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Comment by klausjensen | Hacker News Reader

In 2010 in Denmark there was an initiative done for people wanting to pay more in taxes - people who claimed in the public debate, that they really wanted to pay more.

The tax department opened up a bank account, that people could pay in extra taxes for, if they wanted. If you felt like you should pay more, you could.

Two years later, the initiative was shut down - having accumulated about 15000USD (fifteen THOUSAND) - in a country with 5.5M inhabitants.

A lot of people want OTHERS to pay more in taxes and some people SAY they should pay more in taxes to score some cheap karma-points. Almost nobody ACTUALLY want to pay more in taxes.

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I don't believe I am able to pay enough to make a difference.

I believe that if all people of my income paid more, we could make a difference.

I support all people of my income, including me, paying more taxes and opposed me alone paying more taxes.

The evidence you've provided does not provide significant support to your conclusion.

Here's what WOULD support your conclusion: If given the choice between someone who would increase taxes for people of my income or keeping them the same/lower (ceteris paribus), I voted for the latter. If I'm voting for the former, that straight up contradicts your position.

Guess how I vote. Guess how the author votes.

I think your point support theirs, actually.

You don't want to pay more in taxes -- you don't believe it would make a difference, despite knowing how numbers work, and knowing that it literally would. I suspect you mean that the marginal difference for the government doesn't justify the loss for you.

That's fair, but it's exactly GP's point: you don't want to pay more taxes, because you don't care when there's no reward for you personally; instead, you want millions of people to pay more taxes for your benefit.

If I alone pay more taxes, I do not see enough benefit to justify the cost.

If all people pay more taxes, a large majority of us will see a net benefit that outweighs our own cost.

I support raising taxes for everyone, including myself. This should not be a difficult concept to understand.

It's actually very difficult to understand because it seems nonsensical on the face of it. If people paying more taxes is a net good, then certainly any amount of additional taxes collected would be a net good.

Are you suggesting that there's a magic threshold that needs to be crossed where individual contributions amount to more than the sum of their parts? If so, what is it, and why does it exist? And why does that threshold always seem to be conveniently too high for people who claim they want to contribute more?

Since we're on HN, I'll give you an example of a pretty successful startup built on those "magic thresholds": Kickstarter.

Yes, of course having more money scales the ROI superlinearly. Lots of projects can't be done at all without a minimum investment. Others just have economies of scale (e.g. dilution of fixed overhead).

And considering that the government usually does stuff on very large scales, it's not strange that a single taxpayer's contribution is too small to be meaningful. Just creating a government program probably takes more than what I pay yearly.

The government is not in the position of a “kickstarter”. It has tons of revenue already, so your point doesn’t make sense.

Paying more personal taxes voluntarily is a net loss to me personally. Everyone in my income band paying more tax is the same absolute loss in income, but the net loss is substantially reduced due to the additional governmental funds, perhaps even becoming a net gain.

Clearly there are returns to scale that you can't have if you are alone in paying.

No, I'd say they want millions of people to pay more taxes (including themselves) for everyone's benefit. The comparison is between an account that a few people can contribute to and not make a significant difference, vs everyone agreeing to raise tax rates and therefore have more common wealth.

Society benefits from taxes being spent on amenities, healthcare, education, police, when less taxes are spent everyone benefits less.

> You don't want to pay more in taxes -- you don't believe it would make a difference, despite knowing how numbers work, and knowing that it literally would. I suspect you mean that the marginal difference for the government doesn't justify the loss for you.

That's exactly how numbers work. Marginal increase of income from a single taxpayer is worthless to the government in isolation, and has zero impact for anyone. Hell, it's probably of strictly negative value if someone has to create a special account and procedures just for you.

Consider this as an illustrative example: if you were to suddenly start paying 2x the taxes you used to, literally nothing the government provides would change for you, or for anyone else for that matter. But if the entire country suddenly started paying 2x the taxes, you could expect much increased quantity and quality of public services.

Just like many private enterprises, government services too tend to have a lot of fixed costs, low marginal costs, and non-uniform access patterns.

I think this partly comes down to what country you live in - If I lived in a Scandinavian country where it seems like people get pretty good value for their tax dollars I would be ok with paying a higher tax rate. If I lived in the USA where tax dollars are wasted on wars in the Middle East and building useless walls I would want to pay as little as possible.

>I don't believe I am able to pay enough to make a difference.

I donate money and goods to a couple, carefully selected, charities every year. Having volunteered for them on a couple of occasions, I can definitely tell you my relatively modest help DID make a big difference to at least a few families.

I am not forcing anyone else to be charitable, yet there are many people who give (much more than I do).

There are two problems with your thinking:

- the return on our taxes paid in the USA is very, very low - we pay only a bit less in taxes then people in Europe, yet the infrastructure is crumbling, there are lots of desolate/mentally ill people in the streets, etc.

- you seem to want to FORCE people to pay more tax for your noble causes. Guess what - not everyone will agree with you what they are. That's why taxes should be limited to defense, law enforcement, public infrastructure, standardization, etc.

I think my wife and I should pay more in taxes. I also feel that I shouldn't die on my sword and voluntarily pay more in taxes whilst others in my income bracket don't. There is nothing contradictory in this. But suppose you think it is hypocritical of me to think tax rates should be higher for people like me while not voluntarily paying more in taxes. At most you can conclude that I'm a hypocrite.

My hypocrisy does not detract from the veracity of the belief that taxes should be higher for people like me. That belief is correct/true/valid or wrong independent of my hypocrisy.

That's bad reasoning. Every dollar you give helps people. What other people do doesn't affect that. So, yes, hypocrisy. You just don't want to pay more.

OK. I'm a hypocrite. I do vote for higher taxes on myself and others. So I guess the last sentence you wrote isn't entirely correct.

You do realize that people do seemingly contradictory things, right? And sometimes have overtly contradictory beliefs relative to their actions. As Saint Paul referenced; the thorn in his side.

My beliefs versus my actions in this instance is an aspect of the free rider problem. Look it up.

I'm aware of the free rider problem. I'm willing to bet, by the way, that the author of the article does pay a lot more in taxes than he thinks. People often speak as if effective tax rate were the net amount. That's something to think about in the context of free riders.

If you are aware of the free rider problem then you oughtn't be unaware that people can believe that something should be done but won't do it if they aren't forced to.

Why give it through a middle man (government) if you can donate it directly to the hungry mouths? It’s not like there’s a 2:1 match on your taxes. At best it flows through 1:1 and that’s at best.

I choose to live in a society and I want to live in a society that maintains a certain level of humanity. To run this enterprise that we call society requires a government (I do not at all agree with anarchism). That government requires money to run. Hence the need for taxes and right now taxes in the U.S. are low relative to the last 50 years.

I don't know anyone who is hungry so I can't directly give food to the hungry. One can seek out an organization to provides food for the hungry. I believe that the organization best suited to do this government. Besides, there is more to the proper running of a society than just feeding hungry people.

We need roads, sewers, clean water, a legal system, police, teachers, etc. The umbrella organization that we give money to in order to provide these things is the government.

> One can seek out an organization to provides food for the hungry. I believe that the organization best suited to do this government.

Empirically speaking, government is one of the least suited and efficient organizations to do this [1].

“[Government] income redistribution agencies are estimated to absorb about two-thirds of each dollar budgeted to them in overhead costs, and in some cases as much as three-quarters of each dollar. Using government data, Robert L. Woodson (1989, p. 63) calculated that, on average, 70 cents of each dollar budgeted for government assistance goes not to the poor, but to the members of the welfare bureaucracy and others serving the poor. Michael Tanner (1996, p. 136 n. 18) cites regional studies supporting this 70/30 split.

“In contrast, administrative and other operating costs in private charities absorb, on average, only one-third or less of each dollar donated, leaving the other two-thirds (or more) to be delivered to recipients. Charity Navigator, www.charitynavigator.org the newest of several private sector organizations that rate charities by various criteria and supply that information to the public on their web sites, found that, as of 2004, 70 percent of charities they rated spent at least 75 percent of their budgets on the programs and services they exist to provide, and 90 percent spent at least 65 percent. The median administrative expense among all charities in their sample was only 10.3 percent.”

[1] http://mises.org/journals/jls/21_2/21_2_1.pdf

Widespread undernourishment and hunger was not defeated by charity. It was defeated by government. Widespread access to clean water was not accomplished by charity. It was accomplished by government. Widespread access to education was not accomplished by charity. It was accomplished by government. Widespread access to medical care for poor children was not accomplished by charity. It was accomplished by government.

Thus it is safe to say that government is much more efficient at accomplishing these goals than charity. Charity is much more efficient at the margins. It’s great for the fringe cases once the majority of the problem has been addressed.

I think it's possible for an additional tax dollar to help people, for sure. But it seems unreasonable to assume that a positive tax revenue delta will manifest in useful or well-managed social programs. Additional money in the public coffers is a necessary precondition for expanded social programs of value, but there are still problems of management, possibilities that the money will be spent on unjustified wars, etc.

Every dollar you pay can potentially help people. I don't disagree. BUT: you're blatantly ignoring the massive amounts of money that are being wasted by government (and I'm not talking about good universal healthcare and decent pensions here)

It's all great in theory, but every single developed country wastes billions in taxpayers money every year on all sorts of irrelevant things. Politician pet projects. Projects going massively wrong and overrunning in cost at inflated prices. Inefficiencies. Etc..

I'd rather donate a healthy amount of money to a nonprofit of my choice (and yes, take the tax deduction for doing that -- can donate almost twice as much!). Those charities generally will be able to allocate said resources much more efficiently.

What a ridiculous argument. "You say you support US fighting in Syria, but you haven't personally intervened by purchasing a gun and plane ticket!"

"I want to pay more taxes" is obviously a stand-in for "tax rates should be higher", not because we love taxes, but because they help us achieve national priorities. Individual action doesn't do that, which is precisely why they're national priorities.

The only reason you don't pay more in taxes is because you don't like the feels of not keeping up with the Joneses?

Okay, but I don't regard you as an sort of moral actor for that: you intentionally don't do something you readily admit would make the situation better, out of your emotional needs, while politicking to force everyone to do the thing you're not actually willing to do yourself.

So no, I simply don't believe you: I don't think you believe you should pay higher taxes, I think you believe other people in your income bracket should, to run society the way you envision. If somehow that didn't apply to you, but applied to every one, well that would be just fine wouldn't it?

I originally didn't agree with GP, but the posts like yours trying to refute it are actually bringing me around to that position -- because they're deeply morally compromised, full of special pleading, and so on.

You've made a mistake. You wrote:

..you're not actually willing to do yourself."

That should be:

...you're not actually willing to do solely by yourself.

As I said, what does it matter if I'm a hypocrite? My belief that taxes should be higher for people like me is true or false independent of my hypocrisy. The question of taxation levels should not be determined or influenced by the level of my own personal hypocrisy.

I don't think you believe you should pay higher taxes, I think you believe other people in your income bracket should,..

You inserted other. This is wrong. I believe all people in my income bracket should pay more in taxes. This includes me. I do believe that government should tax me more. I'm also not going to donate more to the government if it isn't forced. Free rider problem and all that.

There's no special pleading in my position and I don't claim that my position on taxation levels is some sort of moral action on my part. All I've said is the following 2 things:

1. Taxes should higher for people in my income bracket.

2. I'm not going donate more to the government than what is required.

Make of this what you will. I'm a hypocrite. But I still think taxes should be higher for people in my income bracket and this obviously includes myself.

The only reason you don't pay more in taxes is because you don't like the feels of not keeping up with the Joneses?

That's not what they said, at all. You appear to think everyone is maximally selfish and short-sighted:

you believe others should pay...if that somehow didn't apply to you...that'd be just fine

That is not the case. Not everyone thinks like this.

Perhaps willing your estate to the state would be a way to resolve this hypocrisy? While you are alive you don't put yourself at a disadvantage and can act as an investment manager for your future donation to the government. Once you die, you will no longer have anything to lose by donating everything you have left to the government. Obviously if you have heirs it becomes a bit more complicated.

Having thought about this a bit more, the idea of "not being taxed enough" is not necessarily about raising revenue for the government. They don't need to take your money to tax you, they can just print money and tax everyone with inflation. The point of taxing the "rich" more is to level the playing field. It is prevent power from concentrating in people who are not democratically accountable. So in that case, donating your estate will not achieve that goal.

I don’t think my position is hypocritical and even if it is I’m not looking for a way to resolve it. I believe taxes should be higher for people in my income bracket. I also will not be donating to the government. I have not problem with this state of affairs. Others seem to have a problem with it though.

Whether or not taxes should be raised is independent of whatever level of hypocrisy I possess.

> Almost nobody ACTUALLY want to pay more in taxes.

That's a silly conclusion.

I'll gladly vote for a policy measure that benefits a group of people at the expense of a group of people among which I find myself.

But I won't vote for a policy measure that benefits a group of people at the expense of just myself and nobody else. In that case, I would prefer a straight up donation of my own choosing. As such, this Danish bank account would see no money from me.

Both you and apparently Denmark don't understand how basic collective action problems work. The point is that individual action is often insufficient, while coordinated action isn't. It's entirely consistent to want a coordinated rule that hurts you individually but not want to take the corresponding individual action. Hell, there's even situations in which it would be rational for _every_ party to want a rule constricting their individual actions without it being rational to take that action individually (ie with no guarantee that the rest of the group isn't defecting).

If you're familiar with the prisoner's dilemma, which is a toy, two-party example, there's a massive difference between coordinating cooperation and unilaterally taking the cooperate action.

We’re discussing “government budget” here. The marginal revenue brought by that extra payment is exactly the same as when everyone else pays it.

Yes, and that marginal revenue from a single taxpayer isn't enough to do anything of consequence. It's too simple-minded a model to treat government capabilities as a function of revenue as continuous. This is exacerbated by the fact that voluntary donations would be a highly volatile revenue source, correlated with economic growth in ways that are much more complicated than an income tax covering the entire population in a well-defined way does. That uncertainty around revenue is costly, further reducing the utility of the marginal revenue.

For an overly reductive example: a rich person could support higher taxes (including his own) to be raised to a level that could feasibly fund a social safety net on par with a UBI. If he were to unilaterally provide his portion of higher tax revenues, the government wouldn't instantly implement a minuscule, partial increase in the safety net. OTOH, a consistent tax regime based around a consistently higher revenue base is a fiscal environment in which we could move further towards this person's preferred policies.

(Note that I'm making no endorsement or rejection of the specific policy described above, just using it as an example to point out how nonsensical the complaint in this thread is).

You're mixing up a bunch of different issues.

I'm not saying it is irrational for the author to advocate raising taxes for everyone, including themselves. I'm saying that if the author really thought donating that extra $X to the government (when other people do) was such a good idea, they would be donating it right now even if other people don't. The reason is that the marginal benefit to the government of the author handing them an extra $X when other people do the same is no higher than when they don't.

Unless, of course, the author plans to dodge the tax themselves once taxes are raised for everyone.

The prisoner's dilemma is not a valid comparison because donating when the other person doesn't yields an equal or higher marginal return as donating when the other person does. In the prisoner's dilemma it's the other way around: cooperating when the other person defects results in a lower marginal return than when the other person cooperates.

I'm saying that if the author really thought donating that extra $X to the government (when other people do) was such a good idea, they would be donating it right now even if other people don't.

This is an aspect of human behavior. Sometimes people won’t do something if they aren’t forced to even if they think its a good idea. This is why the free rider problem exists. Your conclusion ignores facts surrounding human psychology. People don’t see a $1,000 donation to the government as being helpful if it’s just them doing it. They can see it being beneficial if millions of people do it. Hence an individual is unlikely to make a voluntary donation to the government whilst supporting increased taxation for everyone in their income bracket.

> Your conclusion ignores facts surrounding human psychology.

Which conclusion? You basically said I'm correct.

I quoted and if/then type statement you made. That statement’s conclusion does not follow from that statement’s premise. I clearly did not agree with that statement and gave reasons for why it is obviously false.

Are you referring to this one?

> if the author really thought donating that extra $X to the government (when other people do) was such a good idea, they would be donating it right now

Which part are you disputing? Your comments about human psychology merely support the fact that the author doesn't really think it's a good idea, and that there are psychological factors other than rationality and honesty at play.

Almost nobody ACTUALLY want to pay more in taxes.

I don’t want to pay more taxes. I want myself and those in my peer group to pay more taxes. Your referenced experiment proved little other than that a few of the Dutch don’t understand game theory (or are just really philanthropic).

People from Denmark are Danish, people from the Netherlands are Dutch :)

A lot of people want OTHERS to pay more in taxes

Or perhaps people want everyone, including themselves, to pay more taxes. A fair, equitable, and shared burden.

If it's just you, you feel like a sucker being taken advantage of.

There is a line every year in Canadian income tax forms that lets you contribute to paying down the national debt. Not sure how much they collect; you don't get a tax benefit from it.

> A lot of people want OTHERS to pay more in taxes

If "a lot of people" is simply the 99.9%, and "Others" are the super rich 0.1%... I'm pretty sure the 99.9% would massively benefit... and the "others" would probably still be extremely rich.

Well obviously you can't buy a new hospital if your neighbour doesn't also contribute.

What they should have done is make a rule that says if I pay into this special account, everyone else's tax rate goes up.

See what happens then.

By that logic, everyone wants the tax rate to be 0%, and the penalty for murder to be a stern talking to. If you think you should go to prison for murder, you're free to do so!

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