Hacker News Reader

Comment by gerad | Hacker News Reader

Earn $1000 = $500 after taxes. :)

Ah, the endowment effect. I don't understand why people worry about taxes so much.

I mean, the way I see (you can add it to the list of mental models), there is a flow of money going through you. Some of the flows you can influence more, some of them less. There is no such thing as "your money". It's really arbitrary where we draw the line.

For example, most people consider money they earned (before taxes) as theirs, while money spent on mortgage/rent as someone's else. In reality, they often have about the same practical ability to influence the amount in both flows.

Depending on where you live, that extra 5 hundred means that the streets are safe, you have clean drinking water on tap and if you get hit by a car crossing the stree you'll probably make it. And defence and welfare and such and such. suck it up. Taxes have a point.

> suck it up. Taxes have a point.

Your comment feels completely out of line.

This comment thread is talking about mental models about money. The GP comment isn't complaining about taxes. Most likely, the observation about taxes is to say that earning an additional $1000 income does not translate into the same amount that could be spent. Or something similar, related to the mental model topic they're talking about.

He should probably have elaborated on that then imo. It seems like a low effort post if that was what he was trying to convey. However the comment you're replying to is also a useful mental model. Even though tax is "money spent", it is coming back to you through having a safer environment. Therefore it shouldn't be considered "wasted money" at the very least.

Although the last sentence of the comment doesn't add much to his point.

>He should probably have elaborated on that then imo.

Maybe you shouldn't jump to conclusions and react aggressively to innocuous things?

Sorry if my post comes off terse but truthfully there is a narrative in these (hackernews) boards that thinks taxes == bad. I react strongly to this because I live in Australia and we have taxes and they provide a lot of good.

Sure, I pay a bit more in Medicare levy or income tax but I don't ever look at it. I know when I get sick I just go to the doctor and its' sorted, For $70 at that time with a rebate of $35 and then if I'm getting a script filled it's usually under $15 dollars. And if i have no cash i can take a bus a little further out and bulk bill.

The same people who think that taxes are bad in this place are usually (I know I'm generalizing) the same people that bemoan company taxes. Yet if you look at places like Australia and elsewhere it's those same companies that pay no tax in our jurisdictions at all. I appreciate that our laws make this so. But there is the letter of the law and the spirit of the law. And those companies/people make a choice.

Interesting side note: The people who run those companies are usually talking about UBI. Who the f--k is going to pay for that if those companies don't pay tax.

But hey, what do I know I just pay tax and never really worry about it. If I have money I do stuff. If I have less money, I do less stuff.

It's important that peoples mental models of tax do not regress to thinking it's just a cash grab. If you think government wastes money there are plenty of opportunities to get involved to change that or your way of thinking. But reducing the concept of taxes like this a real danger to any form of productive social contract.

I use the multiplier the other way around. When I am about to spend $100, I remember it’s about $150-160 in earned money.

Depends on the country. In US, it seems that everybody does their taxes and all salaries and income are discussed as "before tax"; in Russia, for example, all taxes and payments for employees are done on employer's side and all salaries and income are usually discussed as "after tax" - people don't even usually know how much are they earning "before tax".

Same here in the UK. You can look at how much tax you've paid on your payslip, but you never feel like that money was yours in the first place since it never hits your bank.

I had to complete a tax return for the first time last year, although it's completely illogical (and I'd budgeted the number so knew what it would be well in advance), it felt more painful paying the ~£_,000 of extra tax I owed than paying the ~£_0,000 of tax that had been automagically deducted from my pay packet.

> You can look at how much tax you've paid on your payslip, but you never feel like that money was yours in the first place since it never hits your bank.

It is the same in the US - however, if you get a job offer in the US for a given salary - that is a pre-tax number. I believe the grandparent was making the point that in Russia, salary and wages are discussed purely in after-tax terms.

>>...but you never feel like that money was yours in the first place since it never hits your bank.

A politician (republican-ish, Scandinavia) once told me, that the whole tax-system would fall apart if people were paid their salaries in full and had to pay their taxes in cash.

It is of course absurd and impractical in our day and age, but I think most people are blind to the amount of tax they pay.

Well, salaries paid in full would certainly give more power to the taxpayer who would in turn demand more accountabilty from the politican. Perhaps the politician in your story is a bit biased and is spreading FUD.

I hate how governments do that. It's as if they're interested in not letting people know how much things cost to run, and making them feel that they're getting a lot for their (seemingly) low taxes.

How can you handle more complex scenarios without knowing your before tax salaries?

For example, working two jobs.

don't work two jobs, be happier

Simple and predictable tax code that almost never depends on any particular person: flat 13% tax. (It's much worse and complicated for companies though).

More like 800, I don't know why people like to exaggerate how much goes to taxes. Median marginal federal tax rate is 15%, which means on average it's less than that.

Depends on country. Here, for a salary you typically pay 45% tax and the employer pays an additional 2.25% - so that's pretty close to the parent comment. (however, for e.g. stock gains you only need to pay 10%)

I would be very surprised if the median HN user had a marginal tax rate of 15%. At last year's rates, I would expect something like 36%. Of this, 28% is federal, 1.45% is payroll, and 9.3% is state. These add up to more than 36% because of deductions.

Hello from Scandinavia!

(Ok, I don't live there any more but... )

I meant post tax earnings, of course.

Not spend $500=$500 after taxes.

Reply on news.ycombinator.com