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The “reasonable taxes” in many places depend on large-scale transfers at the state/federal level from places like SF. But this pandemic is going to be crushing

The “reasonable taxes” in many places depend on large-scale transfers at the state/federal level from places like SF. But this pandemic is going to be crushing state and municipal budgets across the country, and many of the worst-hit places will be rural and exurban.

nimish 6y ago
Nah, the spending power of the federal government, and the tax collection of the federal government are not linked. So long as the fed can print money the federal government can spend. It cares not about the states or how much income tax flows in. Hence, it can run up structural deficits until faith is lost in the $ (inflation). State governments, on the other hand, cannot print money. They must operate in a zero-sum mode.
- jacobolus 6y ago
  Yes, the federal government could bail out state and local governments (and indeed that’s some of what the Heroes Act does – passed by the House in May). But the GOP Senate intransigently refuses to act or even negotiate, and so state/local governments are getting crushed.
  - nimish 6y ago
    Well good? The federal government has no obligation to bail out the states That's a political decision and the gop has decided to let the states that need bailouts diy it. I don't think it's wise, but it sure is within gop policy aims
flurben 6y ago
You seriously think that everywhere in America with reasonable tax rates is just getting fiscal transfers from SF?
- jacobolus 6y ago
  Personally I don’t think “low taxes” are “reasonable”. We live in a complicated society and we all benefit when we collectively pay people to do a huge variety of important jobs which are hard to fit into a pure-profit system. Cutting funding for those exposes us to a wide variety of risks and eliminates many future opportunities, in the long term harming us all. The Covid pandemic is a perfect case study in the way that e.g. public health infrastructure, expertise, and political support can save hundreds of thousands of lives. (While we are talking about San Francisco here, it’s worth noting that SF and the Bay Area has done by far the best of any US city / metro area at containing Covid and preventing needless deaths of residents, despite some failure especially early to properly target testing resources toward poor/minority areas full of “essential workers”.) But infectious diseases are only one of the many risks that individual people cannot adequately understand and protect against on a personal basis, for which it helps to have collectively funded public institutions. Instead of income or property taxes, some places raise money via sales taxes instead, or other regressive schemes. Some places raise money by questionable fines on their own residents. Some places make money off the back of wanton environmental destruction. Some just accept shoddy local services. (When you compare the US to other wealthy nations, it’s really shocking how poor our basic infrastructure and public services are, even in the richest US states and cities.) But most low-tax areas of the US are substantially supported by federal-level transfers, for example from federal highway budget, from military bases and defense contracting located there, from federal agriculture subsidies, from federal welfare and healthcare funding, from social security payments to people who retired somewhere different than they lived while actively working, ...
  - dave_4_bagels 6y ago
    Haven't you heard of property taxes? And are we really going to pretend that "high-tax" blue states don't take federal funds? Your post here makes it sound like you should move to a basically socialist European country and stop complaining.
  - ThenAsNow 6y ago
    There are really two axes that everyone seems to conflate into one. There is funding, as in whether or not there is sufficient funding to achieve certain outcomes. Then there is competence, as in managing the resources to achieve certain outcomes. Both are necessary but neither sufficient by themselves, only together. The U.S. seems to be stuck in a loop wherein the available funds are argued about endlessly, and everybody acts as if that's the only dimension about which to speak and win. Not nearly enough is done to boost competence in the government sector. I think this is plenty true even if we set aside the current U.S. administration in which a number of federal entities are headed by naked toadies (to be fair, it's certainly not true of all federal organizations even now). I tend to agree with you that the U.S. is probably not taxing enough for consistently high-quality outcomes in areas where the government is responsible. Yet I'm sympathetic to those that point to places where tax rates are high and so is wastefulness. But when the only lever it seems that can be pulled is on the revenue/spending, it's no wonder the correlation between that lever position and good outcomes is low - it ignores the competence with which any of those funds are managed. I think it's entirely possible to have competent government if that is made a priority and addressed with some flexibility.

nimish 6y ago

Nah, the spending power of the federal government, and the tax collection of the federal government are not linked. So long as the fed can print money the federal government can spend. It cares not about the states or how much income tax flows in. Hence, it can run up structural deficits until faith is lost in the $ (inflation). State governments, on the other hand, cannot print money. They must operate in a zero-sum mode.

jacobolus 6y ago
Yes, the federal government could bail out state and local governments (and indeed that’s some of what the Heroes Act does – passed by the House in May). But the GOP Senate intransigently refuses to act or even negotiate, and so state/local governments are getting crushed.
- nimish 6y ago
  Well good? The federal government has no obligation to bail out the states That's a political decision and the gop has decided to let the states that need bailouts diy it. I don't think it's wise, but it sure is within gop policy aims

flurben 6y ago

You seriously think that everywhere in America with reasonable tax rates is just getting fiscal transfers from SF?

jacobolus 6y ago
Personally I don’t think “low taxes” are “reasonable”. We live in a complicated society and we all benefit when we collectively pay people to do a huge variety of important jobs which are hard to fit into a pure-profit system. Cutting funding for those exposes us to a wide variety of risks and eliminates many future opportunities, in the long term harming us all. The Covid pandemic is a perfect case study in the way that e.g. public health infrastructure, expertise, and political support can save hundreds of thousands of lives. (While we are talking about San Francisco here, it’s worth noting that SF and the Bay Area has done by far the best of any US city / metro area at containing Covid and preventing needless deaths of residents, despite some failure especially early to properly target testing resources toward poor/minority areas full of “essential workers”.) But infectious diseases are only one of the many risks that individual people cannot adequately understand and protect against on a personal basis, for which it helps to have collectively funded public institutions. Instead of income or property taxes, some places raise money via sales taxes instead, or other regressive schemes. Some places raise money by questionable fines on their own residents. Some places make money off the back of wanton environmental destruction. Some just accept shoddy local services. (When you compare the US to other wealthy nations, it’s really shocking how poor our basic infrastructure and public services are, even in the richest US states and cities.) But most low-tax areas of the US are substantially supported by federal-level transfers, for example from federal highway budget, from military bases and defense contracting located there, from federal agriculture subsidies, from federal welfare and healthcare funding, from social security payments to people who retired somewhere different than they lived while actively working, ...
- dave_4_bagels 6y ago
  Haven't you heard of property taxes? And are we really going to pretend that "high-tax" blue states don't take federal funds? Your post here makes it sound like you should move to a basically socialist European country and stop complaining.
- ThenAsNow 6y ago
  There are really two axes that everyone seems to conflate into one. There is funding, as in whether or not there is sufficient funding to achieve certain outcomes. Then there is competence, as in managing the resources to achieve certain outcomes. Both are necessary but neither sufficient by themselves, only together. The U.S. seems to be stuck in a loop wherein the available funds are argued about endlessly, and everybody acts as if that's the only dimension about which to speak and win. Not nearly enough is done to boost competence in the government sector. I think this is plenty true even if we set aside the current U.S. administration in which a number of federal entities are headed by naked toadies (to be fair, it's certainly not true of all federal organizations even now). I tend to agree with you that the U.S. is probably not taxing enough for consistently high-quality outcomes in areas where the government is responsible. Yet I'm sympathetic to those that point to places where tax rates are high and so is wastefulness. But when the only lever it seems that can be pulled is on the revenue/spending, it's no wonder the correlation between that lever position and good outcomes is low - it ignores the competence with which any of those funds are managed. I think it's entirely possible to have competent government if that is made a priority and addressed with some flexibility.