Japan's Hometown Tax (2018)
kalzumeus.com
kalzumeus.com
> Educating children is incredibly expensive. The regions are quite annoyed that they pay to educate their children but that Tokyo reaps all the benefits. This state of affairs has continued for decades.
We see the same problem in USA states. State taxpayer dollars pay for some amount of public college education for state universities. These are typically called "State Appropriations", and varies between 30-80% of the student's overall tuition costs.
Back in the 1980's, taxpayers footed most college tuition using state appropriations, so college was "cheap" for students back then. Now (2023), (at least in my state, Michigan), state appropriations typically cover 20-40% of a college student's tuition.
There is concern with this though, because of what is called "brain drain". Citizens spend all these taxpayer dollars educating youth at colleges, then the graduates from U of M, etc all move out of state to California, Boston, Seattle, etc for big tech jobs.
Then the state of Michigan doesn't see any more tax dollars from those students. Which begs the question, why pay tax dollars for higher education if those who benefit from that education do not contribute back?
The customer was the in-state parent. Rest assured, they were taxed just fine.
The child, when it finishes college, should do whatever is best for the child.
If the kids are leaving the state, the problem is the state isn't attractive to the next generation. Not that the kid somehow skipped out on the state. Heck, the state had an inertial advantage over every other state and still couldn't keep the kid there.
Source: I grew up in Pennsylvania. Love the place. Left for greener pastures. Don't owe them anything out of my paychecks today. But my parents kicked into their coffers for decades and still do.
If you don't, you will only concentrate all kinds of problems on your largest cities, and even invent some wild new problem because cities can not survive all by themselves.
That said, a tax based on what city you happened to be born or identify with is the kind of weirdness that my culture can't assimilate. But it may make complete sense there (maybe because it's more traditionalist? do they want to be that traditionalist?).
There's no need to build another New York City when we already have New York City. It would be folly for the federal government to stand up a competitor to New York City.
But! It's not folly for Illinois or California to try. Competition is good.
Sure they are not prioritizing “walkability” (i.e walking through human feces and crowds of homeless people). Heck FL recently surpassed the population of New York state for the first time in history, not many seemed to notice. They’re not competing, they’re winning.
Neither the state collectively, non-parent residents of the state, nor the in-state parents get any future economic reward for funding higher education if the student leaves the state, so reducing the state's costs in that regard seems rational.
But that reduction in funding was part of the rise of the student loan industry, which subsequently seems to have completely deranged higher education funding.
A longer answer is that I suspect it's a bad idea in the long term. For one thing, I don't see how you wouldn't have "students who are disadvantaged for being born in the wrong state".
That seems to presuppose that the students don't benefit from the education and/or there's no interstate commerce.
I'll admit neglecting interstate commerce as a second order effect.
Part of the problem is that brain drain is a vicious cycle. Your home state is less attractive in part because of all the people in your field who left for "greener pastures".
And they have less funds to put into projects that might make the area more attractive, because they can't tax the people who left.
I'm not saying you owe anything out of your paycheck, but it is a problem. Both for the places being left and the overcrowded cities people are leaving to.
But RTO is still contentious, and the ability to find a job if I moved to vaguely-near-Boise would be terrible. One misstep at work, or even just another economic shift, and I'm moving again.
But I'd love to be in a smaller city. Annapolis MD, or coastal WA or deep mountains MT, whatever.
First, the states with the big cities they moved to also have smaller towns outside those cities that are fine for families. They can move to one of those and still have sufficient contact with the city to maintain their career.
Second, their spouse likely is not from the same state they are from, and may not want to move to that state. And they may not want to move to where the spouse is from.
And I know several parents who tried the "go it alone" method for a while, but eventually decided to move back to one of their hometowns, specifically to be closer to their parents for reasons related to their kids. Most of it seems to be a mix of wanting nearby, reliable childcare, as well as just wanting their kids to grow up with regular contact with their grandparents. (I've also seen the phenomenon where the grandparents, after retirement, end up moving to the parents' location, but often that requires the grandparents to move to a higher cost-of-living area, so I expect that happens less often.)
I don't plan to have kids, so this is certainly a grain-of-salt-worthy opinion, but it feels to me that parent-marriages would be on average healthier if the parents had easier childcare options so they can more often do "date night" type things. Certainly nearby grandparents is not the only way to achieve that, but it is one of the simplest options, assuming grandparents who are happy to be involved to that degree.
A possibility is a great affordability ratio - cheap housing as compared to the prevailing local wage.
Remember, inertia to stay where you you are from is strong, you just have to help it along
WV ain't got that tho -- Pitt is at least a real city, and it's mostly filling in after the collapse of industry.
I think you're mixing an opinion on high taxation in general (which you might be right about), versus how big metropolises enjoy labor that was raised somewhere else.
What does matter? My taxes, as parent. I pay soooo much taxes and I will continue to do so. As a result my kid is essentially forced to go to a college in state. And he will then FOR SURE move out of state. But I won’t.
So. It’s a cost to me. Like we are considering moving back to CA to get the UC discount. I will pay more in taxes but I’ll get a chunk of it back in tuition break.
Isn't the company that's hiring the graduate just as much a beneficiary for instance?
"Go to State" is a recommendation from the elders. If the parents poo-poo State the kid won't consider it seriously.
Listen to what these post graduate students want - for those who are moving a city like NYC or Boston they are probably enjoying not having urban sprawl, fun downtown areas, available housing, easy and accessible public transportation, etc.
I totally agree with everything you’re saying and listed but let’s not pretend the biggest item is anything but “higher salary” for most. We all know that some of these major metros have companies that pay 5-10x what you’d get in a small midwestern town.
Anecdotally, I did an internship in Cleveland followed by an internship in Santa Clara (Silicon Valley). I got job offers from both and chose California. The Cleveland company was a major donor to me school, so I got hounded by the schools career development office about why I chose to go to Santa Clara instead. They asked what the company could do to be more attractive to me - they mentioned intern ice cream parties, and Friday hours worked, and mentor programs, etc. The intern pay was $18/hr vs $80/hr, and when I brought it up, that was not a good answer - they wanted something cheaper easier and more superficial to change.
My point is that NYC and Boston have nothing to worry about, and nothing will change.
there's a lot of places in between "random midwestern town" and NYC that handily beat both on wages to COL ratio. even just looking at other major east coast cities like DC, atlanta, or boston, NYC is far more expensive and typical engineer pay is only a little higher.
I can see this working in Canada (or other states that want a boost in educated citizens). Subsidize education via forgivable loans, then forgive the loans if you work in-state. The main issue I see is that the US has a terrible history with loan forgiveness. You always hear stories of (eg) teachers who should get their loan forgiven being rejected for some paperwork issue or simply bank fraud.
Taxes are much like indentured servitude. We allow the government to do things that we wouldn't allow private entities to do.
> Or loans?
Loans for specified amounts are legal, subject to some fairly strict protections (limits on APR, discharging them in bankruptcy, lots of required disclosure). You can't generally write a profit-sharing agreement that way - how would you tell the person how much they're going to have to repay? How would you stop them declaring bankruptcy immediately to get out of it?
Decrease taxes, encourage entrepreneurship and VC funding, and Canadian salaries will rise while cost of living will come down.
College tuition is free, you're required to live and work in NY State for the same number of years that you accepted the state funding for after graduation. If you don't do that, the scholarship/grant becomes a loan.
And the world yell the same thing to USA. Canada, Italy, and England etc. all subsides their world-class universities with public funding. Where do the students go after graduation? US.
People who live in Michigan might hope that their children can access a good education.
Seattle is busy complaining about all those tech jobs, and how unfair it is that they make lots of money.
https://www.seattletimes.com/seattle-news/the-splitting-of-s...
Either way, the complains are pretty irrational. I live in San Francisco, where all the property owners are thrilled that their home value has surged in the past couple decades. Take away all the tech jobs, and see what happens to those home values... Can't have your cake and eat it too.
Why are people willing to pay more to get you to move to those areas? It just seems really weird, like there’s some man behind the curtain pulling strings to concentrate people in the above metro areas
The pandemic & work-from-home made people realize that these hubs aren't really as crucial to business success as people thought they were, but there's still a lot of institutional inertia (not to mention shitty companies requiring employees to return to office for no real reason aside from managerial power trips).
For the same reason that Detroit was the technical hub 100 years ago.
Smart people congregating leads to more smart people congregating.
America has a 40x gap between its smallest and largest state. Leaving Wyoming is the same as leaving SF for San Jose in population terms.
The exact tax details and how money is exactly moved around are, of course, the devil in the details.
But, forget all those very important but very arduous details for a minute, and just imagine that system up and working.
You pick some small town out there on the Gift website. You like, I dunno, Country Hams. There's a small place outside of Harrisburg, PA that specializes in that gift. They send you a medium sized ham around the holidays. It's not a mass market ham, as that's against the rules. It's real home grown and processed country ham. They put in some advert for the country ham festival in October or some month (I don't know anything about the ham world, sorry!). Its free tickets to get in. You think, hey, why not? Go out there, spend some hotel/AirBnB money, eat at the diners, buy gas, etc. Great little fall escape. You do this every year for a while. The town gets a reputation, they're the Country Ham town now.
Boom, a little cottage industry, government mandated to exist and help out the people there. The town gets to choose the cottage industry, of course. But they can leap frog it, make something of it, get things going again. Government is just coming in and priming the pump.
I don't know. There's something so damn wholesome about this idea that I just love it. Helping out each other, getting things moving again, diversifying the market, keeping things alive.
This is the devil that lives in the details. You have an industry of people who are trying to get these charitable donations, and the towns that can't afford that industry or don't have anything particularly commercializable to sell get left in the dust.
For every town that becomes Country Ham Town, you have hundreds of small towns who are "random postcard town" who only get a few bucks a year. It's tough to say if they even make money vs losing money on that.
What's wrong with this? If a town doesn't have anything to offer, then why does it exist at all? And why should anyone outside the town be supporting it to help its continued existence?
The western US is full of "ghost towns": towns that used to exist back in the 1800s during the mining boom then, but when the mines dried up, so did the towns. The people all left and the town fell back to nature. These days, there's usually nothing left besides building foundations, if that. Small towns these days that have nothing left to offer should go the same way.
I think you maybe missed all the details in the article that explains why it's a little unfair that the small towns spend money to educate their citizens, but then don't get to reap the benefits of that education?
I do agree with you that the end result in Japan is now a bit weird, since many people "pick their hometown" based on whatever gift/deal is available. But I think even in the original formulation, the benefits were much more than just "sentimental".
If the goal was to transfer some of Tokyo's tax income to towns that need it more, why not just do that, without all the complex bureaucracy and inefficient loss of tax revenue? If the beneficiary is meant to be the town that educated a person, why not run the system that way? (All that stuff is on record in Japan).
If a town has nothing to offer, then why exactly does it need to continue to exist?
>If the goal was to transfer some of Tokyo's tax income to towns that need it more, why not just do that, without all the complex bureaucracy and inefficient loss of tax revenue?
Who gets to decide which towns need help, and which towns are left to wither and die? This way, regular people decide which towns actually have some appeal and send their money there. Towns that have no appeal can go by the wayside. Just because a town existed in the past doesn't mean it needs to continue to exist. The population is falling and people are moving to cities because it's more economically efficient and there's more opportunities there. These towns have outlived their usefulness.
> This way, regular people decide which towns actually have some appeal and send their money there. Towns that have no appeal can go by the wayside.
People don't pick based on that "appeal" though. People pick based on what the "gift" is, so it's really just the towns that produce something people want to buy. But those towns were already doing fine!
To save some towns, I presume. Some places are probably worth saving; other places, not so much.
>But those towns were already doing fine!
Were they? They can probably use a little boost to help fund their schools or other infrastructure, to keep the towns worth living in for people.
>so it's really just the towns that produce something people want to buy
Sure, but why should a town that doesn't produce anything useful get any funding at all? Just because people lived in a place in the distant past doesn't mean people need to keep living there now. If it were really such a desirable place to live, people would be living there now, and there would be a functioning society, not just a bunch of stubborn elderly people waiting to die after all their kids and grandkids have moved to greener pastures.
What does that statement really mean?
I almost wish I could like church for those reasons.
I'm way more skeptical of the notion of church as a community now. If all the church community is via volunteer charity actions, just volunteer directly unaffiliated with a religion.
For me, it was sort of in-between. There wasn't a church-wide breakfast except for some small snacks during the big days (Easter Sunday and Christmas). But there was plenty of donation drives that would provide food for lower income families in the area. And you very much had a chance to worship and ask for a specific blessing, sometimes in a very public manner (This Boondocks clip is surprising accurate portrayal: https://www.youtube.com/watch?v=HtP7cbbAFLA)
> If all the church community is via volunteer charity actions, just volunteer directly unaffiliated with a religion.
That's the thing, I have tried. But in my experience, volunteer work to meet friends is fleeting. You won't be making a few deep connections even if you do your best to come every week, you'll see a revolving door of people who may only come once or twice. At least among my age group, there isn't much consistency in participation.
And that fleeting, revolving door seems to be theme of modern adult life. I don't know what in particular made the same people come to pray for some higher being every week, but it's something I haven't seen in any other attempt to meet people in my adult life.
Yep, Catholicism (American white-people Catholicism, at least) is weird like that. Maybe it's different in different places or among different ethnic-majority parishes, but I grew up in New Jersey and Maryland, and was dragged to mass weekly by my (devout) parents. There wasn't really any kind of community there; we showed up, took our seats, did the rituals, and then left and went home.
They also put me through CCD (Catholic version of "Sunday school") for 8 years, and while I want on some (more or less mandatory) retreats and activities with my fellow classmates, I don't recall any of those relationships extending outside class. I didn't end up forging any closer relationships with the other kids who went to my regular school, either. Granted, I may not be typical: I decided I didn't believe when I was in 5th or 6th grade, so I did the bare minimum just to get through it; maybe others tried harder and worked to make it more of a community.
I did work for our church's music director one summer in high school (mostly odd jobs and clerical stuff), and would play trumpet in the church's small ensemble for (rare) special events (regular mass just had a piano/organ player), but I didn't really get much out of that, aside from enjoying playing some music.
> but you can't even ask for a specific blessing, like "my son needs an A, can I get the whole church to pray for him" style stuff.
The church we went to in Maryland did have a small section of time devoted to community prayers. It wasn't specific, like they would just read a list of names (I think you had to sign up in advance to get someone on the list), and after each name, the congregation would respond "Lord, pray for them" or something like that.
> I'm way more skeptical of the notion of church as a community now.
I think it just depends on which religion/denomination, and the conditions in the local area. Some churches might do more to try to build community than others. And some churches might actually do build community, but many people who come for services just don't care to participate for whatever reason.
Personally I don't have a positive view of religion, but I do think it's a shame if some community-building has gone by the wayside due to declining church attendance.
That really depends on your individual parish in my experience. The church I grew up going to had donuts after ever 10:30am mass, and the one I go to now has free breakfast. I've also been to ones that have nothing at all.
It's also extremely common for Catholic churches to hold a "Friday Fish Fry" every Friday during Lent
Certainly there were people who were more involved -- the church had a youth group, for one thing, and a bunch of outreach programs. But those were the kind of things that you had to specifically seek out, apart from the usual religious services. And if you aren't going to get community-building out of the religious services themselves, then you might as well build community outside the church entirely.
Not saying that all religious/church communities are all the same; my girlfriend in high school was much more involved with her church community (different religion). But her experience seemed to be more of an outlier than the norm.
I felt the exact same way growing up. But that's the thing: while I hated church my parents/grandparents got really involved. It wasn't unusual for my grandparents to meet up with friends after Church at some buffet and talk, and my grandmother was involved in a few non-sunday service activities. My mother met a few friend in the area through church and sang on the choir.
I don't know if they were outliers, but the key here was 1) meeting people in the area (my mom moved constantly and church was one of the first things she joins) and 2) having an easy excuse to do something after church on Sunday. I struggle to do monthly rituals with friends nearby and meanwhile two generations of family could do weekly luncheons after participation in a place that was fine with bringing kids into.
I should note that this might still be a division of the genders, though. My Grandfather didn't do much more than drop off/pick up my grandmother.
Did you not have tea and coffee in the hall after? That was how it worked at mine.
Grew up in an evangelical church in Alberta, Canada. It's just gotten more and more political and more and more explicitly right-wing ideological.
That and a lot of the good work many churches do is strings-attached.
That's not to say there isn't amazing charity work being done by many churches and some amazing Christian humanitarian charity work generally. But when I pay my taxes I know that the distribution of the funds is nominally under some democratic and legal governance that is not attached to someone's personal belief system. (Though that is also degrading over time)
(FWIW I've personally donated funds to charities that have church / religious affiliations despite being an atheist. But I'm extremely picky about it)
I would be willing to bet that the majority of local (single location, <400 members) churches are like this. Free meals for the community, donating money / labor / resources to homeless shelters, partnering with food banks and soup kitchens, etc are all very common. You just don't hear about it.
Churches can be pillars of a community if done correctly.
Man, only in the South can that be the same event.
Local governments don’t always provide the community services of churches either.
(Fwiw I’m not a Christian nor do I care for religion)
While I do think the US should be spending more on essential infrastructure, it is entirely likely that the US could end up doing an exemplary job at that, but still spend less money on it than on the military.
It'd be nice to be able to earmark it to particular government functions, maybe even charities in the area, etc.
"[Your Town] has finest municipal art galleries in the state whilst streets are filled with pot-holes"
Allowing people to allocate money to government functions is generally a bad idea except if very tightly limited. Things which are 'nice' will get over-funded, and things which people find unpleasant* will not getting the funding needed. I think the problem would be ten times worse if it is people who don't actual live in an area get to choose how funds are allocated.
Septic systems are a great example of this on a home scale. So many people treat them as a mysterious vortex in the ground where all sewage magically vanishes. They don’t bother to pump the tank every few years because it costs a couple hundred dollars. Then they’re shocked when their leech field is completely failed and needs to be replaced to the tune of $30k.
Maybe they have too many roads?
Rural areas do not "have no voice" - they have exactly the representative power of their population, the same as urban centers. I'm not sure what makes people in or from rural areas thinks that once people live close together their voice should count for less. How is it "right" or "fair" to move to an urban center, take advantage of urban amenities and services, take advantage of that higher salary, and siphon some of that tax money away to rural areas because of nostalgia?
2 wolves and sheep deciding on what's for dinner huh?
Have you considered that the key problem here is the lack of direct control that people have over their own lives, causing these sort of situations where you have groups of people who permanently have zero effective agency over their futures?
I agree, giving people more voting powers just because they live in a certain place isn't the right way to fix this. But the fact that there is a problem is undeniable, and the fact that this inequality in voting helps ameliorate this problem is true as well.
The right answer here is to remove power from the state and elected officials, and return it to where it belongs, those being asked to pay for it either directly, or by being affected by it.
There is nothing as democratic as everyone choosing for themselves.
In the same way we should not have a vote to decide what's for dinner, and the winner means we all eat the same thing, we should not have votes on local and personal matters.
Democracy isn't voting, it's agency over what rules you.
> 2 wolves and sheep deciding on what's for dinner huh?
Tired analogy that doesn't actually make any point.
> groups of people who permanently have zero effective agency over their futures
This applies to approximately 0% of people in the US. Yes there is a small proportion of people who are so poor they can never move away from where they're born. Most of these people happen to live in urban areas, not rural.
> the fact that there is a problem is undeniable
For it being undeniable you haven't actually said what the problem is - only a strawman that rural Americans have no agency over their futures which is utter nonsense.
> return [power] to where it belongs, those being asked to pay for it either directly, or by being affected by it
If democracy is 2 wolves and a sheep deciding what's for dinner wouldn't you want more power in the state and elected officials, so they could protect the sheep?
The problem is everybody acts like they're the sheep being taken advantage of by big bad government when it's almost never actually the case.
it would be better to give more independence to the sheep so that deciding what's for dinner doesn't need a majority vote of all of them. if we ignore the obvious outcome that the wolves want to eat the sheep, but simply look at the fact that wolves want meat and sheep want grass, it simply doesn't make sense that the majority here gets to dictate what everyone should eat, instead each group should be able to make their own choice.
that means localizing decisions where that makes sense. and not allowing the majority to control resources that a minority depends on. among other things.
It does, but it seems you've missed.
Let me make it clear as day.
If there's a country with 3 people on it, where 2 of those people want to oppress the third, there is nothing that the third can do to prevent that oppression.
That is a perfectly legitimate outcome of a voting system, and one that occurs often.
>This applies to approximately 0% of people in the US. Yes there is a small proportion of people who are so poor they can never move away from where they're born. Most of these people happen to live in urban areas, not rural.
On the contrary.
If you've ever been affected by a law or regulation you're against, you've directly suffered from this in regards to that topic.
Indeed, the whole idea of "red states" and "blue states" that is common in US politics kind of shows it happening at a large scale.
For example I've recently seen news about parts of eastern Oregon wanting to secede and join Idaho, and the primary reason for that is that you have a minority (rural eastern Oregonians) who are permanently disenfranchised with effectively zero agency over the laws and regulations that rule over them, as a result of them being a minority in Oregon.
This is the problem.
>If democracy is 2 wolves and a sheep deciding what's for dinner wouldn't you want more power in the state and elected officials, so they could protect the sheep?
On the contrary, for it is that power that is being used to oppress.
Rural and low population _states_ have a fair amount of power due to having a fixed number of senators per state, but rural areas in an otherwise non-rural state may find themselves outvoted and thus mostly irrelevant.
The opposite situation, city slickers outvoted by country bumpkins, is of course possible in rural states.
But in current conditions, votes in rural Western Canadian ridings are basically worthless. They're ultra-safe Conservative seats, so they can be and are ignored.
But it wasn't very long ago that they were highly competitive ridings split between two right wing parties. Because Canada doesn't quite have the same 2 party system as the US does, the situation isn't as static.
Tokyo and the regions could have resolved their differences through the democratic process, in which the regions outvote Tokyo and could have altered Japan’s national tax and economic policies to their advantage. Tokyo obviously doesn’t want this, and instead agreed to an opt-in system which allays some of the regions’ concerns.
Doing some back of the napkin math wrt representatives in the House of Commons and senators, in Canada, the situation probably wouldn't be much different for Vancouver, Montreal and Toronto. In a lot of ways, this where the US is. NY (the city) foots the bill for not only most of NY (the state), but also its tax money funds projects and services in other states as well.
Living in a US state's biggest city myself, it is a drag to see the rest of the state constantly block legislation that will help us grow, while on the flip side they are gladly taking our taxes, as we pay by far the most into the state's coffers. What I mean to say is, due to the way we pay local, state/province and federal taxes, the big cities are already a net positive in terms of tax revenue for the rest of the province/country.
The Federal government spends disproportionately outside of cities.
posted 2018, 249 comments: https://news.ycombinator.com/item?id=18256660
posted 2022, 105 comments: https://news.ycombinator.com/item?id=31152365
Not here to complain about a repost, just mentioning in case someone is looking to dive further and see what people said before.
Japan's Hometown Tax (2018) - https://news.ycombinator.com/item?id=31152365 - April 2022 (105 comments)
Japan's Hometown Tax - https://news.ycombinator.com/item?id=18256660 - Oct 2018 (249 comments)
(And yes, agreed - such links are solely for those with extended curiosity. Reposts are fine on HN after a year or so - https://news.ycombinator.com/newsfaq.html).
> And there, that’s Japan’s most novel redistribution program in a nutshell.
How is this "redistribution"?
I think all tax payers wherever should get some form of choice in where their tax money goes even if it's only a small proportion of the total.
Reallocation and redistribution are synonymous here, one is just used in more headlines (probably because more people use "distribute" more regularly than "allocate"). Nothing different should be inferred by either word choice IMO.
Reallocate says that you are changing where the money is going
Redistribute says that you are collecting money then parceling it out.
1. Schools receiving state tax dollars must adhere to percentage-based breakdowns of general tuition use. Basically, only x% of general tuition can be spent on administration costs, sports facilities, etc.
2. Percentage of tuition covered by tax dollars is set by local demand for that degree path and adjusted periodically.
If you live in Tokyo, your residence tax goes to Tokyo by default. You don't need to do anything, you don't need to specifically gift it to Tokyo.
To clarify, California tax agency will sometimes aggressively audit residents who claim to have moved elsewhere, when evidence indicates they have not actually abandoned their California domicile.
And I meant exactly what I said: there's only one third party in this conversation, California, and 2020 is "a few years ago".
You also omitted that this would be a wealth tax, not an income tax. Big difference. Income is determined on an annual basis and is usually sourced to where it is earned. Wealth is an accumulation over years, including unrealized or unrecognized (for tax purposes) income from various sources (e.g. different states).
Finally, this was a failed bill submitted by a few legislators, which would have required 2/3rds vote in both chambers. It never even made it out of the chamber of origin and so never came up for a full vote. So, "California" in fact did not "try" to impose this tax, since it was never even close to passing under California's rules, let alone being signed into law. And as several commentators elsewhere have observed, it would probably face significant challenges in court even if there was some alternate universe where it was CA law.
See also:
https://www.natlawreview.com/article/why-wsj-attacking-dead-...
The equivalent law in the UK would mean that if you just moved 60 miles from the UK to France you'd have to pay tax twice. Much more limiting.
Edit: two people have now told me that you get an IRS tax credit for foreign tax payments. I stand corrected - never knew that!
To my understanding, that's not how the US taxes work. You have to file a tax return with the US, but you get a credit for the taxes you've paid to other countries [0] so you actually end up paying whichever tax is higher.
[0] https://www.irs.gov/individuals/international-taxpayers/fore...
Part of the reason is there are very rich, politically active people who prefer the status quo. Such as the prime minister's wife, the owner of the Daily Mail, and suchlike.
>expatriates : An expatriate, or expat, is an individual living and/or working in a country other than their country of citizenship, often temporarily and for work reasons.
There are other countries as well, Americans just like to complain about it.
If you are not an American who lives abroad then, with respect, you don't know what you're talking about. May you never have the experience of a bank in your country of residence refusing to do business with you because they fear the reporting burden incurred by serving clients of your nationality. Perhaps the Canadian Revenue Agency wishes it could compel banks in foreign lands to report the financial activities of the citizens under its purview, but the IRS actually can, and does.
Having been to Japan now and having seen the amount of gift wrapping and boxes and packaging of little food items and treats, I wonder if this simple social rule actually drives quite a notable amount of consumer spending and economic activity in the country!
Americans have a gift reciprocation culture as well, particularly around birthdays and Christmas.
So people who've been homeschooled can opt out of that tax right? I mean: that's only logical.
I'll admit that this "hometown tax" system has a certain amount of silliness, but wealth redistribution schemes often do. We're torn between "the weak should perish" and "some help wouldn't be so bad" and twist ourselves into pretzels trying to reconcile between these ideas. Plans like this hometown tax are the result of that, and some of our wealth redistribution efforts in the US probably seem no less strange to outsiders.
It's hard to look at America and not draw the conclusion that federalism is a major mistake. So many problems downstream from fickle localities.
The "fickle localities" that share sovereignty with the federal government is a tradeoff between efficiency and resilience. Totalitarian places can ignore localities and push huge national projects. China now has the world's longest high-speed rail system; but the same country lost 40-80 million people not even a century ago due to huge national projects that didn't pan out so well, under Mao.
The US has one of the highest median incomes in the world; among the top 5, by any measure. It's hard to understand why anyone would look at the system of governance in the US and call it a major mistake.
There's a lot of weird stuff about the American system of governance. For example, in most countries the legality of abortion would be decided by elected legislators, rather than judges who are appointed for life. And in the US the government can just 'shut down' for some reason, and this is just a normal sorta thing? Pretty weird. And filing tax returns isn't just for people in complex financial situations, practically everyone does it, and they have to pay third party companies? That's pretty unusual.
It's far from obvious how these eccentric features could have influenced the founding of the likes of microsoft, intel, apple, facebook, google etc.
> in most countries the legality of abortion would be decided by elected legislators, rather than judges who are appointed for life
State legislatures are doing that job. That there is no federal law on the issue of abortion reflects both that there is no unanimous consensus on the part of the people, as well as some level of craven political maneuvering (since abortion has been a big draw of people to the polls). At various times in the past 10 years alone, there were periods where both the Republican Party and the Democratic Party had control over the presidency and both chambers of Congress. A federal law of some kind, in either direction, could have been passed at those times (though perhaps subject to constitutional challenge).
High-level judges appointed for "life" (and by this I include age-capped retirement) are not unusual in developed countries. The German Bundesgerichtshof, the Australian High Court, and the Supreme Court of Canada all have this. The point, of course, is to promote the independence of the judiciary from the other parts of government.
> in the US the government can just 'shut down' for some reason, and this is just a normal sorta thing
The power of the purse is in the hands of the legislature. When an annual budget fails to be passed, the executive no longer has authority to spend money, and kind of goes on hibernation until a budget is passed.
Parliamentary systems have a different kind of shutdown, where if no ruling majority forms, then a caretaker government comes in with no mandate from the people to substantially change any policy. This can last much longer than any US government shutdown; Belgium had no leadership in parliament from 2007 to 2011, for example.
> It's far from obvious how these eccentric features could have influenced the founding of the likes of microsoft, intel, apple, facebook, google etc.
Well, sure. You pointed out various frivolous (to economic behavior, at any rate) factors that have nothing to do with entrepreneurship or laissez-faire capitalism. It would be far from obvious to anyone how abortion policy relates to the founding of companies.
The difference is that the US is a democracy and China is a communist dictatorship. Tens of millions didn't die in china because a huge national projects; they died because they were ruled by a totalitarian dictator who had no regard whatsoever for the value of human life, and who was empowered purely by the threat (or the guarantee) of violence and not by the consent of the governed. There is an ocean of difference between western democracies and communist dictatorships, and it's not how we allocate authority to public works projects
The US is not rich because it has such an amazing system of government, but because it was a sparsely-inhabited continent rich in natural resources when it was settled, just prior to the industrial revolution. Australia is rich for similar reasons, despite having a different system of government. Saudi Arabia is wealthy despite being one of the most despotic countries in the world, because it gained independence right around the time that crude oil took over from coal as the industrial fuel of choice, and SA has crude oil in vast abundance.
It's not that systems of government don't matter, of course some work far better than others. But geography matters a lot, and political theorists and philosophers habitually underestimate it.
No amount of money beyond being a millionaire gives you nice infrastructure where there was none. I’m not going to say all of the US is messed up but there are many people who choose to move away from the US and to other countries, taking massive pay cuts, because the surrounding conditions are nicer.
EDIT: also, Europe built a massive rail network without the cultural revolution.
It's the equality vs equity discussion based in geography
There are certain sorts of facilities which will almost never be available alongside small towns. It's not just "expensive" to maintain something like a Level 1 trauma center - if it were lightly utilized it would be economically unviable. It is something that will not exist away from a city.
That's an extreme example but even more mundane medical facilities end up being very expensive when you push out into rural areas. That those areas tend to be economically depressed, at least in the US, makes the problem that much more serious.
Why not? I think it's a natural conclusion of that fact.
Should every small town have a Tier 1 Hospital? A world-class university? A national sports team & stadium? An international airport? A symphony orchestra?
Don't get me wrong, I grew up in a rural area and have a fondness for it, but I do expect that rural areas and small towns should reasonably have less facilities than major cities.
This almost describes Alabama.
That's why the hometown tax exists. Small towns use their residence tax money to raise children then none goes back in when the young adult moves to Tokyo and pays residence tax there instead of in their hometown.
Singapore is just a city. Hong Kong for a long time too. The Netherlands is functionally a very large low-density city with some high-density parts. And in some countries, like Saudi Arabia and the UAE, the small towns are economically non-existent compared to the cities.
I don't know how a large country functions, but for the Netherlands there is a clear need to invest more in the rest of the country.
I just moved to the Netherlands (in the Randstad) and it's arguably better for the country that I moved to a place that already is dense and efficient to provide services to. Though it would be nice if it were above sea level.
One thing I will say though is that the area outside of it - pick any direction - is idyllic and doesn't seem to be struggling economically. Loads of local businesses, loads of people just going about their day, buying houses, having kids, etc. It's idyllic and I don't really understand why all the activity seems to be in the Randstad.
I mean I do get it, it's a chicken / egg problem; talent travels to the cities because that's where the best jobs are, the best jobs go to the cities because that's where talent is.
But I would like the government to incentivize more "work where you live" schemes; smaller sattelite offices for larger employers, remote work (obviously), extra income and subsidies if you work remotely (because of reduced office costs and to discourage commuting, since our roads and railways are all full up).
If anything it's a good thing - it means investment in Amsterdam benefits far more people than just those in Amsterdam.
Which of their neighbors do you think Japan is safe to rely on to feed their population?
edit: Note that China just the other day extended their 9-dash line to a 10-dash line
Ir's not that different. If you concentrate economic wealth in cites, the periphery starts to suffer economically because it can't exploit local resources effectively, and the population starts selecting for city activity. Over generations, that leaves you vulnerable agriculturally and militarily. If you experience a natural or military disaster that deals a massive blow to one of you key cities, the whole country can collapse.
edit: Note that China just the other day extended their 9-dash line to a 10-dash line
In small cities you among other things have more agriculture and different forms of industry are also commonly pushed out of big cities.
The problem is jobs. People want to move where the jobs are. Now that farming isn't a big job creator and many factories have moved away then it's all about commerce. That requires a large concentration of people. Cities will often not have enough to offer to make a company move to their city instead of some other city. Especially nowadays when people get really upset over a city offering a good deal to some business (eg Amazon and New York a few years ago).
Though the political capital was moved to the South, economically the effective capital of the US remained (and remains) NYC.
As states, both California & Texas have greater share of GDP than NY.
So US GDP is much less concentrated than in some other countries.
Did not mean to suggest otherwise, but it is worth explicitly noting.
Hopefully remote work will help push back against this force.
I have lived in Tokyo and now I live in a very "regional" area of Japan and have two kids. While the school_s are actually better in Tokyo, I'm still far happier raising my kids here where there are abundant parks, beaches and nature, and would never want to move to Tokyo. I would be really sad if the rest of the country disappeared and everyone had to live in the concrete jungle.
But I work remotely which is the only reason I can live here. The wages for my job are literally 10x in Tokyo than what they are here. That's why people move there. And that's why the schools are better in Tokyo - salaries for daycare workers and teachers here are too low so everyone leaves.
At the same time as the salaries are higher in Tokyo - the cost of raising a family there is also far higher. It's very cheap to be solo or a working couple living in Tokyo. The most affordable large city in the world. Far cheaper than SF. But if you have more than 2 kids (beyond replacement rate), now you need a big car, a big condo, etc etc and it's completely unaffordable. Whereas here in the "inaka" I know people with 3-4 kids on a low salary that are doing "ok".
Being able to even out the salaries in the country with remote work or even satellite offices using remote work technology would help lots.
Only in the US would cities like Beverly hills-CA, Brookline-MA, Piedmont-CA exist.
If you want the city to accommodate your suburban commute, (parking requirements, wider roads) and your safety (the homeless are bussed to the downtown core), then you need to pay taxes into the city. If you avail of cheap labor from the city's poor, then you need to be paying taxes into the city.
I supposed places like Neilly-sur-Seine outside of Paris don't exist? I fail to see how rich, lower-density suburbs that well-to-do people prefer to live in while working in downtown centers is a uniquely American trait.
https://www.google.com/maps/@48.8863259,2.2692631,3a,75y,38....
This does not look like low density suburb to me. The town only gets a commuter rail, and driving into Paris is a total nightmare. Suburbs are no the issue. Destroying cities to accommodate suburbs is.
The suburbs I mention are walking distance to the city's downtown, take advantage of positives of dense urban development near them, while doing everything in their power from letting density touch their own neighborhood. It is selfishness at its worst.
Paris has a population of 2 million, is a neat circle and clearly deprioritizes the needs of anyone outside the peripheral boulevard. You are making my point for me.
Historically, suburbs were low density because an outer donut has more area than an inner circle. In the absence of land development regulation, density reflects the demand per sq/ft. If Americans were so sure of low density suburbs being a natural outcome, then they wouldn't wield every dirty weapon to ban land development in the aforementioned suburbs.
In most American cities, the city does not control its own road or transportation budgets. This means that suburbs get to affect the lawmaking in the city, but cities do not get to do vice versa. I am not even going to address brain-dead laws like Prop 13 or rent-control that further destroy a city's ability to govern itself.
> The suburbs I mention are walking distance to the city's downtown, take advantage of positives of dense urban development near them, while doing everything in their power from letting density touch their own neighborhood.
You have an interesting concept of "walking distance." Google Maps shows a 3 hour and 27 minute walk from Beverly Hills to DTLA. https://www.google.com/maps/dir/Beverly+Hills,+CA/Downtown+L...
Brookline, MA, has a population density of nearly 9,000 people per square mile, so not exactly low density.
https://www.france24.com/en/20101220-french-cities-rather-pa...
Ever been to Reading just outside of London? Or Richmond in Vancouver? Or Como outside of Milan? Or Icheon outside of Seoul?
All 3 of my examples are within 10 minutes walking/driving from the downtown core of the city. Yet, they have carved out a completely isolated township for themselves, so as to avoid taxation from the parent city, while benefiting from every aspects of being geographically inside the parent city. It stops a city from expanding organically, leading to oddly tiny cities (SF) or city boundaries that look like a kids scribbles (LA, Boston).
If you city isn't propagating radially from the downtown core then there better be a good explanation for it.
Generally, families in rural areas have more children than families in big cities. There should be some kind of monetary compensation (money transfer from cities to rural areas) for the rural areas than produce more people, who then move to cities and contribute to their economy. This Japanese system sounds good.
Even then, being profitable is not the same as being useful to society.
Once we have a Job Guarantee, not only does that mean interest base rates remain at zero permanently (ensuring permanently low mortgages), but it also means you can live where you want in the country.
Business then has to go where the people are if it wants any labour - which of course it largely can in a majority service based economy.
Stars shine not because of gravity, but because of the outward pressure that stops them collapsing in on themselves.
Countries need to adopt similar policies if they wish to shine and not collapse.
Is your plan here to consolidate all capital in the hands of a few corporations? Because most businesses cannot just move somewhere else because their owners cannot just move somewhere else.
You can't give eveveryone a Job Guarantee™, because the only natural job guarantee is that your efforts benefit someone else. If your work is not productive someone else pays the cost, you wind up in a zero sum situation.
Also, I fail to see how such a system would mean interest rates remain at zero permanently, or how it ensures permanently low mortgages for interest rates to remain at zero permanently. Perhaps you can elaborate on the mechanism you envision when you talk about this.
You can't outlegalese network effects, all you can do is shift cost around. This is why these sorts of schemes always have unforseen negative consequences, because people naively think they've found a silver bullet. You probably have not.
What's a job guarantee? Anyone who wants a job can get one.