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Japan's Hometown Tax

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Re: Japan's Hometown Tax

#71

Post by badpun »

_cbsz wrote: post #51
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…

> based on the way the government is set up, rural votes have disproportionate power, and for this reason the LDP has a tendency to pander to rural interests Is there a Western government that isn't set up this way? You could write this same blurb about the United States. I would be very curious to hear about what happens when rural areas have political power consummate with their population instead of with their lan…

Poland is such a country. People from rural area get voting power roughly proportional to their number. I can't say if this or the US/Japanese way is more common.

Re: Japan's Hometown Tax

#72

Post by pantonia »

dsfyu404ed wrote: post #53
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).

California and New York are the size of countries. Why couldn't they function on their own as countries? I think a lot of states would be better served if they operated more autonomously and the federal government managed less of their business. I get that in certain cases that's not the optimal situation for resource allocation but freedom has a price.

They are the size of countries like Italy. Read above, they too are annoyed at the freeloaders they have to support. Why should the Bay Area have to subsidize Bakersfield?? Make them city-states and Manhattan will resent the Bronx (not that they don't now).

Re: Japan's Hometown Tax

#73

Post by wyattpeak »

usaar333 wrote: post #48
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…

> . The whole reason for the first 2000 yen not being tax deductible is this is something you are only supposed to do if you seriously want your money to go to a local government, and allowing non-taxed return gifts defeats the intention of how the system is set up I definitely found it strange Japan is allowing the local governments to gift 50% back. In the US, legally any portion of a charitable contribution you ge…

It would probably be instructive to know how actual charitable donations are handled in Japan.

I have no idea, but in a highly reciprocal culture I could well imagine that effectively punishing reciprocation in that way would be a political non-starter.

Re: Japan's Hometown Tax

#74

Post by asah »

Brockenstein wrote: post #58
kevin_thibedeau wrote: post #54

Earlier quoted context omitted.

Then people would be gravely offended by who was and wasn't on the list of choices.

Well they're already greatly offended by taxes and the idea that civilization requires money to run... I think outside of being offended, you'd just have a hard to getting any agreements on what would qualify.

I'd love to see a large scale survey where people allocate their taxes, and see what the allocation actually comes to!

The HN crowd might over-allocate $1000s per person to NSF, NIH and NASA and short Social Security while 100+M people contribute $0 to science, but depend on SS to survive. We might end up with the same budget but people feeling more in control.

We'd also see large scale advertising which is actually a good thing: ads are pretty cheap/efficient, make people feel better about their government and society, and employ an army of creative people. I imagine you wouldn't see branches of government running negative ads against each other - it would be more like the feel-good military recruiting ads today.

Sorry if this sounds utopian, I've had a rough week (in addition to everybody's rough week) and need something to feel good about.

Re: Japan's Hometown Tax

#75

Post by kbrosnan »

resoluteteeth wrote: post #36
CodesInChaos wrote: post #17

Interesting how in some contexts kickback is illegal fraud/corruption, while here the government of a developed democratic country openly engages it. https://en.wikipedia.org/wiki/Kickback_(bribery)

It's also interesting in the context of how strict Japan's rules for election campaigns are. For example, a few years ago Justice Minister Midori Matsushima got in trouble for distributing essentially worthless paper fans since they were considered gifts, whereas paper pamphlets would have been okay, and she had to resign as minister. https://www.dailymail.co.uk/wires/ap/article-2799975/Japans-...

It is about reach, a leaflet would reach one person. That person might talk to a person or two about the information in the leaflet. One person with a fan could be seen by many thousands of people on their daily commute.

Re: Japan's Hometown Tax

#76

Post by sonnyblarney »

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.

The perverse bit is the tax-kickback. Everything else is interesting!

Re: Japan's Hometown Tax

#77

Post by SyneRyder »

_cbsz wrote: post #51
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…

> based on the way the government is set up, rural votes have disproportionate power, and for this reason the LDP has a tendency to pander to rural interests Is there a Western government that isn't set up this way? You could write this same blurb about the United States. I would be very curious to hear about what happens when rural areas have political power consummate with their population instead of with their lan…

I think Australia is mostly set up this way. We call it "One Vote, One Value". Each member of parliament is meant to represent roughly the same number of voters, within a +/- 10% tolerance. When populations change, voting boundaries are redrawn.

https://en.wikipedia.org/wiki/One_vote,_one_value

Re: Japan's Hometown Tax

#78

Post by dmurray »

dsfyu404ed wrote: post #53
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).

California and New York are the size of countries. Why couldn't they function on their own as countries? I think a lot of states would be better served if they operated more autonomously and the federal government managed less of their business. I get that in certain cases that's not the optimal situation for resource allocation but freedom has a price.

They could function as independent countries, for better or worse. But it generally looks like states don't want more autonomy: over 240 years the US federal government has taken on more and more power at the expense of the states, facing minimal resistance apart from a single bloody civil war where the heroes are universally agreed to be the side fighting for more powers for the federal government.

Re: Japan's Hometown Tax

#79

Post by gwern »

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%…

> 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?

If any tax dodge which feeds money to third-parties to exploit a loophole while doing nothing productive on its own is efficient, the problem is with the tax rates in the first place. To say that an elaborate charade involving indirectly buying plums or gift cards through tax rebates is 'efficient' and 'the overhead of the system is paid for' is quite a claim and not obvious, let us say.

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

I was referring to the non-monetary gifts like the products or grave visits. As far as the gifts go, the gift cards are probably the least harmful as they 'only' have a 3% overhead involved in turning them (back) into cash (plus whatever else goes into redeeming them, I suppose, in terms of time/effort/hassle/delay), which is probably a lot less than most of the others.

> 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?

Because what are the odds that the place which incurred the expenses of educating you, out of the hundreds of competing muncipalities, large and small, near and far, naive and sophisticated, meibutsu vs trips vs gift cards, high or low, will give you exactly the right thing and win the competition, and this will happen in almost every case and produce the same net flows as simply sending the rebates to, say, people's registered birthplaces?

Re: Japan's Hometown Tax

#80

Post by dragonwriter »

dmurray wrote: post #78
dsfyu404ed wrote: post #53

Earlier quoted context omitted.

California and New York are the size of countries. Why couldn't they function on their own as countries? I think a lot of states would be better served if they operated more autonomously and the federal government managed less of their business. I get that in certain cases that's not the optimal situation for resource allocation but freedom has a price.

They could function as independent countries, for better or worse. But it generally looks like states don't want more autonomy: over 240 years the US federal government has taken on more and more power at the expense of the states, facing minimal resistance apart from a single bloody civil war where the heroes are universally agreed to be the side fighting for more powers for the federal government.

> civil war where the heroes are universally agreed to be the side fighting for more powers for the federal government.

The Union wasn't fighting for more powers for the federal government, just for the integrity of the existing federal government and it's powers.

The war resulted in some expansion of federal power, but that wasn't what motivated the Union.

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