Well, my father who heard about the ChatGPT hype believed it is an app you download from the Play Store and proceeded to download a couple of knockoffs with paid subscription features.
Lower income tax.
Lower corporate tax.
Eliminate onerous labour laws.
Eliminate unnecessary regulation.
Improve English education.
Raise public sector tech salaries.
Stronger accounting and capital market regulations.
Stronger contract laws.
Please don't take HN threads on generic ideological tangents. They're tedious, repetitive, and invariably nasty. Nothing new ever comes of them, and therefore nothing interesting.
Lower income tax allows high earning engineers to found their own companies and become angel investors. This builds the startup ecosystem and makes it more self sustaining; new startups receive angel funding from prior employees that are moderately wealthy, and when they get big they fund the next generation. A social safety net is not a substitute for this because you can’t invest government welfare into your company.
As for regulation, [1] suggests EU employment regulations for performance can require documented performance improvement plans before firing an employee is permitted. This basically makes early stage startups untenable, as you can’t easily remove employees that are incompatible with the company’s goal. For example, if you suddenly pivot you can’t just let go of an entire product line’s employees in a week. A recent example of this happening that made it to the HN front page is Gumtree laying off most of their employees a few years back. The trade off is obviously employment stability for employees, but in a hot labor market like software engineering there is not much downside to decreased stability.
Ultimately startups provide competition for big tech and drive up salaries, since if big tech doesn’t pay high enough people will flock to startups that will eat the big tech company’s lunch. That ecosystem doesn’t exist in Europe at least partially because of high income taxes and burdensome labor regulations.
I said it was partially responsible; it is by no means even close to the sole factor by which startup ecosystems are formed. Arkansas lacks in education, research, and a number of other metrics that make it undesirable to develop in. Income taxes are only one part of the tax equation as well, since employers pay a larger chunk of overall taxes in France and other EU countries [1] compared to the US. Again, an employer (or startup) being forced to pay very high taxes on worker income gives a lot of incentive to reduce worker income and makes it more difficult for cash strapped startups to find personnel. Factoring in the employer side makes the tax difference more in the range of 10-20%, not 3%. That difference gets passed on to the worker, either in cash for large companies or in stock options for startups, since the software job market is highly competitive.
Healthcare costs for FAANG and other big tech employees (such as those that would be making $500k) are on the order of $2000/year or less. The company I currently work for covers all health insurance costs for me and I can choose to enroll dependents at a small cost per month. Again, adding high healthcare costs here for an engineer making $500k is unrealistic.
Hate to break it to you but... $40k a year in extra income is a lot of money. Taking your numbers, 147k is 37% higher than 107k. That money has higher order effects more than just the 40k the employee gets, since all else equal higher salaries attract better talent and winner take all market dynamics mean only the best companies make a lot of money. You might note that Silicon Valley salaries are much higher now than in the 1990s and early 2000s, and this kind of snowball effect is a partial contributor to that. Also, 37% is a LOT and even if you add healthcare and miscellaneous costs that gap is still massive. I would consider anything more than 10% a big difference.
Your own numbers show taxes are absolutely one cause of lower salaries in the U.K., although certainly I don’t claim they’re the only cause.
This may quite likely have the opposite effect. Corporate tax is auf on earnings. If corporate tax is high, the push to generate higher earnings is decreased - a large chunk would end up in the tax authorities pockets. Paying your employees more this hurts less since part of the delta is paid from taxes.
Please don't take HN threads further into ideological or nationalistic flamewar. Comments like this are just what we don't want here, and we've had to ask you this before.
Those are not examples of true Veblen goods but rather goods which use price as a signal of quality. True Veblen goods are things like staple foods for the very poor where the increase in price eats so much of their income that they can only buy more staple foods.
>...A higher price may make a product desirable as a status symbol in the practices of conspicuous consumption and conspicuous leisure. A product may be a Veblen good because it is a positional good, something few others can own.
>...The classic example given by Marshall is of inferior quality staple foods, whose demand is driven by poverty that makes their purchasers unable to afford superior foodstuffs. As the price of the cheap staple rises, they can no longer afford to supplement their diet with better foods, and must consume more of the staple food.
I agree with most of your ideas except energy ownership. However, as a Singaporean I have to say that Singapore has HSAs. They are called MediSave accounts and are separate from CPF although both earn interest. CPF is the retirement plan.
My understanding was CPF was the overarching program, Medisave was the HSA, and CPF MS was the IRA. Medisave is part of the overall CPF program.
What part of energy ownership don't you disagree with? I still wasn't advocating against private industry doing the extraction or creation. Just that if you pull something from underground, it gets taxed and benefits everybody, not just the person who bought it from the person who stole it 175 years ago.
I think we are talking at cross-purposes, but I read your comment as suggesting a single account. No one calls our IRA the CPF MS, CPF always refers to the IRA and Medisave is totally separate even if it is partly administered by the CPF board.
What is the purpose of that tax? In public finance, we don't want to unnecessarily distort incentives by picking winners and losers. Taxing natural resource extraction for no good reason chases away companies in those industries and forces them to pursue other businesses, possibly leaving only the most profitable monopolies to survive. If we want to raise revenue, why not just raise VAT, corporate tax, income tax, or property tax more generally.
It's not taxing the company doing the extraction, its taxing the company that owns the mineral rights (the land.) Those may likely be the same thing, but the extraction and refinement itself is still profitable.
It would be akin to the government pulling eminent domain, and saying "the oil under the country belongs to the people, not who owns the deed."
This is basically what Alaska did. They said "if you plunder our natural resources, the profit gets shared with the people whos natural resources you are plundering."
Elimination of the price mechanism eliminates a key way to sort out who truly needs healthcare (or whatever service). Consider a safe elective knee surgery. If you knew it was paid for by the government, you would just sign yourself up for the surgery for even the slightest ache. If there was a copay, you might reconsider unless your pain was actually painful enough to warrant it. Ask any Brit about NHS waiting times and they would understand.
Is access to healthcare important? Yes, but universal healthcare eliminates market forces which makes things efficient. A better way would be a mixture of health saving accounts (and redistributive transfers to such accounts) and subsidizing hospitals (to reflect the fact that healthcare is typically underconsumed).
Further, the government lacks the necessary profit incentive to keep costs low or maintain high standards. Bureaucrats on fixed salaries have no incentive to try harder.
I can agree on the points you made about the system not having any need to be efficient, a government ran system is just not able to be lean - but as far as people just getting whatever they can for the heck of it, that's probably not the case.
Just from personal experience, I don't have copays or much in the way of direct monetary costs (I'm not American) and it's not like I'm out there grabbing free drugs and surgeries. There's a cost other than money to everything, time and effort and rehabilitation and fear of the unknown and so on. As another example my retired parents have messed up knees and hips but they don't feel it warrants the hassle/risk even though it'd not cost them anything to have surgeries, there's more to it than just financial consideration.
Health savings accounts doesn't seem that great though - I don't know if I'll ever have health issues so if I'm socking away $x00/month I'm removing that from the economy betting against my health. Assuming a somewhat capable health care system I'd rather pay that amount to the government in taxes so they can leverage it now for someone else and if my time comes, then I don't have to worry about dollars and cents and what I can afford.
Also if the government had the money from everyone now in the form of taxes instead of individuals socking it away, it'd be more able to purchase equipment and hire doctors well in advance and the local hospital may have better capacity to cater to my needs.
HSAs are just like bank accounts. It reflects a debt owed to you by the govt/bank. The govt/bank doesn’t actually store all the money it owes on hand, it lends it out, makes investments or spends it. That’s why bank panics and bank runs can occur when too many people withdraw their money at once.
> Health savings accounts doesn't seem that great though - I don't know if I'll ever have health issues so if I'm socking away $x00/month I'm removing that from the economy betting against my health.
A pretty safe bet, seeing as most people's health gets quite a bit worse over time.
> Elimination of the price mechanism eliminates a key way to sort out who truly needs healthcare (or whatever service). Consider a safe elective knee surgery. If you knew it was paid for by the government, you would just sign yourself up for the surgery for even the slightest ache. If there was a copay, you might reconsider unless your pain was actually painful enough to warrant it.
Huh? Surgeries don't work like that, they all have significant risks of giving you worse problems than you already have. And even if successful, they're not going to leave you "good as new" or anything like that.
Also, the price mechanism doesn't actually do anything to sort out who "truly needs healthcare," all it does it make it so the wealthy can get whatever they want and the poor can't even get what they need. The actual mechanism for preventing unnecessarily and wasteful medical care is the professional ethics of doctors and the caution of patients.
The problem with price as a mechanism to determine who truly needs a resource is that it excludes people who don't have money. For example, children who would greatly benefit from early therapeutic and/or psychiatric care.
That's where the health savings accounts (HSA) and subsidization comes in. We want people to be able to afford healthcare but not abuse it. So what should we do?
First, require each person to set aside part of their income to a HSA.
Second, top up the values of those HSA's through government transfers for the poor and lower income.
Third, mandate that HSA's can only be used for real healthcare (and not alternative medicine). This way, individuals can afford healthcare but will still take responsibility to not deplete their accounts unnecessarily.
Fourth, (and in response to the NhanN's question) subsidize healthcare providers because healthcare tends to be underconsumed. Why is healthcare underconsumed? When we think about the importance of our own health, we only think of ourselves or our families. But we are valuable to our employer, to our friends. To correct for these positive externalities, some subsidization is essential to bring down those costs.
You are right in that my post didn't address the issues of childcare, let alone genetic diseases, long term conditions etc. where the price mechanism doesn't really make sense or fails. Any healthcare policy will have nuances that I cannot capture in a comment. But for the majority of healthcare consumption, we should really be trying to be as efficient as we can be precisely because of how costly it can be. Throwing away the price mechanism just because it fails for the edge cases is not ideal.
If inflationary pressures get to high, the Fed will raise the Fed Funds rate, affecting the market interest rates, incentivizing saving, decreasing inflationary pressures.
The Fed is lending money to prevent a financial crisis, not simply giving it away. Look back at the 2008 crisis and see that the government actually profited significantly from issuing those debts in the long term.
Six of one, half a dozen of the other. The difference is that Fed injections benefit the wealthy, and a UBI benefits the poor most. This is not inflationary, since we are in a depression. As far as devaluing the dollar versus other currencies, everyone else is creating tons of money as well. I'd really welcome a dollar devaluation, actually, to help with our trade deficit.
Let us assume that your concerns about devaluation come true. Let us say that Poor Man has $10,000 and Rich Man has $10,000,000. Devaluation of dollar by 10% means poor man loses $1,000 and Rich man loses $1,000,000.
Poor man typically doesn't have $10,000, what they have is $10,000 and a $200,000 debt.
And not all inflation is created equal. With QE, the printed dollars never make it to Main street, they end up inflating asset prices, while the price of butter stays the same. Whether that's a good thing is an exercise for the reader.
