Hacker News Reader

Comment by Retric | Hacker News Reader

Large countries are a very modern invention. Currently the only area outside of any countries is Antarctica but our ancestors had a real choice here and countries won at least until the “winners” became capable of large scale conquest.

The modern equivalent of moving outside a city for lower taxes still exists. It’s not framed as a willingness to pay more taxes but rather as access to better schools or parks etc. Still once again people are choosing to pay taxes for access to what taxes provide.

View on HN

Disagree with this. The people paying the tax for the most part aren't choosing to pay the tax. They just have no practical choice.

Taxes have massively increased over the last hundred years everywhere in the West. As the poster above said, there are large network effects and switching costs (border control and visas as well as actual relocation costs and language/culture barrier and losing family and friends) which practically prevent moving for most people, even if hypothetically they'd prefer to move to a lower tax location. This, coupled with the small number of countries, makes for a dire situation for international competition between countries to lower tax burdens.

It's the same reason crypto exchanges can get away with exorbitant fees. Nobody wants fees but the network effects are too sticky. So everyone pays the fees.

Any US citizen (or legal resident) is free to move to Puerto Rico tomorrow and stop paying Federal income tax.

Sounds like you didn't read my post. There are network effects (family) and switching costs that prevent that. It's why Coinbase can charge exorbitant fees. Yes people are "free" to trade on a cheaper exchange tomorrow but in reality they aren't.

And many like me have looked into this to discover higher local taxes..

You just completely ignored what I just said. Millions of Americans can cut their tax bills significantly by moving 1 mile or less and staying in the same country. In some cases it’s literally a question of which side of the street their on, but only one side gets access to the better school district so it’s also got higher property values because it’s a more desirable location.

That’s got ~zero impact on work, family, or friends and if nothing else they had that choice before moving into that home. Which is real evidence that people are both choosing higher taxes and desire them.

You've picked a niche edge case where the benefits of the local taxes are directly internalized into the individual via materially higher house prices and better schools. Of course I'm not going to opt-out of my taxes if those taxes are directly going back to me in proportion to the SES of my rich neighborhood (which is something that a lot of progressives are unhappy about), and not the person down the road. I also dispute that there aren't switching costs to pulling kids out of school in order to dodge state taxes that are much smaller, and for the large majority of people it is hardly as trivial as just moving down the road. Moving from CA to Texas just to reduce tax burden by a few percent might not be worth the switching costs. What if my family is in CA?

Anyway, this example doesn't translate to the majority of taxation which are more akin to transfer payments, and which are harder to escape from. My ROI from tax I pay into public health care is about -98%, which is much lower than the ROI of tax spend that goes into my own kids' school district or which directly pumps up my own house price. Just because I'm not abandoning my family doesn't mean that I'm choosing to fund public healthcare. In practice, I'm being coerced.

> I also dispute that there aren't switching costs

There are always switching costs to moving even within an apartment condo, but when someone decides to move picking a location has more freedom. Just as someone deciding to move across the country have freedom to pick inside or outside of a city so does someone from the UK moving to the US had a lot more freedom to consider Canada. Rates of migration consider each year in isolation, but over say a 50 year period a large percentage of the global population does move long distances and most of those people have significant freedom.

> Large countries are a very modern invention.

For much of history, most people lived in empires.

And lived and died something like six miles from where they were born.

History is limited to the written record and represents significantly less than 1% do the time humanity has been around.

Reply on news.ycombinator.com