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The problem with these solutions is that production moves where it's cheaper. If you tax my robots, I'll just pack up and move them to another country where they are not taxed, or they are taxed less.


This argument applies to all kinds of taxes, right? If you tax labor, I'll just move my factory somewhere that labor isn't taxed. If you tax my income, I'll move myself to a lower-tax place. If you tax my land, I'll just buy land somewhere else. And so on.

Yet somehow most countries are able to tax labor, income, land, and so on, without losing their entire populations.

Not to say that people won't leave because of taxes. Just that there are also reasons that make people stay.


The issue has a lot to do with the finances of scale. Mom and pops aren't going anywhere, and neither are you, but Apple will go to Ireland, and wealthy individuals will bank in tax havens. And hence, the wealth gap widens. Most -- the "99%" -- stay and pay taxes. The 1% don't, but they look like they're still here. They just have one foot - the tax paying foot -- in Ireland.


An accountant recently confessed to me that many wealthy Californians do the same using Nevada. Just declare an NV home as your primary residence and make sure to document your time in NV (photos, flights, ATM receipts). CA income tax is 13.3% for the wealthy. NV is 0%.


If you are making let's say 10 mln a year, that means by lying that NV is your primary residence, you did not pay more than 1 mln in taxes. For getting back that kind of money, Criminal Investigation Bureau of Franchise Tax Board can afford keeping dedicated agent who will follow you and see how often do you actually go to NV and after couple weeks of surveillance when he sees that you do not go there much, he can get court order and:

- Look at your cell phone location information for last several months.

- Use Police's license plate trackers to track your car (Probably they do not even need court order for this one).

- They can get your car's location information (I assume high income people have one of modern expensive cars and most of them have tracker in case it is stolen).

- They can talk to your made(s) (I assume you have one, since you make 10+ mln) and pressure them to tell the true story.

Sounds really dangerous to lie about your location now days when it is so easy to check it, without even leaving the room.


You, in turn, donate $50k a year to politicians who work to cut the Franchise Tax Board's investigative budget.


Some things are easier than others. Technology is easy to move around, people aren't.


> Yet somehow most countries are able to tax labor, income, land, and so on, without losing their entire populations.

That's because most of the population aren't free to give everything up because a government gradually makes their life slightly worse.

Just because the frog doesn't skip out of the saucepan, it doesn't magically mean that it's perfectly acceptable to keep turning up the gas.


And then I'll introduce tariffs on goods produced using your robots.

These are, fundamentally, political-economic questions. Not merely one or the other.


That's how you start a trade war and kill trade aka the Trump solution.


To be fair Thomas Jefferson raised tariffs significantly. Most manufactured products simply stopped existing for consumers. All of that demand and no supply spurred the creation of a domestic manufacturing industry in a country that had previously only been useful for agriculture and raw materials.


Yes, but the US basically had an entire continent that was almost free for the taking, given the relatively light resistance that Native Americans were able to put up. Of course this land had to be farmed/mined/etc. to be productive, but it's far far easier to take economic risks when you have effectively unlimited quantities of a popular asset (land) at your disposal. I'd be very wary of generalizing from that situation to economic planning in general.


All I'm saying is that tariffs are not universally good or bad. Japan has ridiculous duties on rice because the farm lobby is super strong and the inevitable result of lowering those tariffs is a loss of livelihood for many people as well as the loss of traditionally grown and sourced rice. Is that bad for the economy and for consumers? Duh. But if the rest of the economy can support the inflated price of rice and the Japanese people prefer staying true to their roots, then that's their business.


Thomas Jefferson lived in a very different time. This is a hyper-connected world with a very complex web of trade and inter-dependencies. Simply putting up trade barriers is a sureshot way of isolating yourself from global trade, when has that ever worked out for anyone?


The choice between NK/Iranian levels of isolation and complete free trade is a false choice. Plenty of countries have high tariffs for certain types of goods and do just fine. Even today.

More-over, I hardly think a tariff on the output of robotic labor applied only to expats who left the country for tax reasons is going to cause a trade war...


A collapse of consumer demand will also kill trade.


That's a much better point. Consumer demand is paramount.


> I'll introduce tariffs on goods produced using your robots.

My robot submarines will run your coast guard surveillance and deliver goods tariff free.


What if we don't need your robots?

I mean, the Fed can conjure trillions of dollars of investment capital out of thin air, I think 350 million people have a fair chance of choosing to operate a magic building that makes their lives better.

Which is ultimately what we are talking about. Should we operate highly automated factories and how should we divvy up the benefits from them?


Seriously, we could have robots taking care of us. Free food delivery and a basic income for just being a citizen. Unfortunately this undermines much of what drives innovation and hence the economy as we know it... so though the math seems to work:

automated robots = free labor = us not having to do it + receive their products

... it just isn't that straight forward. Currently it's heading towards:

automated robots = free labor for business owners = us not having those jobs + them still getting what we would have produced


When everyone has lots of free time no one will innovate new forms of entertainment. /s


Correct. It's also the problem with taxes. Corporations move to where taxes are cheaper. But this doesn't mean there are no solutions.

Also, what cannot be ignored is the true drop in production costs because savings do get passed on to the consumer. This makes the politics difficult. If kittens died change would be much easier.


> Correct. It's also the problem with taxes. Corporations move to where taxes are cheaper.

Not just corporations. All tax payers try to pay the least they can.

There are professional accountants who make a living by filing personal tax returns, and people pay them to advise them on tax deductions and investment schemes that lowers their tax bill.


only problem is that is not what happens..

sure robots and factories move to China with no taxes at first..but than Chinese gov figures out to pay for other infrastructure improvements to have things like the USA they have to tax something and end up taxing robots anyway..in fact its already happening


And manufactures are already moving out of China to places like Indonesia and Vietnam.


And that’s why tariffs are a thing, and why the corporations are trying to push for free-trade-treaties just before the automation is happening.


What if I'll tax the stuff you robots make? Vat could be 80% or more if money was pumped back into economy in form of basic income.


I'm sure I read there is an upper bound to VAT, after which increases in fraud loose more than the tax increase.


Not sure. Most harmful VAT fraud is caused by specific schemes relying on faking costs. Those don't depend on rates.

Other way to avoid paying VAT would be to hide the sale altogether which might be hard for company that makes and sells tons of stuff made by robots.


Doesn't this just drive trading blocks of countries getting together to agree on common standards, like the EU?


Exactly




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