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> Talking to your local high-school-educated baker is not science. We confidently believe a great deal of things that are untrue, and getting it confirmed with

> Talking to your local high-school-educated baker is not science. We confidently believe a great deal of things that are untrue, and getting it confirmed with science is valuable. In hindsight, it's usually easy to be unsurprised by a scientific result. He's not talking about science per se, but the insane level of rules and regulations you've got to put up with as a business owner -- especially in California. In other words, my interpretation of the GP's remark is that you can get at least an order of magnitude measurement of the pain-in-the-ass/cost factor, which is likely several orders of magnitude higher than what you think it is if you haven't owned a business that has enough revenue to put you on the radar. The bias on HN is probably more towards software (where we can all 1099 each other) and not so much towards manufacturing (which is a major compliance pain). When you're dealing with manufacturing, things are different. You're dealing the EDD, FTB, INS and IRS (from an employee compliance standpoint), then you're also dealing with OSHA and the EPA and all their arcane rules and enforcers that hit you with $15k fines if you use dishsoap incorrectly. Then, on top of all of that you're paying a 35% tax rate. Honestly, I'm surprised manufacturing has lasted as long as it has in the US. > Given that a balance must be struck, it is possible that the optimal level of taxation would be higher than now. I do not know how to judge it - I have no basis for that. I would like to see the evidence that shows where that balance must lie. Well, you could read the article :) We have a control group (the US) and the test groups (Germany, China) are far outperforming us.

_delirium 14y ago
Germany is interesting as a control, because its overall tax rates are much higher than in the U.S.--- 41% of GDP for Germany, versus only 27% of GDP (at all levels of government) for the USA. But its corporate tax rate is lower, because it gets most of its tax revenue from personal income taxes and VAT. If we wanted the American tax system to become like Germany's, the steps would look roughly like: 1. significantly lower corporate tax rates; 2. nearly double personal income tax rates; 3. institute a federal VAT. But you don't end up with the German economic model if you do only #1...
- dan00 14y ago
  "1. significantly lower corporate tax rates" This harmed the cities in Germany a lot and increased their debt. It's kind of a contradiction if Germany should be the economic guide, but it's cities can't pay for their public baths anymore.

_delirium 14y ago

Germany is interesting as a control, because its overall tax rates are much higher than in the U.S.--- 41% of GDP for Germany, versus only 27% of GDP (at all levels of government) for the USA. But its corporate tax rate is lower, because it gets most of its tax revenue from personal income taxes and VAT. If we wanted the American tax system to become like Germany's, the steps would look roughly like: 1. significantly lower corporate tax rates; 2. nearly double personal income tax rates; 3. institute a federal VAT. But you don't end up with the German economic model if you do only #1...

dan00 14y ago
"1. significantly lower corporate tax rates" This harmed the cities in Germany a lot and increased their debt. It's kind of a contradiction if Germany should be the economic guide, but it's cities can't pay for their public baths anymore.