Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Wealthy AI workers send San Francisco house prices soaring

bbc.com

Post reply on HN
Print view View original

61–70 of 76 posts

Re: Wealthy AI workers send San Francisco house prices soaring

#61

Post by satvikpendem »

roenxi wrote: post #42
ekelsen wrote: post #19

Earlier quoted context omitted.

At least for me, even income taxes as high as 53% have not discouraged me from trying to make more money. They have made me consider moving. At some level, certainly at 90%+, the most rational thing to do to make more money is to spend time lowering your tax bill, which is not a particularly beneficial way (to society) of making more money. But I can't image anyone at an income tax level of say 10% is being actively…

Prices are set on the margins, the reason people are paid what they are is because even a relatively small change would cause someone to do something differently. Same theory as why we can be confident raising the price of something a few cents is likely to cause someone to change their decisions - if it wasn't, the seller would raise the price by a few cents. It isn't obvious what a 10% across-the-market tax will do…

Not necessarily, many things are sticky and inelastic where in a perfectly economically driven world they'd be elastic. People for example still paid for eggs even as the egg companies made record profits during the pandemic, turns out it wasn't all the bird flu.

Re: Wealthy AI workers send San Francisco house prices soaring

#62

Post by roenxi »

ekelsen wrote: post #59
roenxi wrote: post #42

Earlier quoted context omitted.

Prices are set on the margins, the reason people are paid what they are is because even a relatively small change would cause someone to do something differently. Same theory as why we can be confident raising the price of something a few cents is likely to cause someone to change their decisions - if it wasn't, the seller would raise the price by a few cents. It isn't obvious what a 10% across-the-market tax will do…

I think you're relying far too much on an econ 101 idea to analyze a situation that's far more complicated.

[flagged]

Re: Wealthy AI workers send San Francisco house prices soaring

#63

Post by satvikpendem »

shinryuu wrote: post #35
fyredge wrote: post #25

Earlier quoted context omitted.

I was initially skeptical of removal of income tax, but it's replacement with consumption tax makes sense. Currently, income is "discouraged" through financial instruments such as Securities-Backed Line of Credit (SBLOC), which are very much only feasible in the realm of the very rich. Some part of this loophole can be offset by corporate tax, but corporate tax is based on profit, not income, incentivising all sorts…

The problem with consumption tax is that it's regressive. Poor(er) people are hit harder with such a tax.

That's why the quote explicitly says "Instead, impose a consumption tax, designed to be progressive to protect lower-income households." Now how that's calculated I'm not quite sure, maybe they'd pull up your income details at every point of sale.

Re: Wealthy AI workers send San Francisco house prices soaring

#64

Post by satvikpendem »

dpark wrote: post #52
hollerith wrote: post #46

Earlier quoted context omitted.

>spends zero words to explain how a progressive consumption tax might possibly be implemented. The implementation could consist of a tax on personal income, but any re-investment of that income is deductible, plus a tax on luxury items and products whose main purpose is status-signaling.

You’ve gotta squint each hard to call an income tax with deductions a consumption tax. That’s what we have in the US right now.

Not really especially for W2 employees as they have very few deductions. In contrast, I have an LLC for my work and I can pay basically zero tax by reinvesting it into business expenses (which are consumption like new office equipment or client meals) or even funneling it into my 401k. That's the model they mean, not the current W2 deduction model.

Re: Wealthy AI workers send San Francisco house prices soaring

#65

Post by spwa4 »

rayiner wrote: post #10
smitty1e wrote: post #9

Earlier quoted context omitted.

Why hasn't AI proposed the ultimate "fair" taxation scheme?

We already have expert consensus on what’s the best taxes, people just don’t like the answer: https://www.npr.org/sections/money/2012/07/19/157047211/six-... (“Three. Eliminate the corporate income tax. Completely. If companies reinvest the money into their businesses, that's good. Don't tax companies in an effort to tax rich people. Four. Eliminate all income and payroll taxes. All of them. For everyone. Taxes disco…

This is easily defeated by fake companies. This only works if companies always work in the best interest of the economy. If someone were to create a company that sells doohickeys for profit AND to make sure one particular family is comfortable (ie. directly providing housing for them, servants, an "expense account", ...) that would defeat such a tax scheme.

Systems are built on human behavior. Humans who spend entire lives looking for ways to exploit system. The above system was tried, and indeed got exploited for luxury in a big way.

To some extent I agree to the income tax idea. But you're far too extreme. Income tax makes jobs possible or impossible. The lower it is, the more occupations are realistic to have. So we should have a rule for governments: if unemployment is above, say, 4%, income tax must go down until unemployment drops below that 4%. If unemployment is below 2%, income tax should rise, and the state should be forced to deal with the lost income. This probably isn't a good rule as stated, but something along these lines would be good.

Re: Wealthy AI workers send San Francisco house prices soaring

#66

Post by TimorousBestie »

rayiner wrote: post #60
TimorousBestie wrote: post #50

Earlier quoted context omitted.

> This approach is the perfect "the richer get richer" inequality engine that would run things even faster than our current system (which works pretty well already). That’s the idea. Lawyers accustomed to the patronage of wealthy clients need more of them to maintain their lifestyle.

No, I'm just another third worlder who escaped a socialist country.

As you remind us all once or twice a day. The two things aren’t mutually exclusive, of course.

Re: Wealthy AI workers send San Francisco house prices soaring

#67

Post by dpark »

satvikpendem wrote: post #64
dpark wrote: post #52

Earlier quoted context omitted.

You’ve gotta squint each hard to call an income tax with deductions a consumption tax. That’s what we have in the US right now.

Not really especially for W2 employees as they have very few deductions. In contrast, I have an LLC for my work and I can pay basically zero tax by reinvesting it into business expenses (which are consumption like new office equipment or client meals) or even funneling it into my 401k. That's the model they mean, not the current W2 deduction model.

> Not really especially for W2 employees as they have very few deductions

Right. Individuals are taxed on income and not consumption. Taxes don’t go down if they save instead of spend (in fact they go up as they are taxed on the interest earned). There’s nothing about this that’s consumption based so a replacement system that looks basically the same but with more deductions is also not a consumption tax.

Businesses are weird already and are taxed on profit rather than income. Anything that reduces profit on paper reduces tax, whether it’s actually consumption or not (e.g. stock buy backs).

Re: Wealthy AI workers send San Francisco house prices soaring

#68

Post by rayiner »

TimorousBestie wrote: post #66
rayiner wrote: post #60

Earlier quoted context omitted.

No, I'm just another third worlder who escaped a socialist country.

As you remind us all once or twice a day. The two things aren’t mutually exclusive, of course.

Yet you continue to make ad hominem arguments based on imagined motivations.

Re: Wealthy AI workers send San Francisco house prices soaring

#69

Post by satvikpendem »

dpark wrote: post #67
satvikpendem wrote: post #64

Earlier quoted context omitted.

Not really especially for W2 employees as they have very few deductions. In contrast, I have an LLC for my work and I can pay basically zero tax by reinvesting it into business expenses (which are consumption like new office equipment or client meals) or even funneling it into my 401k. That's the model they mean, not the current W2 deduction model.

> Not really especially for W2 employees as they have very few deductions Right. Individuals are taxed on income and not consumption. Taxes don’t go down if they save instead of spend (in fact they go up as they are taxed on the interest earned). There’s nothing about this that’s consumption based so a replacement system that looks basically the same but with more deductions is also not a consumption tax. Businesses…

Hence allowing individuals to not have income tax but instead have deductions based on consumption as that stimulates the economy.

Re: Wealthy AI workers send San Francisco house prices soaring

#70

Post by hollerith »

satvikpendem wrote: post #64
dpark wrote: post #52

Earlier quoted context omitted.

You’ve gotta squint each hard to call an income tax with deductions a consumption tax. That’s what we have in the US right now.

Not really especially for W2 employees as they have very few deductions. In contrast, I have an LLC for my work and I can pay basically zero tax by reinvesting it into business expenses (which are consumption like new office equipment or client meals) or even funneling it into my 401k. That's the model they mean, not the current W2 deduction model.

>That's the model they mean

You have incorrectly summarized the position of Rayiner and me.

Let us oversimplify and assume all spending by individuals is either consumption or investment.

Rayiner and I advocated for taxing consumption, but leaving investment untaxed. (And then I suggested that a tax on consumption could be implemented as a tax on income where any spending on any investment is fully deductible.)

You seem to be advocating something different.

For the sake of completeness, we should include a third category of spending, namely, spending necessary to earn money. If we don't leave that untaxed, then an individual can get himself in a situation in which he owes more taxes than he actually earned, which is an undesirable property for any tax system.

But there is a lot of spending, particularly by high-income people, that is not investment and is not spending necessary to earn money. Examples: expensive country-club memberships, yachts, $5000 dresses. Rayiner and I are calling that consumption.

Some spending is necessary just for the average person (i.e., almost everyone who doesn't have rich parents or a rich spouse) to maintain life. The tax system should refrain from taxing this kind of spending (and the US system approximately does in that individuals earning less than about 40K per year almost always owe zero federal income tax).

401Ks would be yet another category of spending that should probably remain untaxed / deductible.

Post reply on HN