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Japan's Hometown Tax

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Re: Japan's Hometown Tax

#61

Post by gorpomon »

brazzy wrote: post #21
noisy_boy wrote: post #7

Very interesting. A scenario came to mind - a city sends back a local delicacy. Then it notices that the number of donators is increasing. Looks further into it and finds that the delicacy is very popular. Now it has identified a product that it can independently promote and the city can earn more revenue. So many possibilities :)

Local food delicacies are a major industry in Japan due to the formalized culture of travel souvenirs, and it's pretty much guaranteed that anything that could conceivably be promoted as one, already is.

On my first visit to Japan I went up to Takayama. I had never heard of Hida beef before that visit, but now I've eaten enough for a lifetime.

Re: Japan's Hometown Tax

#62

Post by rayiner »

hyperpape wrote: post #34
rayiner wrote: post #27

Earlier quoted context omitted.

This is not correct. Half of all K-12 funding comes from state and federal sources, which are disproportionately directed to schools in lower income districts. There was a WaPo article a few years ago showing that, if all funding sources are accounted for, most states show little difference between funding for rich and poor districts, and many show poor districts are better funded.

This is admittedly 27 years old, but at the time Savage Inequalities was written, the range was anywhere from $3k-15k/student: https://en.wikipedia.org/wiki/Savage_Inequalities . I don't remember much of the book, but I remember the description of East St. Louis: raw sewage repeatedly backing up into the schools.

Today, Camden spends $30k/student, more than many wealthy NJ counties: https://www.nj.com/education/2017/05/the_50_school_districts.... Almost all of it is state money. Great Neck is about $34k, but the range for expensive NY suburbs is $25-35k. https://www.empirecenter.org/wp-content/uploads/2017/05/sbs1...

Which is comically high all around. Montgomery County, an expensive DC suburb where housing is more than most of Westchester or Long Island, spends about $16k. Baltimore spends the same, with lower local funding being offset by much higher state and federal funding: https://www.empirecenter.org/wp-content/uploads/2017/05/sbs1.... Fairfax County, VA, routinely the highest or second highest income county in the country, spends $14k.

Re: Japan's Hometown Tax

#63

Post by Brockenstein »

luckydata wrote: post #41
tvanantwerp wrote: post #31

Earlier quoted context omitted.

Equalizing the funding doesn't help much if you're still stuck going to school based on where you live. If all the rich kids go to one school and all the poor kids go to another, it's entirely predictable that you'll have vastly different outcomes. I once conversed with a friend in college who had grown up upper-middle class and attended very nice public schooling. She told me that poor schools would be better if the…

That's the reason why sending more money to schools at some point doesn't do anything to improve outcomes. It's much better to spend on safety nets like single payer healthcare, unemployement support etc... so that parents can actually get more involved with their kids' education. But in Mad Max America only the strong survives so none of that will ever happen. I hope the "winners" like the world they are creating be…

An unfortunate facet of the human condition is the idea of throwing enough money at a problem will solve it. And that involves paying 10x as much for a pound of cure compared to an ounce of prevention.

It is a darn shame.

Re: Japan's Hometown Tax

#64

Post by sonnyblarney »

It's a wonderful idea in principle. I love the fact that regions respond with simple, relevant gifts.

I wonder if would be more appropriate if:

a) you could only give to 'where you went to school' and

b) regions could only respond with a nominal, non-cash gift, like a fruit, flower, or some culturally relevant thing.

It would close the loophole, provide for meaningful tax redistribution and encourage legitimate cultural contact between regions and the mega-centre.

Of course trying to get big business out of Tokyo might be an opportunity as well, though that's a hard thing. Creating industrial clusters is hard, and regions fight over it.

Re: Japan's Hometown Tax

#65

Post by thaumasiotes »

gwern wrote: post #15
eigenspace wrote: post #4

That was a fascinating read! I love when things like this happen and some new emergent behaviour appears that was unexpected. This did end up much better than most perverse incentive situations. In fact, I'm not even sure I'd call this a perverse incentive but maybe I'm musinderstanding the definition.

I consider it perverse because it incurs overhead in making the payments (eg if you send a town $100, get back a gift card for $100, and cash it for $97, that's $3 burned for nothing whatsoever than if they could've just transferred $100 into your bank account or not taxed it in the first place), deadweight loss in gifts (you don't value those hometown meibutsu at their market value to other people), overhead from th…

It seems like the overhead of the system is paid for out of the tax savings you get by participating in the program. As I understand it:

1. Earn $2000 in Tokyo.

2. Owe $200 to Tokyo.

3. Donate $80 to Gifu.

4. Receive $40 from Gifu.

5. Liquidate gifts for $38.80

You just saved almost 20% on your income taxes. This presumably lowers the deadweight loss associated with them. Does it lower it by more or less than the 3% loss you take converting gift cards to cash or more appropriate gift cards?

Don't double-count the 3% "overhead" of liquidating a gift card and "deadweight loss in gifts"; those are the same thing:

> You really do get plums from childhood in your mail from your hometown (if you don’t optimize for cash equivalents).

Also:

> and of course, the existence of a competition at all means that the hometown which incurred the expenses of rearing/educating you in the first place probably isn't going to get your tax revenue because they don't offer anime pineapple rewards

With a legal cap on return gifts at 50% of donated value, this shouldn't be the case. You can donate anywhere and you'll get exactly the same return; why wouldn't you donate to somewhere you liked?

Re: Japan's Hometown Tax

#66

Post by munk-a »

megaman2 wrote: post #57
resoluteteeth wrote: post #10

Couching this in terms of Japanese culture is unhelpful in my opinion. The return gifts probably wouldn't exist in the first place elsewhere, but allowing them is simply a blatant loophole that various local governments have cynically abused to increase their revenue and this is something that would happen in any country. The biggest problem is that some local governments are apparently giving return gifts that have…

> but there's absolutely zero reason to allow the return gifts in the first place There are reasons, but just ones that you don't agree with or haven't thought of. You need to understand that reciprocation is in the culture, and people are not purely rational economic actors. It's entirely possible some towns would outright refuse 'assistance' without being able to reciprocate somehow.

This is a thing, definitely, but I don't think it's something we can't talk about and criticize. The fact that this cultural tradition has caused a well-intentioned(ish, if you're rural) tax law to become a big loop hole is a bad thing. I'm certain if they thought this was going to be an issue (with small towns refusing the money) some more reasonable solution could be found.

The town I grew up in, Boston, receives a christmas tree every year from Nova Scotia due to the fact that Boston sent a lot of emergency aide to Halifax and the surrounds after a large explosion there in 1917. Something similar could be done with small towns sending local art and culture items to large cities in free exhibitions to demonstrate what the tax money is benefiting or just as a gift or maybe a small japanese town might sponsor a fair in Tokyo where free plums are available using a portion of the tax money they received. This would be a way to express thanks in a common manner for the sum of the donations made by citizens without creating perverse tax loop holes that are exploited to simply lower the amount of money coming out of your pocket.

Re: Japan's Hometown Tax

#67

Post by thaumasiotes »

gwern wrote: post #44
avar wrote: post #37

Earlier quoted context omitted.

It's only perverse and pointlessly burning money if you exclusively look at it from an economics perspective, but most countries have some sort of highly politicized redistribution mechanism, so it's also a sociological and political question. I.e. you can look at it like an accountant and consider it a 3¢ loss for every $1, or you could consider that perhaps a system like this increases societal goodwill towards red…

I struggle to see what beneficial social effects there are from most people cynically ticking a box on a website to get half back as a gift card they immediately sell for 97% face value. The original intent of the tax program in compensating rural areas, yes; what it has morphed into, no.

Well...

> Widespread gaming or no, the system pretty much works according to the internal aims. Cities get a list of their internal diaspora, and do make considerably more effort to stay in touch with them than they did previously. (This includes lovely holiday cards and sometimes even I-can’t-believe-they’re-not-alumni-magazines.) You really do get plums from childhood in your mail from your hometown (if you don’t optimize for cash equivalents). Cities with declining local tax bases really do get enough money to do material projects with. Tokyo takes a hit to revenue but can afford it.

Re: Japan's Hometown Tax

#68

Post by thaumasiotes »

blattimwind wrote: post #24
21 wrote: post #11

Earlier quoted context omitted.

> On the other hand I have always lived in Northern Italy, and around half of my taxes go to the poorer regions of Italy Everybody says that, Catalonia that it pays more to Spain that it receives back, California and New York to the rest of US... But it's the only way to have nation states, otherwise we'd have to go back to city states (which some people like Taleb actually advice).

Tax redistribution inside nations or in nation unions (like the EU) is pretty much an investment. It generally generates more money than spent on it. E.g. Germany is the largest net contributor to the EU, but guess what would happen if Germany decided to stop putting out those few billions a year. Yeah, not so good for the economy (not just of Germany, pretty much everyone). Turns out, those few billions spurred trad…

> It's literally "one stick, alone, weak — many sticks, together, stronk".

I can't wait for tax redistribution to be renamed "fascism". :D

Re: Japan's Hometown Tax

#69

Post by Retric »

thaumasiotes wrote: post #65
gwern wrote: post #15

Earlier quoted context omitted.

I consider it perverse because it incurs overhead in making the payments (eg if you send a town $100, get back a gift card for $100, and cash it for $97, that's $3 burned for nothing whatsoever than if they could've just transferred $100 into your bank account or not taxed it in the first place), deadweight loss in gifts (you don't value those hometown meibutsu at their market value to other people), overhead from th…

It seems like the overhead of the system is paid for out of the tax savings you get by participating in the program. As I understand it: 1. Earn $2000 in Tokyo. 2. Owe $200 to Tokyo. 3. Donate $80 to Gifu. 4. Receive $40 from Gifu. 5. Liquidate gifts for $38.80 You just saved almost 20% on your income taxes. This presumably lowers the deadweight loss associated with them. Does it lower it by more or less than the 3%…

When you can just lower tax revenue by 40$ and keep 40$, a system that lowers tax revenue by 40$ and only gives you 38.80$ is less efficient. Why does someone else not you get that 1.20$ from your income?

Remember, long term the government ends up raising the taxes to cover that 40$ and your just out 1.20$ for zero gain.

On top of that even if you kept the full 40$, the dead weight loss of extra paperwork is pure economic waste.

Re: Japan's Hometown Tax

#70

Post by Brockenstein »

ekianjo wrote: post #26
rb808 wrote: post #22

The American system (& Japanese?) where schools are mostly funded by local taxes is a root cause of inequality, poverty and unfairness in the USA. Schools in Europe and Australia are funded by centralized government more evenly so doesn't have this problem and dont need this donate to a region system the article talks about. I think its much fairer.

> Schools in Europe and Australia are funded by centralized government This has the other problem that in Europe, governments write all the education program to the letter and this leads to complete brainwashing of the kids or silly educational policies (like completely changing how kids learn how to read, which led to about half a generation of kids with very poor reading/orthographic skills in France just to name o…

https://en.wikipedia.org/wiki/New_Math

No matter where you are, sometimes we want to try something new, sometimes things have to change, and sometimes it doesn't work or there are growing pains.

The other side of the coin is that states and local governments aren't that much better equipped to set education standards. That's how you get things like trying to teach bronze age mythologies as science and a bunch of feel good proclamations about how "we know how best to teach our kids and that's why we should be running the show".

No system is perfect, but having some centralized standards gives you something to shoot for and gives people from other regions the ability to have some expectations about what students (should) have learned.

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