[charlesdm]

I do. It has to do with value, not with price. Anything with a high price, whether it's a good or a service, has a negotiable price tag. Not so much with tax.

Say I make $25k a year, and I pay $5k in tax. I'm probably getting that back in value (health insurance, roads, safety, etc).

Now say I make $100k a year. I'd probably be paying $30-45k a year in tax (depending on the country). This is getting to the point where you're no longer getting enough value for your $/€.

Third option, say you make $1M a year. On average, you now need to pay $400-500k a year to the treasury of your country in tax. No way you're getting that in value. Alternative: you structure things through a tax friendly jurisdiction, and at the end of the road you only have to pay $150k instead of $400k, legally.

Honestly, why would I pay $400k in tax if I can pay $150k? Tax aside, I'm obviously still spending money in the country where I live (-> creating income for businesses, increasing the taxable base of those businesses, who in turn will pay full corporate tax).

[rayiner]

> No way you're getting that in value

I disagree. If Mark Zuckerberg had started Facebook in Bangladesh, would he still be worth $35 billion? Almost certainly not. But-for his starting his company in a developed country with a stable government, deep technological infrastructure, educated employees, and wealthy consumers, he would not have that money. Whatever he pays in taxes is far less than what he got in value.

[goatforce5]

> No way you're getting that in value.

Infrastructure was in place before you were born that gave you the opportunities to succeed.

It's now time to pay that back(/forward?) so that others have similar chances to succeed.

[charlesdm]

It was, but it would be in place regardless of whether you succeeded or not. Maybe not historically, but today, whether I personally succeed or not doesn't matter to the budget/deficit. Those who carry the taxable base are the middle class; the employees who can't restructure their affairs.

Paying back / forward is great, but (imo) it has a limit. Unless you inherited your wealth, most people who are self made will have paid a significant amount of tax before they tax optimise their structures. So, if you’re a success, you will have paid back your “debt” to society (and then some).

There needs to be a limit somewhere. Some countries are more aggressive (i.e. the US) in collecting their tax dollars than others (i.e. the UK).

[kuschku]

"people who are self made".

There is no such thing.

A single child raised to finish college costs the taxpayer in Germany 300'000 Euro in subsidized nursery, free school, and free college.

Additionally, each person costs a lot for roads, public transit, etc.

And then you have to add in that for every person who gets to become a billionaire, you have hundredthousands who won’t become billionaires, but still cost you equally much. There’s no way to find out who is going to become a self-made millionaire, and who isn’t.

And society already tries to provide many programs only to those kids with high potential, to save money. Programs like this [1] are already exclusive.

If you want to give the generation of your kids the same chances at becoming self-made millionaires, you have to provide all of them with this high quality service.

Which means you have to accept nominal tax rates of 48%+.

    ----------------

[1] http://www.enrichment.lernnetz.de/content/information.php

[charlesdm]

> Which means you have to accept nominal tax rates of 48%+.

Except, you actually don’t. You are always free to move to a country with a lower (or a higher) tax rate, for whatever reason.

If someone wants to go live in Monaco, and not pay anything, that’s his/her right. There is never a debt, in the true sense of the word.

[kuschku]

Well, nice for quoting half of my sentence.

If you want that the next generation has the same opportunities, then you need those taxes.

Without them, you won’t be able to provide intelligent and engaged children (no matter their family’s wealth) with quality education.

[charlesdm]

Yes, absolutely. I totally agree we need taxes for the next generation. I just don't believe 48%+ taxes are ever paid by the truly wealthy, only the middle class.

Most wealthy people (people with net worths in the tens of millions and up) pay rates closer to zero, by using every trick in the book. Or well, their advisors do it for them. At most, they will pay the capital gains tax rate.

> Without them, you won’t be able to provide intelligent and engaged children (no matter their family’s wealth) with quality education.

Wealth does give you the freedom to send your children to the best schools in the world, regardless of the country you live in. But obviously, that's an extremely selfish view.

[ctlby]

> Which means you have to accept nominal tax rates of 48%+.

Nonsense. I won't speak for Germany, but our government spends about $500 billion annually on things that can plausibly be called public goods (I exclude defense). This is a mere 4% of total US personal income.

[kuschku]

Well, we spend lots of money on bullshit, too.

We spent 200 billion saving the greek economy.

We build the Berlin Airport BER, the S21 train station, and the Elbphilharmonie.

All projects that waste money.

But the public services we get are still worth the tax. I wouldn’t want to pay less tax and lose our libraries, or free university access, or quality education. I wouldn’t give up just for a bit more money the public transit, which cuts down my commute times, or the services financed by the government.

Yes, the government invests broadly to get money back – from companies like T-Mobile and DHL to VW, all of which end up paying dividends to the federal budget, because the government owns a lot of shares in them – but we still need taxes.

And I’m okay with that.

The life here isn’t perfect, but it’s okay. One can live with it, without ever worrying about stuff.

[elevensies]

How much opportunity comes from government spending versus private investment?

Money going to the U.S. Federal government goes to: 24% Social Security (i.e. the dole), 24% to the least efficient healthcare system in the world, 17% to the military to drop bombs on poor people.

If the majority, or even 25%, of government spending was creating economic growth and opportunity, I don't think anyone would have a problem with it. This is a country that was begun by a tax war, so if there is an obligation to the past, an aggressive response to tax policy is certainly part of it.

[harryh]

> Tax aside, I'm obviously still spending money in the country where I live

You should read some Kant. If no one pays, then the civilization that allowed you to succeed wouldn't exist in the first place.

[ohyes]

> Now say I make $100k a year. I'd probably be paying $30-45k a year in tax (depending on the country). This is getting to the point where you're no longer getting enough value for your $/€.

I Disagree.

The money you're getting paid in is a construct of the government that you're paying taxes to. You wouldn't even be able to collect $/€ for your goods and services without taxes. So you'd have to barter and stockpile basic commodities in order to barter for other things that you need. Can you imagine buying an iPhone with corn or oil? Or collecting ad click through revenue in gold? There would size-able inefficiencies just because of the need to hold 'stuff' rather than an imaginary thing.

Furthermore the marginal utility of a government backing the currency that you use is proportional to your income. Someone living in relative poverty probably could provide for their basic needs without currency (think peasants or yeoman farmers scraping out a living, basically self sufficient, or tradesmen exchanging services for necessary goods... vs. a hedge fund manager).

I can't imagine someone making the equivalent of 1/2 million a year having an easy way of storing and maintaining that value (particularly the excess beyond what they spend) without a currency (or even being able to collect it in the first place). (Remember the markets are settled in currency and all accounting is done based on currency, you can't just invest in AAPL with corn).

I can't imagine a normal person owning an iPhone and buying apps from an app store under the hypothetical situation. It seems to me to have a very high utility to the individual at the top of the income chain. You are completely ignoring many of the benefits of having a functional government and a stable society with many consumers (whose consumption is supported by those tax dollars) who are able to consume because of the constructs put in place by a treasury and a tax structure.

I think you're underestimating the intangible value returned by governance. It is near non-finite.

So assuming governance and currency (we can agree these have utility?), taxes can be looked at as being closer to a hedge against inflation than anything else (that is, they prevent devaluation of the currency). As a thought experiment, imagine if the government weren't allowed to collect taxes AT ALL.

How would it fund itself?

Well it controls the treasury, so it would print money, and it would issue debt (bonds). It already does this, incidentally. Both of these things would devalue the currency. (Printing money means more in circulation (its easier to get... therefore worth less), whereas a bond would promise of a certain amount of money that I plan to print in the future). These can be treated as similar, at very least.

So the real (interesting) question about taxes is tax structure. If we assume a flat % tax, it is pretty close to the above devaluation scheme. If we assume a flat $ amount, it very quickly becomes regressive, disproportionately penalizing the poor a large percentage of their money, preventing them from having anything to spend at all. That's how you get a revolution.

With a progressive tax structure, those who can comfortably pay more, do pay more, those who can't don't. (All the way down to certain people being taxed negative amounts in certain situations).

All that said.

Yes, sure, the corporation should move to jurisdictions which are the most friendly to its tax status... it is a fiduciary responsibility to the shareholders, anything else and they are leaving money on the table. At the same time, powerful governments should pressure these corporations into giving them a cut of any business that they do under that government's jurisdiction. In fact, they have a responsibility to do this so that the government can continue functioning properly.