5 ms·

When taxes favor making money with money than labor why would anyone want to work? Labor should be tax free or low and capital gain should be taxed high. Time

When taxes favor making money with money than labor why would anyone want to work? Labor should be tax free or low and capital gain should be taxed high. Time is more valuable than money and taxes should reflect that.

chacham15 6y ago
> Time is more valuable than money and taxes should reflect that. I understand the sentiment, but it literally isnt true. If it were, then noone would accept a job since they'd rather have the time instead. At the very least, there is more nuance to be observed here.
- bigyikes 6y ago
  I would gladly take a pay cut if my job let me work less time.
  - the_lonely_road 6y ago
    Seconded. If I could keep my career security (I will still be employed here 10 years from now unless black swan) and healthcare (no spouse) while cutting pay and hours in half I would take it in a HEARTBEAT. No one is offering that.
    - misterremote 6y ago
      But shouldn’t that be totally doable? What’s the argument against that by the employer? Because pay is also 50%
      - malloreon 6y ago
        there are costs to employing someone that don't vary with number of hours worked. The person you're responding to wants 100% of their current healthcare plan but only half the salary/expected hours, for example.
      - WJW 6y ago
        Many of the overhead costs scale as a function of headcount irrespective of how many hours each employee works. For example, let's say you work in a regulated industry where each employee needs to follow a certain training every year. Having twice as many employees each working 20 hrs will double the training costs. Management overhead will also go up since there will be more one-on-ones etc.
      - sfotm 6y ago
        There are some issues that I think would make this difficult to do: - Two employees at 50% salary and time are not equivalent to a single employee at 100% of salary. They're strictly worse if always run in series, all else being equal. Alice starts project X on Monday and Tuesday, and hands it off to Bob on Wednesday because it's urgent. There's some inefficiency there. Good management could help avoid it, but would be hard-pressed to prevent it in all cases. At best, it's one more thing to worry about. - There are benefits outside of your salary that are more difficult to cut in half. Health plans, headcount taxes, etc. That being said, there are some experiments being done (not at 50%): https://www.amazon.jobs/en/landing_pages/part-time-tech https://www.amazon.jobs/en/landing_pages/part-time-tech
        misterremote 6y ago
        Ok, I see. I guess if company feels that the talent is very valuable to them, it's possible to negotiate special terms like this, but I guess in general companies are not then interested in part-time roles yeah. I'm actually planning to cut my time in half, but keep the same pay. My story was discussed here on HN yesterday/today: https://news.ycombinator.com/item?id=27133376 https://news.ycombinator.com/item?id=27133376 Long story short: As the startup I'm working at doesn't have enough money to raise my hourly price, I'm now proposing to cut my hours in half, but keep the pay. So I'm working half the time, but keep the pay. It's summer now, so I'm happy to spend more time with friends and family. And while we're talking about working less, another thing that's interesting I think is "4-day work weeks". There are remote companies who work 32h per week. I even made a list of the ones I know, but I'm sure there are more: https://remotehunt.com/remote-companies-with-4-day-work-weeks https://remotehunt.com/remote-companies-with-4-day-work-week...
      - abetterday 6y ago
        Aside from fixed costs and aspects like coordination efficiency, companies have to raise pay more than linearly to get people into high hours jobs. Those disproportionate gains should be given back at cut hours, but too many employees would claim this is unfair. I wrote about this a while back: https://www.growwiser.com/2011/11/27/less-work-for-less-pay-why-dont-companies-offer-the-option/ https://www.growwiser.com/2011/11/27/less-work-for-less-pay-...
    - _dps 6y ago
      This kind of flexibility is one of the advantages of consulting/freelancing. Obviously the career security aspect is different, but in a hot hiring market there isn't a shortage of opportunities. I know several people who, as they got to more senior levels, decided to work 50% of the time for roughly 60% of their previous salary.
  - pixelpoet 6y ago
    Come to Germany, where companies over a certain size (# of employees) literally cannot deny your request to work part-time: https://www.globaladvocaten.com/blog/labour-law-parttime-work-in-germany https://www.globaladvocaten.com/blog/labour-law-parttime-wor... Be warned though, you won't make the same batshit insane US salary here.
  - langitbiru 6y ago
    Maybe you can find one here: https://parttime.careers https://parttime.careers
- kissickas 6y ago
  Neither of those things have units on them, so that's obviously not the comparison they were trying to draw. The way I see the comment, labor is more valuable to society than putting up capital is, so the government should incentivize labor by raising the capital gains tax.
- ASalazarMX 6y ago
  > then no one would accept a job since they'd rather have the time instead So, if we value air more than food, should we stop eating so we can breathe more?
  - refurb 6y ago
    So we can breath enough? Hell yeah. I’d give up food to make sure I can breath.
  - atatatat 6y ago
    You literally make this tradeoff each time you have a meal — what?
- deleted 6y ago
  [deleted]
- vagrantJin 6y ago
  People would take time over a job if Maslows hierachy of needs are taken care of by some grant like Universal Basic Income. I would conjecture people don't always work for rational reasons -> Billionaires going to the office must piss off everyone like dude, you've won the game, go buy an island or something. So work is a useful habit. Useful in that it's a source of revenue for the government. Which is good and I agree with. But that makes unemployment a wholly irrational thing. Can our economic models even include unemployment as a variable? Surely government must hear those unemployment stats like a cat scratching a board. Should people have to lie, cheat, beg so that they can become tax paying citizens?
bko 6y ago
Replace "capital" with "investment" Or imagine the extreme, where capital gains was taxed 100%. No one would invest, we would all be essentially hunter gatherers. There would be no capital appreciation allowed so you would not be able to invest in anything in hopes of making a profit. Capital is how you build a better future
- ilikecakeandpie 6y ago
  "Or imagine the extreme, where capital gains was taxed 100%." This will likely never happen unless we have a true existential/societal collapse so why entertain this thought?
  - bko 6y ago
    Looking at extremes is a useful mechanism to understanding the underlying factors affecting something. If you accept the fact that 100% capital gains tax would result in no investment and a 0% capital gains tax would mean a lot of investment, surely there is a link between cap gains and someone's willingness to investment. Especially considering that capital holders tend to be sophisticated and highly sensitive to incentives. So increasing the capital gains tax would lead to less investment.
    - BGthaOG 6y ago
      I agree that it is helpful but I also think it is more nuanced than that. What if there is a Goldilocks phenomenon? Someone with knowldege on the "life on Earth goldilocks with the Sun" could share their thoughts on such a comparison :)
    - qqqwerty 6y ago
      Capital gains tax is rarely if ever a major consideration in investment decisions. The vast majority of professional investors are interested in cash flows, not capital gains. It is just the speculators that live and die by capital gains, and they treat our markets like a casino. Disincentivizing their behavior would be a good thing.
    - 6y ago
jbay808 6y ago
At least, this should be how it's done in a low interest rate environment when investors are already desperate to invest in whatever they can get an above-inflation return on.
bhupy 6y ago
> Time is more valuable than money This is one of those "does not compute" statements that's sort of like dividing by zero. Money buys time, and time has value (https://www.investopedia.com/terms/t/timevalueofmoney.asp https://www.investopedia.com/terms/t/timevalueofmoney.asp), which is measured in money. It's why we try to incentivize long term investment, because without such an incentive, consumption now is better than consumption 5-10 years from now. We saw this happen before "long term" carve outs began proliferating in various states' tax codes.
- grecy 6y ago
  > Money buys time, and time has value Only when you look at it from the business owner perspective, who can simply buy more labor (time) to make more money. For individuals, the only thing we have in this world is time, and it's finite. When it's all gone, it's all over for us. That means time is the most valuable thing possible to individuals. If and when we choose we can sell some of that time for money. But money in not what we want, and it doesn't give us direct value. Time is what we all want, because sooner or later it runs out.
  - bhupy 6y ago
    > For individuals, the only thing we have in this world is time, and it's finite. When it's all gone, it's all over for us. That means time is the most valuable thing possible to individuals. But this is a difference in degree, not kind. When the average individual buys something online, some individuals may choose to pay a little more for expedited shipping. It's the same principle. More abstractly, if I were to pose an individual looking to purchase Nike shoes 2 options: $100 to get the shoes today, or $1 to get the same shoes a year from now, the majority of individuals would choose the former, rather than the latter. Again, that's because of the time-value of money. Now, you're correct that not everybody has the means to be able to buy time like this, but one can't conclude from this reality that time is "more valuable than" money. > Time is what we all want, because sooner or later it runs out. Yes, this is correct, and it reinforces the argument that time and money are just two currencies that are interchangeable. Money is just a proxy for value, and time is undeniably valuable. Not everybody has enough money to buy 70+ years of "free time", which is why the median person typically trades labor instead of money for future "free time" (retirement). In most countries that offer social security, that's the underlying mechanism: convert mass labor into money (taxes/contribution) which can then be converted into long term investment (sovereign wealth funds, SS trust funds), which is then converted to equally distributed "future free time" for everyone involved.
deleted 6y ago
[deleted]
Andy_G11 6y ago
This perspective is strongly endorsed by Pikkety's work, which shows that returns on capital outperform returns on labor. Further, there is a trend for higher levels of capital to not just produce proportionately higher returns, but also higher percentage returns. E.g. Harvard's endowment fund earns a higher percentage return than the smaller endowment funds of other universities. This disparity may be because higher amounts of capital allow owners to not only employ more skilled financial resources, but also to cherry-pick investments and negotiate superior returns to an extent that is not possible for owners with less capital. The disparity in returns on capital vs labor result in a concentration of capital in fewer hands (inequality) and this is linked to reduced overall productivity. Piketty proposes a tax on capital (not just on a capital gain, but on the balance) to reverse this. This is undermined by the fact that it is regarded as an impossibility (politically), kind of like proposing that we all just learn to levitate to do away with polluting aircraft.
dzhiurgis 6y ago
There's probably more governing cost to labour than to virtual jobs. In NZ builders pay more towards healthcare than coders do.
zamfi 6y ago
What taxes favor day trading commodities over labor?

chacham15 6y ago

> Time is more valuable than money and taxes should reflect that. I understand the sentiment, but it literally isnt true. If it were, then noone would accept a job since they'd rather have the time instead. At the very least, there is more nuance to be observed here.

bigyikes 6y ago
I would gladly take a pay cut if my job let me work less time.
- the_lonely_road 6y ago
  Seconded. If I could keep my career security (I will still be employed here 10 years from now unless black swan) and healthcare (no spouse) while cutting pay and hours in half I would take it in a HEARTBEAT. No one is offering that.
  - misterremote 6y ago
    But shouldn’t that be totally doable? What’s the argument against that by the employer? Because pay is also 50%
    - malloreon 6y ago
      there are costs to employing someone that don't vary with number of hours worked. The person you're responding to wants 100% of their current healthcare plan but only half the salary/expected hours, for example.
    - WJW 6y ago
      Many of the overhead costs scale as a function of headcount irrespective of how many hours each employee works. For example, let's say you work in a regulated industry where each employee needs to follow a certain training every year. Having twice as many employees each working 20 hrs will double the training costs. Management overhead will also go up since there will be more one-on-ones etc.
    - sfotm 6y ago
      There are some issues that I think would make this difficult to do: - Two employees at 50% salary and time are not equivalent to a single employee at 100% of salary. They're strictly worse if always run in series, all else being equal. Alice starts project X on Monday and Tuesday, and hands it off to Bob on Wednesday because it's urgent. There's some inefficiency there. Good management could help avoid it, but would be hard-pressed to prevent it in all cases. At best, it's one more thing to worry about. - There are benefits outside of your salary that are more difficult to cut in half. Health plans, headcount taxes, etc. That being said, there are some experiments being done (not at 50%): https://www.amazon.jobs/en/landing_pages/part-time-tech https://www.amazon.jobs/en/landing_pages/part-time-tech
      - misterremote 6y ago
        Ok, I see. I guess if company feels that the talent is very valuable to them, it's possible to negotiate special terms like this, but I guess in general companies are not then interested in part-time roles yeah. I'm actually planning to cut my time in half, but keep the same pay. My story was discussed here on HN yesterday/today: https://news.ycombinator.com/item?id=27133376 https://news.ycombinator.com/item?id=27133376 Long story short: As the startup I'm working at doesn't have enough money to raise my hourly price, I'm now proposing to cut my hours in half, but keep the pay. So I'm working half the time, but keep the pay. It's summer now, so I'm happy to spend more time with friends and family. And while we're talking about working less, another thing that's interesting I think is "4-day work weeks". There are remote companies who work 32h per week. I even made a list of the ones I know, but I'm sure there are more: https://remotehunt.com/remote-companies-with-4-day-work-weeks https://remotehunt.com/remote-companies-with-4-day-work-week...
    - abetterday 6y ago
      Aside from fixed costs and aspects like coordination efficiency, companies have to raise pay more than linearly to get people into high hours jobs. Those disproportionate gains should be given back at cut hours, but too many employees would claim this is unfair. I wrote about this a while back: https://www.growwiser.com/2011/11/27/less-work-for-less-pay-why-dont-companies-offer-the-option/ https://www.growwiser.com/2011/11/27/less-work-for-less-pay-...
  - _dps 6y ago
    This kind of flexibility is one of the advantages of consulting/freelancing. Obviously the career security aspect is different, but in a hot hiring market there isn't a shortage of opportunities. I know several people who, as they got to more senior levels, decided to work 50% of the time for roughly 60% of their previous salary.
- pixelpoet 6y ago
  Come to Germany, where companies over a certain size (# of employees) literally cannot deny your request to work part-time: https://www.globaladvocaten.com/blog/labour-law-parttime-work-in-germany https://www.globaladvocaten.com/blog/labour-law-parttime-wor... Be warned though, you won't make the same batshit insane US salary here.
- langitbiru 6y ago
  Maybe you can find one here: https://parttime.careers https://parttime.careers
kissickas 6y ago
Neither of those things have units on them, so that's obviously not the comparison they were trying to draw. The way I see the comment, labor is more valuable to society than putting up capital is, so the government should incentivize labor by raising the capital gains tax.
ASalazarMX 6y ago
> then no one would accept a job since they'd rather have the time instead So, if we value air more than food, should we stop eating so we can breathe more?
- refurb 6y ago
  So we can breath enough? Hell yeah. I’d give up food to make sure I can breath.
- atatatat 6y ago
  You literally make this tradeoff each time you have a meal — what?
deleted 6y ago
[deleted]
vagrantJin 6y ago
People would take time over a job if Maslows hierachy of needs are taken care of by some grant like Universal Basic Income. I would conjecture people don't always work for rational reasons -> Billionaires going to the office must piss off everyone like dude, you've won the game, go buy an island or something. So work is a useful habit. Useful in that it's a source of revenue for the government. Which is good and I agree with. But that makes unemployment a wholly irrational thing. Can our economic models even include unemployment as a variable? Surely government must hear those unemployment stats like a cat scratching a board. Should people have to lie, cheat, beg so that they can become tax paying citizens?

bko 6y ago

Replace "capital" with "investment" Or imagine the extreme, where capital gains was taxed 100%. No one would invest, we would all be essentially hunter gatherers. There would be no capital appreciation allowed so you would not be able to invest in anything in hopes of making a profit. Capital is how you build a better future

ilikecakeandpie 6y ago
"Or imagine the extreme, where capital gains was taxed 100%." This will likely never happen unless we have a true existential/societal collapse so why entertain this thought?
- bko 6y ago
  Looking at extremes is a useful mechanism to understanding the underlying factors affecting something. If you accept the fact that 100% capital gains tax would result in no investment and a 0% capital gains tax would mean a lot of investment, surely there is a link between cap gains and someone's willingness to investment. Especially considering that capital holders tend to be sophisticated and highly sensitive to incentives. So increasing the capital gains tax would lead to less investment.
  - BGthaOG 6y ago
    I agree that it is helpful but I also think it is more nuanced than that. What if there is a Goldilocks phenomenon? Someone with knowldege on the "life on Earth goldilocks with the Sun" could share their thoughts on such a comparison :)
  - qqqwerty 6y ago
    Capital gains tax is rarely if ever a major consideration in investment decisions. The vast majority of professional investors are interested in cash flows, not capital gains. It is just the speculators that live and die by capital gains, and they treat our markets like a casino. Disincentivizing their behavior would be a good thing.
  - 6y ago

jbay808 6y ago

At least, this should be how it's done in a low interest rate environment when investors are already desperate to invest in whatever they can get an above-inflation return on.

bhupy 6y ago

> Time is more valuable than money This is one of those "does not compute" statements that's sort of like dividing by zero. Money buys time, and time has value (https://www.investopedia.com/terms/t/timevalueofmoney.asp https://www.investopedia.com/terms/t/timevalueofmoney.asp), which is measured in money. It's why we try to incentivize long term investment, because without such an incentive, consumption now is better than consumption 5-10 years from now. We saw this happen before "long term" carve outs began proliferating in various states' tax codes.

grecy 6y ago
> Money buys time, and time has value Only when you look at it from the business owner perspective, who can simply buy more labor (time) to make more money. For individuals, the only thing we have in this world is time, and it's finite. When it's all gone, it's all over for us. That means time is the most valuable thing possible to individuals. If and when we choose we can sell some of that time for money. But money in not what we want, and it doesn't give us direct value. Time is what we all want, because sooner or later it runs out.
- bhupy 6y ago
  > For individuals, the only thing we have in this world is time, and it's finite. When it's all gone, it's all over for us. That means time is the most valuable thing possible to individuals. But this is a difference in degree, not kind. When the average individual buys something online, some individuals may choose to pay a little more for expedited shipping. It's the same principle. More abstractly, if I were to pose an individual looking to purchase Nike shoes 2 options: $100 to get the shoes today, or $1 to get the same shoes a year from now, the majority of individuals would choose the former, rather than the latter. Again, that's because of the time-value of money. Now, you're correct that not everybody has the means to be able to buy time like this, but one can't conclude from this reality that time is "more valuable than" money. > Time is what we all want, because sooner or later it runs out. Yes, this is correct, and it reinforces the argument that time and money are just two currencies that are interchangeable. Money is just a proxy for value, and time is undeniably valuable. Not everybody has enough money to buy 70+ years of "free time", which is why the median person typically trades labor instead of money for future "free time" (retirement). In most countries that offer social security, that's the underlying mechanism: convert mass labor into money (taxes/contribution) which can then be converted into long term investment (sovereign wealth funds, SS trust funds), which is then converted to equally distributed "future free time" for everyone involved.

deleted 6y ago

[deleted]

Andy_G11 6y ago

This perspective is strongly endorsed by Pikkety's work, which shows that returns on capital outperform returns on labor. Further, there is a trend for higher levels of capital to not just produce proportionately higher returns, but also higher percentage returns. E.g. Harvard's endowment fund earns a higher percentage return than the smaller endowment funds of other universities. This disparity may be because higher amounts of capital allow owners to not only employ more skilled financial resources, but also to cherry-pick investments and negotiate superior returns to an extent that is not possible for owners with less capital. The disparity in returns on capital vs labor result in a concentration of capital in fewer hands (inequality) and this is linked to reduced overall productivity. Piketty proposes a tax on capital (not just on a capital gain, but on the balance) to reverse this. This is undermined by the fact that it is regarded as an impossibility (politically), kind of like proposing that we all just learn to levitate to do away with polluting aircraft.

dzhiurgis 6y ago

There's probably more governing cost to labour than to virtual jobs. In NZ builders pay more towards healthcare than coders do.

zamfi 6y ago

What taxes favor day trading commodities over labor?