[rayiner]

Unfortunately Mass. has unfunded pension liabilities exceeding $20 billion (not including municipalities), and unfunded health care liabilities exceeding $45 billion (including municipalities. At the same time, states will have to deal with the new normal, which is lower economic growth indefinitely and lower returns on invested assets.

As a result, states will ratchet up taxes to cover their increasingly untenable budgets, as we've seen in Illinois (which recently almost doubled its state income tax) and Mass.

My guess is that this process will accelerate the internal migratory trends that are already in place. E.g. Nebraska, which banned defined-benefit pensions in the 1960's is sitting pretty with $43 of unfunded liabilities per person. Relevant to tech, the following states have big research universities (and thus a supply of educated workers) and also relatively manageable unfunded liabilities: Pennsylvania, Michigan, Wisconsin, Texas, and North Carolina: http://www.nasra.org/resources/Moodys1101.pdf.

[mjn]

I don't disagree with the macro point, but if you don't like this particular tax, Texas would be a poor choice of alternatives, because it already applies sales tax to an even broader class of software services than MA is now doing. For example, even hosted services like SaaS are covered under the Texas taxable-services definition, in cases where Texas has sales-tax jurisdiction (e.g. your business has an Austin office, and you have clients in Houston).

See section Data Processing Services here: http://www.window.state.tx.us/taxinfo/taxpubs/tx96_259.pdf

Examples of data processing include ... web hosting, web site creation and maintenance; data storage, including offsite backup of electronic files; conversion of data from one type of medium to another... . Data processing services providers include sellers of software as a service and application service providers.

That would, for example, mean that a service like Tarsnap or Heroku would be subject to Texas sales tax, if they had a Texas nexus for sales-tax purposes, which isn't the case in Massachusetts even under the new law.

[arohner]

I disagree, because in Texas, the sales tax is significantly more clear who is affected. "You have an office in Texas, you pay tax" is pretty simple.

[jeremybencken]

'data processing' is still unclear for many. I'm in Austin and last month I had a graphic designer/front-end programmer add sales tax to an invoice because he thought he had to.

[cinquemb]

Unfortunately Mass. has unfunded pension liabilities exceeding $20 billion (not including municipalities), and unfunded health care liabilities exceeding $45 billion (including municipalities. At the same time, states will have to deal with the new normal, which is lower economic growth indefinitely and lower returns on invested assets.

Is there any place where one can read about this/ any place where one can see data? Now that we are in the new normal and have seen cities like Detroit go bankrupt, maybe states are facing the chopping block as well (depending if they can still afford to make payments on their liabilities). It will be interesting to compare other places based on their financials as well.

[kmfrk]

Chicago is also boned in the future: http://mobile.nytimes.com/2013/08/06/us/chicago-sees-pension....

EDIT: Alternatively http://www.suntimes.com/news/cityhall/21642911-418/city-defi....

Keep in mind that Detroit had loaned money from other states that aren't likely to get it back.

[cinquemb]

Do states and cities release data like this for the public to see (kind of like open gov api's in csv/json/xml)? I wonder how many more cities/states are taking loan money from other cities/states and are facing the gaping holes in their budgets? It would be pretty cool to throw something together and put it up on github.

[smsm42]

These data are probably available buries somewhere in periodic financial reports that many cities publish, but as far as I know, there's no common format, many of these reports are not well readable by tools (best case - nicely formatted PDF with numbers buried somewhere within, worst case - PDF scan of some typed pages with numbers buried within) and as far as I know no site that actually aggregates these data into one database. Given the variety of funds, arrangements, regulations and other things, it would not be very easy to create such a database, probably would require a very large investment. And since it the initiative for local authorities to participate in it is next to zero (worst case, it will expose them for criticism, best case they're OK but not getting any benefit) it would probably very hard to pull off. I'd be glad to be mistaken on this.

[cinquemb]

I think you are spot on. I've been searching, and mostly coming up with PDF's (that do give the overall numbers) with very little break down for cities.

It's a pity that with all the hand waving over Open Gov initiatives that things like this are still buried, while I can easily find out all the different colors of street lamps implemented for the past 10 years for xyz neighborhoods…

[smsm42]

Feds probably could use the power of federal grants (or withdrawal of such) to make much more order in this area, but I guess politicos are busy with more interesting things than getting some data in order.

[kmfrk]

If they do, the Sunlight Foundation would be the people to ask: http://sunlightfoundation.com.

[cinquemb]

Just checked, and they don't seem to have anything dealing with this.

Though a quick search has led me to find TIF Projection Reports for Chicago[0] from searching "debt obligation" in metro Chicago data [1], but I can't seem to find any past dealings (not sure how to look for it). I want to try to put the revenue generated from taxes (across different sectors if possible), servicing of obligations, population changes, and projected obligations in perspective, and compare to other cities/municipalities/states.

[0] https://data.cityofchicago.org/Community-Economic-Developmen...

[1] https://www.metrochicagodata.org/browse?limitTo=datasets&q=d...

[anigbrowl]

Yes, but because everyone wants their local government to be independent from big bad state and federal governments there's almost no consistency in the format or publication requirements.

[cinquemb]

Right, so everyone in this case are local bureaucrats who are partially employed by big bad state and federal governments through handouts from taxation and monetary inflation, who don't want to show if the emperor of their local debt obligations aren't wearing any clothes (possibly because of what recognition of misallocation of resources/labor entails), because the public is not demanding it from them today?

There's gotta be money in opening this can of worms up, right?

[anigbrowl]

No, everyone includes all the people who live in a district that complain about too much government and object to things like national curricula or accounting standards or whatever. That can include bureaucrats but isn't necessarily limited to them.

This sort of thing is one of my interests and I even sort of enjoy digging through budget documents to root out these nuggets of information. Financial analysts and people like that do it too, but most of the general public is just not all that interested in such details. I used to think that if you simply put the information in front of people, a lightbulb would pop on over their head and they'd start demanding fiscal accountability. Turns out, much like environmental, development, and other long-term issues, that a lot of people feel overwhelmed and just tune out completely.

If it was just a matter of making the information available, then The Economist would be the most widely read newspaper.

[dmarusic16]

The Economist had a great article on this the other week: http://www.economist.com/news/united-states/21582282-pension...

[pc86]

It isn't a foregone conclusion that states and other governments must increase taxes. If there's less money to go around, they could always spend less money.

I'm not trying to make a political point, but there are certain states where the knee-jerk reaction is all too often to increase taxes - or to tax unpopular things like cigarettes - rather than take a look at the budget and see if there's a middle ground.

[rayiner]

Unfunded liabilities are spent money coming due. You can cut services in other places, but that's a similar tradeoff. At the end of the day, why live in a state that taxes you like California but gives services like Tennessee?

[mjn]

That's sort of how I feel about U.S. taxes in general. I paid somewhat lower taxes in the U.S. than Denmark, but it felt like I got a ton less service. Despite paying taxes, there was no public healthcare, even public university charged thousands of dollars in tuition, transit wasn't great, unemployment insurance was relatively poor, public services like libraries were overcrowded, housing assistance had a 10-year waitlist. I'd happily pay more taxes in the U.S. if I felt that I got a high level of services. Or alternately I would feel that a fair rate for the level of services I did get was much lower.

[bobbydavid]

Have you seen that d3 visualization of the US federal budget? It's pretty interesting. Social security, Defense, and Medicare make up the lion's share of spending. you probably don't use these (except defense, arguably indirectly, but I suspect your politics would disagree with the budget size)

[mcv]

He's probably using social security and medicare more than defense. The chance that he gets sick or unemployed is probably a lot larger than the chance that the US gets attacked or significantly threatened.

Knowing that you're covered in case anything goes wrong is enough to make the taxes worth it.

[rayiner]

That's kind of a misleading comparison. The chances of the US getting attacked or threatened are low because we have tremendous war capability. For examples of the opposite, see Tibet, Palestine, etc, or all the countries that were colonized by the Europeans, or the countries whose natural resources are being extracted on questionably favorable terms by companies like Shell.

Every American benefits from the fact that we can dictate terms in nearly any interaction with other countries. It's a huge aspect of our political dynamic that most Americans take for granted, because they have no experience with a country where the democratic will has to be tempered by considerations of how military superiors will respond.

[thecodeore]

I would prefer to pay for services I use then to have the money stolen from me by force while people pretend it is moral because it is called "taxes"

[rwl]

OK, you're trolling here, and if I could downvote you for it, I would; but since I can't, let me try to raise the level of discussion:

> I would prefer to pay for services I use

I invite you, sometime, to think about which services you really use, and try to figure out how much it would cost to purchase each of them if you were doing so on your own. Don't forget: police protection, fire protection, military protection, paved roads, functioning traffic signals and signs, groomed parks, trash collection (some places), up to sixteen years of education, enforcement of workplace safety standards, financial protection if you become suddenly disabled, a legal system in which to resolve disputes. I don't know what your specific situation is, but just about everyone benefits from those government services in the U.S., and you personally may benefit from many others. I'm guessing that purchasing the first three alone, as an individual on a private market, would probably outrun the total you pay in taxes.

You could lower the individual costs to you of a lot of these by finding a bunch of other people who also need these services, and pooling your money to buy them together. That's just how democratic government begins.

> have the money stolen from me by force

This is a dishonest characterization of the authority of a democratic government to levy taxes. Yes, if you don't pay taxes you owe, someone might come and take your property, and those people might have weapons or threaten you with imprisonment. But that is a measure of last resort, which will surely only be taken if you fail to respond to a long line of more reasonable measures. It does a great injustice to people who actually live under oppressive regimes to compare the collection of taxes under a democratic government to the kind of arbitrary, might-makes-right authority those people are subject to.

Furthermore, by characterizing taxes as 'stolen' money, you are implying that you somehow have an absolute or natural right to have it. Why do you think that? No matter what you do for work, the amount of money you take home is not the product of your exclusive efforts. It also depends on the protections you get just by living in a society that provides some of the services I listed above. You would take home a lot less if, for example, you couldn't rely on the police and legal system to prevent armed bandits from plundering your place of business whenever they please. You'd also probably be a lot less productive if you had to worry about such things on a daily basis. There's a lot standing behind 'your' money that isn't yours, by any reasonable measure.

> while people pretend it is moral because it is called "taxes".

A democratic government's authority to levy taxes does not derive from the name, nor from the force that it can, in extreme cases, use to collect them. Like the government's other kinds of authority, it derives (most people think) from the consent of the governed. Behind that phrase are some important and difficult questions, to be sure. But you are not helping to answer them by characterizing taxes as 'stolen' and 'immoral'.

[Houshalter]

>I invite you, sometime, to think about which services you really use, and try to figure out how much it would cost to purchase each of them if you were doing so on your own. Don't forget: police protection, fire protection, military protection, paved roads, functioning traffic signals and signs, groomed parks, trash collection (some places), up to sixteen years of education, enforcement of workplace safety standards, financial protection if you become suddenly disabled, a legal system in which to resolve disputes. I don't know what your specific situation is, but just about everyone benefits from those government services in the U.S., and you personally may benefit from many others. I'm guessing that purchasing the first three alone, as an individual on a private market, would probably outrun the total you pay in taxes.

First of all the comment he was replying to was talking about services like housing, transportation, and healthcare, which already are provided by the market and aren't really things the government has any advantage in. As for all the stuff it does pay for, at best it costs exactly the same amount as you have to pay in taxes. But the government spends money on a lot of other things with your taxes that don't really benefit you. So you would save a decent amount of money. And with no competition, the services they do provide cost a lot more then they probably could.

>You could lower the individual costs to you of a lot of these by finding a bunch of other people who also need these services, and pooling your money to buy them together. That's just how democratic government begins.

This applies to any service. Anything from food production to software development. A lot of people need those things, and they could cut costs if they pooled their money together for them.

>This is a dishonest characterization of the authority of a democratic government to levy taxes. Yes, if you don't pay taxes you owe, someone might come and take your property, and those people might have weapons or threaten you with imprisonment. But that is a measure of last resort, which will surely only be taken if you fail to respond to a long line of more reasonable measures. It does a great injustice to people who actually live under oppressive regimes to compare the collection of taxes under a democratic government to the kind of arbitrary, might-makes-right authority those people are subject to.

He was definitely using words with bad connotations, but technically it is true. Everyone pays their taxes to avoid having their property stolen or going to jail. The fact that force isn't applied unreasonably doesn't mean it isn't there.

>Like the government's other kinds of authority, it derives (most people think) from the consent of the governed.

There are people that don't consent. At best you could say the majority consent. You can justify it by saying it's better than any other system we know of, but not that people consent to it.

[yummyfajitas]

Don't forget: police protection, fire protection, military protection, paved roads, functioning traffic signals and signs, groomed parks, trash collection (some places), up to sixteen years of education, enforcement of workplace safety standards, financial protection if you become suddenly disabled, a legal system in which to resolve disputes.

Those services make up a fairly small portion of government spending. The really vital portions [1] are even smaller.

Most government spending is merely wealth redistribution.

http://www.usgovernmentspending.com/piechart_2011_US_total

[1] Vital: protecting the US from Russian invasion. Non-vital: drone strikes on random Pakistanis. Vital: protection from bandits. Non-vital: war on drug users.

[anonymoushn]

Let's check out the federal budget!

http://en.wikipedia.org/wiki/File:Fy2010_spending_by_categor...

19.63% for generational theft, which I pay into but will never see a penny of.

18.74% chiefly for killing brown people on the other side of the planet, generally people who were not a threat to the U.S.

16.13% for programs that are like basic income except that they create awful incentives, are vulnerable to fraud, and have high administrative overhead (mostly people trying to stop the fraud?).

12.79% for health care for the elderly. This program is actually pretty effective, if we ignore the bit where health care providers dramatically overcharge people who do not use it to make up for being underpaid by those people who do use it. It's also questionable whether it will exist in its current form 40 years from now.

It makes sense for me to look at the federal budget because I pay very little in state and local taxes. People who pay more state and local taxes generally end up spending it on paying CHP staff $400,000/year or ensuring that teacher pensions return 8% year over year when no investment on the market does that.

Given this state of affairs, it's not unreasonable to think that you could make some substantial savings when purchasing the services you would use through means other than an annual mugging.

[thecodeore]

I do not believe, support, or accept "democracy" or mob rule. I do not believe the "majority" has the moral right to lay claim to my labor or the product there of, nor tell me how to live my life. I believe in Non-Aggression Principle and the voluntary exchange of goods and services

You are correct in I do not exist in an island, however I do VOLUNTARILY exchange my labor for goods and services, this is society, not the immoral democratic structure you call "government". Government is a vile, evil entity that seeks to destroy society not build upon it.

>police protection,

Police are not today, and never have been a protectionarly unit, you can not cite any case law, or evidence to support that belief, if they were there would not be the need for self defense, private security, and entire industry producing goods and services for protecting one's self

Police are a Harassment and control mechanism for the state to force arbitrary laws and regulations passed by special interests, the majority or other such groups. They are nothing more than a gang of thugs.

>fire protection,

Historically Fire Protection was provided quite well and for a much lower cost privately, infact come counties are going back to that model.

Today I live in a Region with a 100% VOLUNTEER fire protection services that is supported by VOLUNTARY DONATIONS by the community, instead of violent forced collections. Our fire services is the best in the region with faster response times then the surrounding areas where they are paid to sit on their asses all day with money stolen from the community.

>military protection,

Most of the Military Budget today is used for Unjust and immoral wars, and immoral surveillance. I, just as our founders, do not believe in a Standing Army.

>paved roads,

A good % of roads are PRIVATE roads, further public roads can be funded exclusively with user fees which I have no problems with, as if your using the road you should pay for them, however they should not be funded with Income Taxation, Property Taxation, etc.

>functioning traffic signals and signs

See Above

>groomed parks,

Parks are not a proper role of government, I have never used a City Park, have no desire to use a City Park, and my money should not be stolen from me to pay for a city park

>trash collection (some places),

I have a private collection service that I pay monthly

>up to sixteen years of education,

Calling government schooling an "education" is laughable at best

>enforcement of workplace safety standards,

A System of Strict liability would be better for that

>financial protection if you become suddenly disabled,

I have private Long and Short term disability insurance, even if I did not that should be done via community charities not through the forced taking of other peoples money

http://www.youtube.com/watch?v=PGMQZEIXBMs

> a legal system in which to resolve disputes.

The legal system should be paid for by the people that make use of it.

[redthrowaway]

He's not trolling, it's just a kneejerk libertarian comment. There's a strong thread among the more vehement economic libertarians of taxation being theft enforced by the government's monopoly on force. It's a bit silly, but it's also a sincerely held belief.

[pmorici]

"police protection"

I've had the misfortune of having to deal with the police of two different police departments this year. In the first instance my car was stolen, in the second someone ran into my car that was parked on the side of the road. In both instances the Police were totally incompetent and arguably caused me more financial damage than the criminal and the out of control driver.

Here is how; Once the Police "recovered" my stolen car I had to pay their towing company of choice about $400 to get my car back. In the second case they have taken over a month to issue the police report about the accident; my insurance company won't pay to have the car fixed until they have the report so I've had to front the costs in the mean time and hope that they get their act together at some point.

I think I would have been better off in both situations if there had been no police and my taxes were a bit lower.

[rayiner]

Taxes are what you pay to transform the act of killing and eating you into "murder" from what it really is: natural selection.

[dalke]

Ahh, yes, "nature red in tooth and claw" and all that.

Social Darwinism went out of fashion about 60 years ago. In part because its philosophical underpinnings had little to do with Darwin or evolution.

For example, an alternate view is that taxes are part of kin selection, in that those people who pay more taxes end up with a social system which is better at raising successful children who continue that culture and practice.

[lmm]

No-one's doing any pretending. Your morality may differ from other people's, but that doesn't mean theirs is insincere.

[alan_cx]

Tax is paying for services you use, which is very moral.

[Houshalter]

That's not really true. You can avoid most if not all government services and still have to pay the same amount as everyone else. They also have a monopoly on most things. It's not like you can go to a competing service.

[yason]

Simply increasing taxes will educate the decision makers about the http://en.wikipedia.org/wiki/Laffer_curve eventually.

Taxing spending on harmful things is better than to tax work and activities because what you tax will diminish.

[lmm]

My country had a top tax rate of 85% at one point (with a 10% premium for unearned income). Society didn't collapse; in fact many of us remember that as a golden age.

[CamperBob2]

Are you referring to the US in the 1950s, as tellers of this particular just-so story usually do? If so, that prosperity came about because we had just finished shooting, bombing, nuking, and in general pounding the living daylights out of the rest of the industrialized world.

WWII wasn't about who was right, it was about who was left. To the victor went the spoils. Meanwhile, there was a war to pay for, hence the high tax rates.