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Comment by paxys | Hacker News Reader

Not all jurisdictions have sales taxes. And sales taxes aren't anywhere close to covering 100% of the budget for a city/state/country.

That foreign money mostly goes to a handful of landlords/Airbnbs and tourist-friendly businesses (which are often foreign owned themselves). That in turn drives up prices of everything for locals – who are seeing no increase in income and moreover have to pay income tax and a ton of other taxes on it, something that digital nomads conveniently skip.

An influx of foreigners and foreign money isn't automatically welcome in a local economy.

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For most purposes, a foreign tech worker is a lot like having an extra tourist on any given week. They are giving money to your local businesses, but aren't competing with locals on anything but housing. The locals are going to see an increase in income in the very same way that they do in tourist towns: Extra demand for goods and services will provide more jobs and quite possibly marginally higher wages.

Take a random tourist town: Say, in the southern coast of Spain. Then tell them that finally, they had managed to get rid of all the tourists, forever. Is that good or bad for the town? It's not as if there are no externalities, but in general, tourism is going to be good for your economy, and the amount of extra taxes the tourist pays on lodging is pretty low. Which Caribbean islands do better, those that have a lot of tourists, or those that don't take any external money?

Also consider what happens in the opposite side of the remote worker, where what you get is the equivalent of a foreign worker who comes in, pays taxes, but spends basically nothing, and spends all their salary in remittances, to be spent abroad by their family. The worker is competing with you for the job, but then doesn't spend it locally! You will not find many municipalities that are all that happy of having a lot of jobs formerly done by locals in offices suddenly done by someone that is far away.

> They are giving money to your local businesses, but aren't competing with locals on anything but housing.

Competing over housing i quite significant if you ask me.

Even that is a good thing for local developers and homeowners.

Still blatlantly ignoring the majority of people who are not wealthy enough to profit from tourism, but only get the downsides of it, which I'm not going to list here as they are many and proven.

Edit: No, more potential careers as an underpaid waiter or touristic guide is not an upside.

This is the primary reason housing is in crisis in the US. Tech workers and foreigners finding cheap but gentrifiable places and driving up the price of housing to the point no one can afford it but them.

While OP is right in that these people are a net good for the economy at large there's a reason a LOT of countries do not allow foreigners to own property. The US is one of the few places where you can without much trouble. You can see the problem this causes with states adjacent to California, like Nevada, where the average house is now over 10x the average income thanks to the tech emigration.

> is a lot like having an extra tourist on any given week

And as OP explained in the comment you're replying to, tourism is not necessarily a positive for the locals:

> That foreign money mostly goes to a handful of landlords/Airbnbs and tourist-friendly businesses (which are often foreign owned themselves). That in turn drives up prices of everything for locals – who are seeing no increase in income and moreover have to pay income tax and a ton of other taxes on it, something that digital nomads conveniently skip.

It doesn't really matter if you're a digital nomad or a classic tourist, the same downsides apply, but in the case of digital nomads they're even working while being on a tourist visa. They should pay taxes to the local administration but they don't, so that makes them a double problem.

You are assuming that all tourism is a net positive for any region, which itself is a faulty premise. In a lot of cases unchecked tourism, immigration and foreign money only increases the income divide among locals and contributes to inflation and gentrification.

Not all these foreigners are living in tourist towns. They aren't staying for a week or two, but months at a time. They aren't staying in hotels meant for tourists, but rather competing with locals for apartments (a lot of them having turned into Airbnbs because of it).

In most popular tourist destination there is a special tourist tax, paid at the hotel reception desk. Sometimes it is included into hotel rate and visible only in a detailed bill.

Maybe it's time for governments to stop relying on income taxes so much, and instead really on land/property taxes for the bulk of their revenue. Sales taxes are regressive, but there are ways to keep them from hurting lower income folks as much.

and even then, a digital nomad's expenditure inside their country _is income_ to the next hop. They're simply losing on a single hop in an infinite chain of taxation.

How is property tax a good substitute for income tax? Property is not a 1:1 to value creation.

Why punish value creation when you can punish rent-seeking? It is a strictly better substitute.

Using taxes as punishment makes for a very unreliable revenue stream. Rent seekers move on, and you're left with everyone else holding the bag.

That's the beauty of it. Land can't move.

It won't move, but the utilization will change to be minimize the cost.

I suspect that will be a net negative for anyone who needs to rent because they cannot afford a mortgage, maintenance cost, insurance, contribution to shared infrastructure like plumbing and electrical, and taxes together.

I considered renting an apartment in two different commune-owned buildings (I was a student, not looking to own). Both were just as expensive and in significantly worse condition than all of the neighboring housing options. I found w nice place, but would have been better off with a slumlord rent-seeker than either of those places.

> It won't move, but the utilization will change to be minimize the cost.

Yes people will build more medium density housing instead of having zucchini gardens in one of the most expensive regions of the world. Higher density would be good for renters in the local area.

This, taken to it's "extreme": https://en.wikipedia.org/wiki/Land_value_tax

Pretty well studied, and has a lot of support across ideological viewpoints.

Maybe it's time for governments to stop relying on taxes so much, period. Maybe they can reduce their scope a little bit.

I do wish that land value tax would replace other forms of taxation in many jurisdictions.

Moved to New Hampshire lately and I love it. No state income tax, no sales tax. Property tax is a little bit higher than where I used to live but on the whole I worked out that I still save $10k in a typical year in tax burden compared to the same value property there, not even considering the lower COL in other areas. Working from home in a quiet peaceful hobby farm in a cheap state is living the life.

Not many countries rely on income taxes. For example, Thailand has about 11% tax revenue from personal income tax: https://www.oecd.org/tax/tax-policy/revenue-statistics-asia-... Mexico is 20%: https://www.oecd.org/tax/tax-policy/revenue-statistics-latin... Vietnam is 8%: https://www.oecd.org/tax/tax-policy/revenue-statistics-asia-...

It is very hard to collect personal income tax in developing countries. OP's tax revenue claim just doesn't match the data. On the other hand, corporate tax and VAT are very easy to collect. Digital nomads are very good for these revenue streams.

It is true these digital nomads don't contribute to social security benefits. But they also rarely take from it. So it is a mixed bag.

Property taxes are extremely regressive. Probably the first or second most regressive tax you can conceive.

I, a lowly middle class worker buy a house in Cheapville. I can afford it, and the property tax, so I am happy. 20 years later I own my house and hundreds of thousands of immigrants from TechVille come buy up all the property. Great! There's no houses really on the market so the value sky rockets! Problem... my house value goes up, but so does my property tax. In fact, it's so expensive now I can no longer afford to live in the house. I have to sell MY PROPERTY because the STATE has imposed a tax specifically designed to destroy the idea of property as an owned right. In some circles this would be considered theft-by-taxation which is probably the only correct interpretation of this scenario. My house has to be sold because I can't afford it, it's bought (read: stolen) by some rich tech bozo with more money than sense, and I have to move. Probably to a different state where then I contribute to the very same problem there. The problem is the regressive property tax enabled this. The only solution is to not have them for residential non-commercial property. If property is not producing tangible value it should not be taxed. Taxes are collected at the sale of the home - this is enough. If it isn't, congress needs to tighten the purse strings.

Property taxes are regressive, prevent you from ever truly owning your own plot, and disproportionately reduce the wealth of the people who spend most of their lives creating it for other people. They are probably the most distilled form of evil the financiers of a state or country can create because they are totally unavoidable and because of the way percentages and property value are calculated can very quickly go way out of hand. The only people that benefit are the rich house flippers and people with so much money their property taxes are a rounding error. It puts property in only the hands of the wealthiest. How is this a good thing?

Sounds unfair, but why does that make it bad policy? Perfect fairness isn’t always a great policy goal.

> Property taxes are regressive, prevent you from ever truly owning your own plot, and disproportionately reduce the wealth of the people who spend most of their lives creating it for other people.

Property taxes are a form of wealth tax. The more wealth you own in the form of property, the more you pay in tax. Many people who work for a living don't own any property at all - about 35% of households in the US are renters. They don't have this problem of "wow my house is worth $1.2 million so I've got to sell it and move" - they've got bigger problems.

This is why California has property tax grandfathering for continuous owners and I fully support it.

Really? I thought the purpose was to create a new landed gentry, with hereditary title to land.

200 years from now, your descendants can pay their annual peppercorn to the state each year (after inflation and the statutory maximum annual increase have their expected effect) while the plebs toil in labor to pay you rent.

It really is such a shame that the founders of our country were so short-sighted that they explicitly prohibited that in the constitution. Maybe we should think about amending that.

I cannot get behind a property tax - if you own and have paid off a house, the idea that the state could seize it is abhorrent. Tax transport, wealth, sales - almost anything else in preference to property. Housing is a primary need.

What about land? Is it ok for someone to own a communal resource? Are property taxes a way of paying the community back for the exclusive use of a piece of land?

> Is it ok for someone to own a communal resource?

If there is zoning (and well managed conservation), I don't have a problem with it. I've lived near areas with no zooning at all, and that's a race to the bottom.

You could have 99 year leases or similar instead of ownership (Japan does this?), but that is unfair to e.g. grandchildren who inherit a farm which they've worked hard at all their lives (where land is essentially their means of income.)

Yes there is less land to go around, but that problem is ultimately overpopulation, and that's an _entirely_ different topic.

The reality is that to own property you need a means to enforce that ownership. That places a constant forever cost burden on the community at large. You need police to enforce against trespassing, you need a legal system to process and transfer titles of ownership, you need infrastructure that is in part supported by public funds, you need an army to defend against hostile takeovers from foreign powers. This notion that you can own a property and end all ties to your community is ludicrous.

Taxes are completely justifiable to allow you to have these means to enforce your ownership rights.

I'm not anti-tax, I'm anti-property-tax. You could cover community burdens through infrastructure tax, transport tax, real estate sales tax, etc, and even ultimately a wealth tax.

The issue with those taxes are that they are avoidable and then a property owner has found a way to not pay for the upkeep costs of their property again. The most straightforward way to ensure property owners are paying those costs is to apply the tax burden to the property itself and confiscate the property when it's not paid. It ensures timely payment of taxes.

Where you and I would agree is on the assessment methodology which is in most jurisdictions a money grab since it's usually always based on the market value of the property and not on the costs to provide necessary gov services.

> The issue with those taxes are that they are avoidable and then a property owner has found a way to not pay for the upkeep costs of their property again.

100% true that a physical property is not exactly going anywhere, and so it's extremely convenient to use as a stand-in for wealth / ability to pay taxes. That said, this could be worked around if governments were incented to do so, given that finance is almost entirely electronic at this point; offshore banking could be reined in, for example. There will always be loopholes and ways to avoid a tax burden, but if the (financial) penalties are commensurate to the dodge, then there's a reasonable disincentive.

soo... you want those that ammount to tourists to pay taxes in the country they visit? By your logic I should pay taxes to the country I go on holiday on the paycheck I get while being there.

You are forgetting the tax income from the money all those "tourists" spend in that country. Who do you think benefits from those taxes?

I do agree with you that it can befome a problem if those "tourists" start buying properties in those places. That should not be alowed without permanent residence (of, at least, a few years).

"That in turn drives up prices of everything for locals "===> Are you serious? Do you realise how many of these "tourists" (% wise) are needed to affect the market in a city? Even 1% is nothing more than a blip(IMHO).

> By your logic I should pay taxes to the country I go on holiday on the paycheck I get while being there.

No, because when your are on holiday it is not your place of employment.

All they want is if you are using somewhere as your place of employment, that you pay taxes that are due on earning that money in the country, the same as if your are employed locally. It's not unreasonable.

> Who do you think benefits from those taxes?

You can't pick and choose which taxes you want to pay and then say there is some 'benefit' for deigning to pay any at all.

Next time you stay in a hotel, try saying "I've shouldn't have to pay my bill, you should be grateful enough for the 'benefit' of the money I spent in the bar because I was staying here", and see how that works out.

This isn't about being a legitimate tourist though. That has always been allowed. There are not many jurisdictions around the world where you are allowed to work and not pay any taxes though. Just because there is a loophole where you _can_ work remotely and it's extremely hard to detect or enforce doesn't suddenly make it legal, you are simply violating the terms of your Visitor's visa.

Would income taxes from digital nomads make housing prices go down? There would be more money going to those governments but it's unclear that those governments could help offset most of the increase in costs.

No because they increase demand for housing while supply is fixed, and then have much more money than locals to get whatever housing they want. This is what happened in SF for example as techies invaded and displaced the non-tech middle and lower classes.

Technically true, but most countries make much greater use of VAT than the US does of sales tax.

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