still applies, in that when I sell it here from my home in the US, I’m supposed to track and monitor who in which countries are buying how much and then stay up to date on all the tax laws of all those countries.