7 ms·

> Locals [...] are pissed with these "digital nomads" (read: illegal immigrants) who upend the local economy and pay no taxes Wait, aren't digital nomads liter

> Locals [...] are pissed with these "digital nomads" (read: illegal immigrants) who upend the local economy and pay no taxes Wait, aren't digital nomads literally bringing money in from another country? They pay taxes on everything they consume, yet they don't take the money from inside the country, they bring it in from the outside. Why exactly would they be pissed?

BossingAround 4y ago
Because nomads owe them more than they already pay
slim 4y ago
you are right with regards to developing countries. if you bring foreign currency you are welcome
- LanceH 4y ago
  Right up until there are enough of you that the price of a house goes up, and the restaurants go upscale.
knorker 4y ago
Citizens working without paying into pension, healthcare, or following local employment laws (best example: France, that really cares what employees in their borders do). You can't simply unilaterally declare that sales tax compensates for everything you do, and think laws don't apply.
- maerF0x0 4y ago
  They also do not qualify to receive from most of those services. So are they really a burden?
  - vkou 4y ago
    The same can be said about illegal immigrants and temporary visa holders in the United States. An H1B worker pays taxes, pays into social security, etc, but isn't going to get a penny back out of it. And yet, for some reason, a lot of people really dislike[1] H1Bs... [1] Last election cycle, I've received a beautiful election pamphlet from a frothing-at-the-mouth state politician-want-to-be who spent most of his 250 words assuring me that H1Bs are robbing the country by mooching all of its services while not paying any taxes. He, uh, got 40% of the vote.
    - suoduandao2 4y ago
      There's a glaring difference between a digital nomad working remotely and someone on an H1B or an illegal immigrant - the digital nomad isn't participating in the local labour market. Increasing the labour supply (which most assume would decrease the price) is the major complaint people who dislike H1Bs/illegal immigrants. A digital nomad isn't competing with the people he lives near for scarce jobs, so that complaint doesn't apply.
      - vkou 4y ago
        > the digital nomad isn't participating in the local labour market. Yes he is. If the firm's willing to employ someone in Costa Rica, there's no reason it couldn't be employing a local.
        maerF0x0 4y ago
        This is the typical communist/labour style answer which ignores that todays mobile work force is not just a body in a geography. An employee past about 5 years experience is essentially unique when observed across the many variables (education, years of experience with each specific tool, industry/domain experience, soft skills etc). Just because a capable expat employee happens to presently be located in Costa Rica, doesnt mean a capable Costa Rican can be found. The most valuable people in the workforce are not cogs.
        cfcosta 4y ago
  - sedawk 4y ago
    They would still be using a lot of city/state/country local infrastructures (utilities, roads, parks, emergency medical/police/fire services, local libraries, to name a few), won't they? Costs for these might not be funded by Sales Taxes alone or at all. Not paying one's dues to the City/State/Country of residence in accordance with local laws is not only illegal, but also immoral; it breaks revenue calculations city/state/country makes based on multitude of things (at least in most sane places), and if a nomad is not doing not paying equal share, then the locals are footing the bill for them! Mere income tax on landlord's rental income is not something that will come close at covering all the income gaps city/state would face if one were authorized local worker. As someone else pointed out, these nomads are earning in foreign currency that literally translate to 10x-100x in local currencies, they will simply drive the prices up and soon drive them up enough out of reach of the locals simply because nomads can afford inflated prices.
    - maerF0x0 4y ago
      > drive the prices up and who is receiving these 10-100x'd prices? The locals who are providing value to the purchaser. Higher selling prices are profits in some locals' pocket/bank account. Why does this side of the equation never get talked about? Yes I may make the price of a taco go up 20c, but that's 20c more profit for every taco sold at that price. The workers, the business, the real estate value, the whole supply chain can all now command a better price because of my "wasteful" spending relative to the context.
      - sedawk 4y ago
        That is assuming the (much debunked) trickle down economics. A 20c increase in taco price is not going mean an increase in the worker's pay (if any at all). Minimum wages haven't increased (much) in the States for over a decade, in spite of record profits for a lot of these minimum wage employers. Sure, the price increase is going to help with wealth accumulation for some, but certainly not all, and the ones left out will feel the sting. Someone on a pension will see a sudden increase in prices, property taxes etc. something she didn't have enough buffer to accommodate. Of course, there are other forces that will do the same too, but it would be foolhardy to ignore the effects of digital nomads on local economy. Better to get ahead of it in terms of public policy before it becomes too big of an issue. Same way governments around the world are struggling to curb inflation, nomads can cause (unexpected) inflation on local economies.
  - knorker 4y ago
    This is again something you can't just unilaterally declare. Even if you're right that they're not a burden, which I disagree with since they do actually do enjoy services like police, fire department, mass transit subsidies, national defence, roads, clean air enforcement, etc, this is still not something you can unilaterally decide. The laws are there whether you think they should be or not. The country's state budget and its rules are not up to the individual to opt in and out of.
ajvs 4y ago
Gentrification which increases the price of housing and other goods is a common complaint in Mexico. Though in my opinion this financial arbitrage is simply inevitable due to the housing market in Western countries being overinflated by investors.
- deleted 4y ago
  [deleted]
A4ET8a8uTh0 4y ago
It goes back to the 'government is not a monolithic entity'. Local tax authorities have no problem with it and likely encourage it ( more money flowing around for just about everything ), but there are always beancounters at the top, who think they may be able to extract even more.
paxys 4y ago
Not all jurisdictions have sales taxes. And sales taxes aren't anywhere close to covering 100% of the budget for a city/state/country. That foreign money mostly goes to a handful of landlords/Airbnbs and tourist-friendly businesses (which are often foreign owned themselves). That in turn drives up prices of everything for locals – who are seeing no increase in income and moreover have to pay income tax and a ton of other taxes on it, something that digital nomads conveniently skip. An influx of foreigners and foreign money isn't automatically welcome in a local economy.
- kelnos 4y ago
  Maybe it's time for governments to stop relying on income taxes so much, and instead really on land/property taxes for the bulk of their revenue. Sales taxes are regressive, but there are ways to keep them from hurting lower income folks as much.
  - maerF0x0 4y ago
    and even then, a digital nomad's expenditure inside their country _is income_ to the next hop. They're simply losing on a single hop in an infinite chain of taxation.
  - themanmaran 4y ago
    How is property tax a good substitute for income tax? Property is not a 1:1 to value creation.
    - hahaxdxd123 4y ago
      Why punish value creation when you can punish rent-seeking? It is a strictly better substitute.
      - deleted 4y ago
        [deleted]
      - zdragnar 4y ago
Tiktaalik 4y ago
That they have wealth outsized compared to the local economy could have distortionary effects. One of the biggest examples would be in real estate, where foreigners could be comparatively very wealthy compared to locals, and can thus out compete locals and dramatically raise the price of real estate. This is why some jurisdictions that found that the amount of properties being purchased by foreigners was becoming startling have brought in foreign buyer taxes to try to even out the distortions in the economy and make it more fair for those who earn their incomes in the local economy.
- kelnos 4y ago
  I was reading about this in Vancouver and Toronto. From what I read, the foreign buyer taxes did indeed massively decrease foreign real estate investment, but it's not at all clear that it actually lowered home prices, or even slowed down home price growth. Not what I expected or hoped to see (as I live in SF and would advocate for something similar here if it worked).
  - Tiktaalik 4y ago
    I'd say that's true. The reasons being that the housing economy is an enormously complex system and so while addressing certain problems fixed those problems, there still remained others which still continued to induce high prices. (using Vancouver as an example, after the foreign buyer tax the city still has an incredibly low near 0% rental vacancy, which makes secondary home investment enormously profitable and continues to keep prices lofty) This doesn't mean that it wasn't a good idea to address the foreign buyer problem, but it was clear that the system instantly shifted to compensate for the lack of foreign buyers, and new buyers appeared. There was plenty of local buyers, many of which had existing properties with inflated land values they could borrow against and the ultra low interest rates from the pandemic that aided them in bidding up properties to buy. Good for local buyers to have less foreign competition, no real change for local renters. The most real direct outcome of the foreign buyer tax was the nature of the housing product that was made changed. Previously there were companies that were building "luxury" condos explicitly marketed as pied a terres to a foreign audience (largely from major cities in asia). Overnight this sort of thing went away and the same companies that were previously pushing these products instantly pivoted into building purpose built rental buildings for locals. Ultimately I think the foreign buyer tax is good for local renters, but further work needs to be done.
rr888 4y ago
I think the point is you are breaking the law. Most sensible people wouldn't care. Its if you get an over zealous customs official, tax hound or local police. If you keep you nose clean you're probably OK but if you get in a fight or piss of the mayor you might get extra tax fines or jail time.
bombcar 4y ago
The same reason many cities that are now overcrowded are pissed at all the rich people that moved in and bought everything up. If one or two digital nomads move in, the locals won't care much and the nomads will just become one of the types of people they have. But if a town becomes infested with them, it can cause all sorts of issues (the nomads won't care about food prices because they can afford US prices, which are 10-100x what the locals have been paying, so prices can suddenly skyrocket). Hell, you have it inside the country: https://www.mercurynews.com/2017/07/03/go-back-to-california-painted-on-prius-in-portland/ https://www.mercurynews.com/2017/07/03/go-back-to-california... And it's not always where you think it would be. Tourism has done similar things to cities around the world; turning what used to be actual functioning cities into amusement parks for adults. Venice might be a good example, some say.
- ryandrake 4y ago
  Reminds me of one of my buddies who decided to move out of California after going permanent remote. He encountered more than one realtor who informed him that the seller intends to charge a "Californian Tax" percentage on top of the asking price to any buyer from California because they just don't want us in their communities. Talk about cutting off your nose to spite your face.
  - deckard1 4y ago
    in the US? Sounds like it's time to update the Fair Housing Act to include state/city/hood/zip/street origin next to national origin. Ridiculous.
    - bombcar 4y ago
      It can also be “Californians will pay over sticker so soak ‘em” vs “locals won’t”. Also being from far away can lead to not knowing the area as well as you should and being disappointed.
  - jimmaswell 4y ago
    Passing up money in the short term for the perceived good of your community can't be fairly equated to "cutting off your nose to spite your face". But it would be more fair for the seller to try to get to know the buyer and go from there instead of just assuming by state.
0x457 4y ago
> Wait, aren't digital nomads literally bringing money in from another country? They pay taxes on everything they consume, yet they don't take the money from inside the country, they bring it in from the outside. Not quite. They do bring money by buying things and paying sales/VAT tax. However, they don't pay income taxes because in 99/100 times they are not allowed to work, so they are illegal immigrants essentially. They also come with their LA salaries and make renting/buying harder for locals. I know people who do that in Thailand on tourist visa, and just have a short vacation every 90 days to qualify for new tourist visa.
cromka 4y ago
> Wait, aren't digital nomads literally bringing money in from another country? I used to make the same argument, but it's just so convenient when it's easy to forget that there is a reason why income tax exists on top of VAT in the first place. And that's because VAT doesn't cover all of the budget expenses. So you pay your hefty income tax back home, and only pay VAT on the products and services provided by (private) entities. The proportion of the budget not covered by VAT is covered by the locals and their income tax. That's not OK. Same reason why the most touristy places impose additional tourist tax.
asdadsdad 4y ago
A country's borders are not only protected by paying taxes that are due. It's illegal in most places, save a regulation in place to protect that case, to work from another country without proper papers, read a visa, permanent residency or citizenship.

BossingAround 4y ago

Because nomads owe them more than they already pay

slim 4y ago

you are right with regards to developing countries. if you bring foreign currency you are welcome

LanceH 4y ago
Right up until there are enough of you that the price of a house goes up, and the restaurants go upscale.

knorker 4y ago

Citizens working without paying into pension, healthcare, or following local employment laws (best example: France, that really cares what employees in their borders do). You can't simply unilaterally declare that sales tax compensates for everything you do, and think laws don't apply.

maerF0x0 4y ago
They also do not qualify to receive from most of those services. So are they really a burden?
- vkou 4y ago
  The same can be said about illegal immigrants and temporary visa holders in the United States. An H1B worker pays taxes, pays into social security, etc, but isn't going to get a penny back out of it. And yet, for some reason, a lot of people really dislike[1] H1Bs... [1] Last election cycle, I've received a beautiful election pamphlet from a frothing-at-the-mouth state politician-want-to-be who spent most of his 250 words assuring me that H1Bs are robbing the country by mooching all of its services while not paying any taxes. He, uh, got 40% of the vote.
  - suoduandao2 4y ago
    There's a glaring difference between a digital nomad working remotely and someone on an H1B or an illegal immigrant - the digital nomad isn't participating in the local labour market. Increasing the labour supply (which most assume would decrease the price) is the major complaint people who dislike H1Bs/illegal immigrants. A digital nomad isn't competing with the people he lives near for scarce jobs, so that complaint doesn't apply.
    - vkou 4y ago
      > the digital nomad isn't participating in the local labour market. Yes he is. If the firm's willing to employ someone in Costa Rica, there's no reason it couldn't be employing a local.
      - maerF0x0 4y ago
        This is the typical communist/labour style answer which ignores that todays mobile work force is not just a body in a geography. An employee past about 5 years experience is essentially unique when observed across the many variables (education, years of experience with each specific tool, industry/domain experience, soft skills etc). Just because a capable expat employee happens to presently be located in Costa Rica, doesnt mean a capable Costa Rican can be found. The most valuable people in the workforce are not cogs.
        cfcosta 4y ago
- sedawk 4y ago
  They would still be using a lot of city/state/country local infrastructures (utilities, roads, parks, emergency medical/police/fire services, local libraries, to name a few), won't they? Costs for these might not be funded by Sales Taxes alone or at all. Not paying one's dues to the City/State/Country of residence in accordance with local laws is not only illegal, but also immoral; it breaks revenue calculations city/state/country makes based on multitude of things (at least in most sane places), and if a nomad is not doing not paying equal share, then the locals are footing the bill for them! Mere income tax on landlord's rental income is not something that will come close at covering all the income gaps city/state would face if one were authorized local worker. As someone else pointed out, these nomads are earning in foreign currency that literally translate to 10x-100x in local currencies, they will simply drive the prices up and soon drive them up enough out of reach of the locals simply because nomads can afford inflated prices.
  - maerF0x0 4y ago
    > drive the prices up and who is receiving these 10-100x'd prices? The locals who are providing value to the purchaser. Higher selling prices are profits in some locals' pocket/bank account. Why does this side of the equation never get talked about? Yes I may make the price of a taco go up 20c, but that's 20c more profit for every taco sold at that price. The workers, the business, the real estate value, the whole supply chain can all now command a better price because of my "wasteful" spending relative to the context.
    - sedawk 4y ago
      That is assuming the (much debunked) trickle down economics. A 20c increase in taco price is not going mean an increase in the worker's pay (if any at all). Minimum wages haven't increased (much) in the States for over a decade, in spite of record profits for a lot of these minimum wage employers. Sure, the price increase is going to help with wealth accumulation for some, but certainly not all, and the ones left out will feel the sting. Someone on a pension will see a sudden increase in prices, property taxes etc. something she didn't have enough buffer to accommodate. Of course, there are other forces that will do the same too, but it would be foolhardy to ignore the effects of digital nomads on local economy. Better to get ahead of it in terms of public policy before it becomes too big of an issue. Same way governments around the world are struggling to curb inflation, nomads can cause (unexpected) inflation on local economies.
- knorker 4y ago
  This is again something you can't just unilaterally declare. Even if you're right that they're not a burden, which I disagree with since they do actually do enjoy services like police, fire department, mass transit subsidies, national defence, roads, clean air enforcement, etc, this is still not something you can unilaterally decide. The laws are there whether you think they should be or not. The country's state budget and its rules are not up to the individual to opt in and out of.

ajvs 4y ago

Gentrification which increases the price of housing and other goods is a common complaint in Mexico. Though in my opinion this financial arbitrage is simply inevitable due to the housing market in Western countries being overinflated by investors.

deleted 4y ago
[deleted]

A4ET8a8uTh0 4y ago

It goes back to the 'government is not a monolithic entity'. Local tax authorities have no problem with it and likely encourage it ( more money flowing around for just about everything ), but there are always beancounters at the top, who think they may be able to extract even more.

paxys 4y ago

Not all jurisdictions have sales taxes. And sales taxes aren't anywhere close to covering 100% of the budget for a city/state/country. That foreign money mostly goes to a handful of landlords/Airbnbs and tourist-friendly businesses (which are often foreign owned themselves). That in turn drives up prices of everything for locals – who are seeing no increase in income and moreover have to pay income tax and a ton of other taxes on it, something that digital nomads conveniently skip. An influx of foreigners and foreign money isn't automatically welcome in a local economy.

kelnos 4y ago
Maybe it's time for governments to stop relying on income taxes so much, and instead really on land/property taxes for the bulk of their revenue. Sales taxes are regressive, but there are ways to keep them from hurting lower income folks as much.
- maerF0x0 4y ago
  and even then, a digital nomad's expenditure inside their country _is income_ to the next hop. They're simply losing on a single hop in an infinite chain of taxation.
- themanmaran 4y ago
  How is property tax a good substitute for income tax? Property is not a 1:1 to value creation.
  - hahaxdxd123 4y ago
    Why punish value creation when you can punish rent-seeking? It is a strictly better substitute.
    - deleted 4y ago
      [deleted]
    - zdragnar 4y ago

Tiktaalik 4y ago

That they have wealth outsized compared to the local economy could have distortionary effects. One of the biggest examples would be in real estate, where foreigners could be comparatively very wealthy compared to locals, and can thus out compete locals and dramatically raise the price of real estate. This is why some jurisdictions that found that the amount of properties being purchased by foreigners was becoming startling have brought in foreign buyer taxes to try to even out the distortions in the economy and make it more fair for those who earn their incomes in the local economy.

kelnos 4y ago
I was reading about this in Vancouver and Toronto. From what I read, the foreign buyer taxes did indeed massively decrease foreign real estate investment, but it's not at all clear that it actually lowered home prices, or even slowed down home price growth. Not what I expected or hoped to see (as I live in SF and would advocate for something similar here if it worked).
- Tiktaalik 4y ago
  I'd say that's true. The reasons being that the housing economy is an enormously complex system and so while addressing certain problems fixed those problems, there still remained others which still continued to induce high prices. (using Vancouver as an example, after the foreign buyer tax the city still has an incredibly low near 0% rental vacancy, which makes secondary home investment enormously profitable and continues to keep prices lofty) This doesn't mean that it wasn't a good idea to address the foreign buyer problem, but it was clear that the system instantly shifted to compensate for the lack of foreign buyers, and new buyers appeared. There was plenty of local buyers, many of which had existing properties with inflated land values they could borrow against and the ultra low interest rates from the pandemic that aided them in bidding up properties to buy. Good for local buyers to have less foreign competition, no real change for local renters. The most real direct outcome of the foreign buyer tax was the nature of the housing product that was made changed. Previously there were companies that were building "luxury" condos explicitly marketed as pied a terres to a foreign audience (largely from major cities in asia). Overnight this sort of thing went away and the same companies that were previously pushing these products instantly pivoted into building purpose built rental buildings for locals. Ultimately I think the foreign buyer tax is good for local renters, but further work needs to be done.

rr888 4y ago

I think the point is you are breaking the law. Most sensible people wouldn't care. Its if you get an over zealous customs official, tax hound or local police. If you keep you nose clean you're probably OK but if you get in a fight or piss of the mayor you might get extra tax fines or jail time.

bombcar 4y ago

The same reason many cities that are now overcrowded are pissed at all the rich people that moved in and bought everything up. If one or two digital nomads move in, the locals won't care much and the nomads will just become one of the types of people they have. But if a town becomes infested with them, it can cause all sorts of issues (the nomads won't care about food prices because they can afford US prices, which are 10-100x what the locals have been paying, so prices can suddenly skyrocket). Hell, you have it inside the country: https://www.mercurynews.com/2017/07/03/go-back-to-california-painted-on-prius-in-portland/ https://www.mercurynews.com/2017/07/03/go-back-to-california... And it's not always where you think it would be. Tourism has done similar things to cities around the world; turning what used to be actual functioning cities into amusement parks for adults. Venice might be a good example, some say.

ryandrake 4y ago
Reminds me of one of my buddies who decided to move out of California after going permanent remote. He encountered more than one realtor who informed him that the seller intends to charge a "Californian Tax" percentage on top of the asking price to any buyer from California because they just don't want us in their communities. Talk about cutting off your nose to spite your face.
- deckard1 4y ago
  in the US? Sounds like it's time to update the Fair Housing Act to include state/city/hood/zip/street origin next to national origin. Ridiculous.
  - bombcar 4y ago
    It can also be “Californians will pay over sticker so soak ‘em” vs “locals won’t”. Also being from far away can lead to not knowing the area as well as you should and being disappointed.
- jimmaswell 4y ago
  Passing up money in the short term for the perceived good of your community can't be fairly equated to "cutting off your nose to spite your face". But it would be more fair for the seller to try to get to know the buyer and go from there instead of just assuming by state.

0x457 4y ago

> Wait, aren't digital nomads literally bringing money in from another country? They pay taxes on everything they consume, yet they don't take the money from inside the country, they bring it in from the outside. Not quite. They do bring money by buying things and paying sales/VAT tax. However, they don't pay income taxes because in 99/100 times they are not allowed to work, so they are illegal immigrants essentially. They also come with their LA salaries and make renting/buying harder for locals. I know people who do that in Thailand on tourist visa, and just have a short vacation every 90 days to qualify for new tourist visa.

cromka 4y ago

> Wait, aren't digital nomads literally bringing money in from another country? I used to make the same argument, but it's just so convenient when it's easy to forget that there is a reason why income tax exists on top of VAT in the first place. And that's because VAT doesn't cover all of the budget expenses. So you pay your hefty income tax back home, and only pay VAT on the products and services provided by (private) entities. The proportion of the budget not covered by VAT is covered by the locals and their income tax. That's not OK. Same reason why the most touristy places impose additional tourist tax.

asdadsdad 4y ago

A country's borders are not only protected by paying taxes that are due. It's illegal in most places, save a regulation in place to protect that case, to work from another country without proper papers, read a visa, permanent residency or citizenship.