I'm trying to be more optimistic these days, so I'm leaning into the benefits for my State as more people will be migrating to Florida in the coming years. More people will give us more representatives and, potentially, more non-socialist Democrats coming into the State.
Plus, it would be nice to have our very own Crown Heights neighborhood in, say, Miami or Jacksonville.
Based on current projections, Florida is expected to gain 4 seats in the 2030 reapportionment while New York will lose 2 seats. I predict that these changes will be even greater after Mamdani's tenure as Mayor.
Surely that’s for general warmer weather / cheaper housing reasons plus retirees who no longer benefit from NYCs job market. People talk a big game about moving for political reasons but moving is hard!
I think the political reasons manifest indirectly. When costs are high and escalating and quality of life is falling, in part owing to poor leadership, people with options might choose to leave.
I dunno, my parents, grandparents, and sister fled suburban Atlanta, Georgia in 2021 because they were terrified of BLM and of a potential Stacy Abrams governorship. Well, really, my parents initiated the move for clearly political/ideological reasons and then the rest of my family followed them in about a three month window. Some people definitely move for political reasons even if the likelihood of those outcomes (GA going fully racial reconciliation left) are low.
I tend to think that your family likely moved for economic and social reasons - but falsely claiming that it for political reasons makes for good conversation pieces amongst other conservatives.
Nothing signals "I'm a strong gritty Clint Eastwood-type conservative" more than "I moved from the big city to this here small town because I couldn't take any more of the libs and their woke socialism!"
And then Stacy Abrams loses - if they were telling the truth they would have moved back!
I don't think that's what John is implying. I think he means that Mamdani's policies will lead to outcomes people dislike, prompting them to move, not that they move because of the mayor directly. John can defend himself though.
If you raise taxes, reduce policing, ignore homeless encampments, practice and embolden NIMBY policies for spurrious environmental purposes or to prevent the dreaded "gentrification", then people are going to move for sure because it makes economic sense for them to do so (cheaper housing, safer streets, etc).
So in that sense poor liberal/left governance does indirectly lead to white flight. But these things can still theoretically happen with centrist or conservative governance as well.
But no one directly makes the decision to move because so-and-so was elected mayor or governor. Maybe the occasional ultra-rich eccentric like Rosie O' Donnell might do this, but my bet is she was already thinking about moving beforehand.
Yeah, I think few people move because they hate the governor or mayor, but a lot of people move because they can't afford a house or they keep getting mugged or the local schools are terrible and they can't afford private school for their kids. And that's secondary to the choice of mayors/governors/etc. over many decades.
I mean ... define "a ton". What % moved to NYC? All the portfolio managers I know were forced to move to Miami and the one support leader I know who's still here will eventually have a go / no-go to relocate to Miami.
If anyone is looking for a discount version of Chicago, we here in Cleveland will welcome you with our great museum, world-class orchestra, low cost of living, weird and scrappy arts/music community, and requisite moribund local politicians. But our corruption is very much small potatoes these days, and the beaches are finally clean.
Interesting. I was at the now Griffin Museum of Science and Industry in November. I was talking to a gift shop employee about postcards. They didn't have any yet due to the name change. She said that gift shop sales and museum membership had decreased a lot since adding Griffin's name to the museum. Maybe in a few years Chicagoans will forget who he is
Maybe. The Daley's who loomed so large for so many years even now rarely come up. But there's no doubt our city and state are far worse off that Citadel left. It's a shame.
Yeah, not the race itself. But the outcome of implemented policy? For sure.
Government grocery stores is a truly dumb populist idea. The US has great private grocery stores. I’d love to hear someone make the case for private grocery stores. I am at a loss for how this adds to the general welfare of the City.
Republicans can run on this. Democrats want to take away your grocery store and replace it with government run stores like in communist countries.
It’s the greatest city in the world, but whatever.
The list of reasons for New Yorkers to decamp to Florida is long and includes, among other things, no state income tax, more freedom, no snow, and lower housing costs.
100% agreed, I feel more unsafe in Savannah or Tampa after midnight than I did in Manhattan or Jersey City... Gun violence and drunk driving are legit issues in the south.
NY State has a murder rate of 4.5 per 100,000 as compared to Florida's 7.2 in 2022. I would suggest Florida is either massively underreporting violent crime or violent crime there is especially deadly, either of which strikes me as a massive quality of life downgrade.
While I don’t have anything on hand to link, iirc the biggest factor is housing costs followed by cost of living more generally. Housing in much of FL is cheaper than NYC but the gap has narrowed in recent years as other costs have risen. That, and how many New Yorkers are moving to smaller cheaper more Southern culture panhandle towns vs the more expensive Miami, Tampa, and Atlantic coast areas?
Even the midsized cities in Florida saw a pretty notable New Yorker bump in the pandemic. Like the cities vaguely looped in with Orlando and Tampa did.
I’m sure it didn’t effect the counties with 50,000 people in them but it was notable in say Saint Cloud or Sanford which are in Orlando only In that the touristy amenities are usable.
Afaik the inland cities like Lakeland also gained a lot of population. Sometimes I wonder how much of Florida’s economy is sustained by pensions paid out from blue states to their retirees in Florida. That would be interesting to know.
I’ve seen some scary sounding predictions regarding New York City taxation, but have not really looked into the details. Does a NYC mayor need the permission of the state government to raise taxes?
In general yes. NYC is remarkably constrained in what it can actually do without state approval. The MTA is run by the state and there are even pretty strict state rules around speed limits, etc.
NYC’s mayor is pretty much limited to executive functions, but those powers can be quite broad. For instance, the mayor appoints major department heads (Police Commissioner, Schools Chancellor, etc.) without needing to get the agreement of the city council or anyone else. The mayor cannot raise taxes or appropriate money in any other way without the city council’s ok, or, in many cases, without state action.
The free bus footnote mentions crowding but fails to mention crime/disorder. On average, people who are unable/unwilling to pay the bus fare are more likely to be disorderly or commit violence. Causality is hard, but it seems likely that an increase in fare enforcement was part of why crime on the subway has gone down.
I am guessing that the biggest barrier to taxing the wealthiest among us is that politicians rely on wealthy donors to get into office in the first place. After all, the top 1% of income earners only make up 1% of the population. It's not their literal votes that are the problem.
This is a much smaller problem if your campaign rejects donations from super PACs.
I don't want to be taxed more. But I want the ultra wealthy and the pretty-darn-wealthy to be taxed more. I don't care if they already pay a ton in taxes. Pay more. They have too much stuff and I don't have enough. Cough it up.
It really is important to understand "no tax on tips" is a restoration of a status quo. Despite the morally condemnatory language of "cheating", there are lots of forms of income that are technically taxable but which the American public never particularly demanded tax enforcement on. Cash tips were one example-- so were various forms of cash payments among friends, winnings on home poker games and informal betting pools, payments for lap dances at the strip club, etc. Nobody ever reported this stuff, the IRS did not go to great lengths to detect it, etc. And if you had gone into a public debate and screamed about how terrible it is that people don't pay taxes on the $1500 they won from their friends in a poker game and the IRS had to engage in surveillance and catch these people, the public would have found that very strange.
Technology shifted tips from something in that category to something that is much more easily tracked. This resulted in a de facto tax increase for tons of Americans. And I don't think that it's any wonder that "no tax on tips" is popular-- there was never any groundswell of support for taxing this in the first place, it wasn't taxed at anywhere near the actual amount of income for generations, and nobody was upset at it or thought the people underreporting it were contemptible "cheaters". "No tax on tips" is just a way to restore a status quo everyone thought was fine.
This seems backwards. We didn't collect taxes on tips because the effort to collect them was difficult and mostly not cost effective. It wasn't because there was some inherent goodness to getting paid in tips vs. getting a higher set wage. Similar reasons why we used to fund the government with tariffs instead of income taxes, but once we had the technology to do the latter we did that because its much better.
Your second sentence is correct. So now applying the changing technology to collect tax on tips is a tax increase that almost nobody actually cared about or was calling for.
So it is understandable that the public reacts to this by saying "we never asked for this tax increase, repeal it".
I find the argument equating people not paying taxes on sources of income traditionally not worried about it with serious criminals to be absolutely outrageous. Similar to what the Right does when they call people "criminals" for crossing the border without inspection.
We never have had 100% law enforcement in this country, we never will, and hopefully we never try, because only a totalitarian society can achieve it. Some violations of the law are functionally harmless.
First, I called it crime. Nothing in that has the word serious. Secondly, this seems like an untenable position. Do you think shoplifting isn’t bad? Taxes in particular are very reliant on voluntary individual compliance.
I’m not out here arguing that people are vicious criminals when they don’t pay taxes on everything they sell on Craigslist, but it would be weird for someone to argue that there shouldn’t be tax on something like eBay because it’s a peer to peer transaction.
Tips don’t deserve to get treated as a special type of income. Cheating on your taxes is bad, so the argument that lots of people have broken the law so it shouldn’t be a law isn’t one I have much respect for.
"the public reacts to this by saying "we never asked for this tax increase, repeal it"."
The "public isn't calling for this tax to be repealed. People who get tips are. And a big issue is that the same increase in technology that has enabled taxing of tips has spread tips dramatically further than they used to be.
Really I wish liberals who hold highly elite views should stop assuming the public agrees with them. In fact the great and good American people want this new tax repealed and the previous status quo restored, and they should prevail.
Come on Dilan, this is silly. The public wants ALL taxes decreased except for disfavored groups. But tell the American public that to remove taxes on tips and regular income taxes have to go up 2%, and I'm betting that popularity crashes.
I will also note that taxes on low wage earners have actually gone down substantially over the last 30 years. Compare tax rates from 1995 to 2025!
Re: "Technology shifted tips from something in that category to something that is much more easily tracked." But technology *also* shifted tips to something that is much more ubiquitous.
Not really. Yes, there's more tipping now, but not as much more as elites portray. There was actually always a tip jar at Starbucks, You could always tip your dog groomer if you wanted to.
Elites perceive this as much more of a change than it is because they patronize more of the businesses where tipping is now shoved in front of their face.
I think it's the fact that as Stripe and similar things started showing up in non-food businesses, you would start seeing a tip screen by default at a place that never had a history of tipping. Plus, you had places setting the default tip options to things like 22%, 25%, or 30%, so if you want to tip just 20%, you have to click more and annoy everyone. I mean, nobody wants to be asked to give a 30% tip at a hardware store.
I'm not sure why you're focusing on elites here. I think you're underestimating how much this is specifically middle class people complaining, while liberal elites scold everyone else into tipping.
I think the tipping options on card readers are doing most of the work here. I was always happy to ignore the tip jar at a place where I'm getting takeout, the card reader tip options slow me down.
By that logic, replacing income taxes with tariffs is fine - we didn’t used to be able to track income, so we taxed only the things we could track, which were international shipments. Technology changed, so we tried to make the taxes more broad based and less distortionary.
Not analogous at all. Few people were calling for the repeal of the income tax system. Most of the public was just fine with it. So there's no groundswell to replace it completely with tariffs.
But "no tax on tips" is popular because it DOES restore a status quo.
The easy way to lose any tax argument in a democracy is to make arguments about economic distortion.
Yes, I understand, the purist ideal is a tax system that has no tax arbitrage effects. But in the real world we don't have that system, there are tons of distortionary tax breaks and preferences already, and people prefer this sort of thing to the more purist ideal.
At any rate, it isn't any more distortionary to not tax tips now than it ever was to not tax tips. We had this particular distortion in our system (in the form of informal cash tipping) for decades and our system worked fine. Because in truth, it's not a big deal that there are some distortions created by the tax system.
Agreed. And there's no need for exotic stories about strippers or gambling- the vast vast majority of tipped workers who weren't paying taxes before the 90s were regular boring jobs like waitresses/waiters, taxi drivers, valets, etc. That's probably tens of millions of workers. You got tips in cash, you obviously didn't declare them on your tax return
Correct. I only use strippers and gambling as examples because there are lots of pockets of cash compensation in the economy and, again, it didn't really bother people that not all this compensation got reported. Suddenly the tipped worker got pulled out of that world by technology and it is reasonable for the public to want to restore the status quo ante.
Incorrect. What is actually asinine is insisting that because technology changed a status quo, in a democracy, without anyone consulting the public about it, that we should ignore public opinion and just let it stand as a stealth tax increase.
The public was consulted. They preferred visa over cash. And good lord, this is one of the mildest possible changes to the status quo. If this is an appropriate response to fixing a minor tax loop hole in your view, one can hardly blame billionaires for lobbying to slash Medicaid and return their tax burden to a 2014 status quo. The public my ass, rent seeking is rent seeking.
No one likes that we now pay sales taxes on internet purchases, but we aren't demanding state governments remove it. Also, the median age of wait staff is apparently 25.9, so the number of people who worked in the world you reference is rapidly dropping.
With regards to your gambling example, losses are deductible so in that world, it should be a wash (ignoring for the moment that most don't itemize). But it would be funny as hell to get a 1099 in January from your friend.
"No one likes that we now pay sales taxes on internet purchases, but we aren't demanding state governments remove it."
TERRIBLE analogy. The status quo on sales was we PAID taxes. Then the Internet came around and we didn't, and we eventually restored the status quo where we paid taxes.
The COMPLETE opposite of tips, where we DIDN'T try to collect taxes due, then technology made that possible, so we are now restoring the previous status quo with no tax on tips.
"With regards to your gambling example, losses are deductible so in that world, it should be a wash (ignoring for the moment that most don't itemize). But it would be funny as hell to get a 1099 in January from your friend."
In reality lots of people owe taxable income on informal gambling, almost nobody reports it, the itemized deduction thing is huge (because technically if you win even $1 at one session and you take a standard deduction you are required to report it), and nobody thinks this is a terrible status quo because most of us are normal people who don't think perfect tax collection of minor cash transactions is necessary and we aren't worried about some economic distortions as long as the system works fine.
I'm kind of amazed at how invested you are in this argument. I think the whole issue is kind of dumb (even though you may be right about the popularity) but really don't care that much about it.
BTW - it was really cool that you got quoted in the NYT.
So obviously I concede this isn't the biggest thing in the world. For the same reasons I didn't think anything was wrong with the old status quo, it's not that the new status quo is terrible. If tips are taxed, it's not the end of the world.
But I do think there's a principle here, beyond even democracy. And that is what Prof. Orin Kerr calls "equilibrium adjustment" in the 4th amendment context-- that new technologies shouldn't impose stealth constrictions on people's freedoms simply because it becomes possible to do things that weren't possible before. To me, this strikes me as a classic equilibrium adjustment problem, so when I saw the "no tax on tips" polled well, I did get behind it. It struck me as exactly the sort of thing where vox populi should prevail to uphold the principle.
But, again, if we ended up not repealing the taxes on tips, I'd be... fine. We'd survive either way.
Pay in cash and then tip the loose change plus $0 or more dollars in bills, based on what you believe to be a fair tip. That avoids up charging via tipping and consistent with previous 90s-era tipping behavior.
Or just select $0 on the tip screen. We progressive need to learn comfort in implementing our beliefs, even if some people think we're assholes for it. I've had plenty of disputes with cashiers over the years and I'll gladly fallback to order-via-app for pickup and self-serve checkout to avoid hostilities if needed.
Telling people to fight government policy by making personal choices that go against it is not very helpful. Structural problems require structural solutions, not individual decentralized quixotic stands.
MA had a referendum to get rid of the tipped minimum wage (and therefore increase wages for restaurant workers to standard minimum wage). Opponents didn't make the Econ 101 argument that higher wages cause job losses. They said that if you raise wages $4/hr then tipping will drop by $6/hr because people will think they don't have to tip anymore. It was all very strange and no one made any sense. I can't imagine how ugly a fight to actually get rid of tips would have been.
Yeah that argument made absolutely no sense. Looking at all the states that already have no tipped minimum wage like California, the tip culture is no different at all.
Clearly on its own, raising the tipped minimum wage just raises waiter wages even more while doing nothing to help kitchen staff, so my initial inclination was to vote no - we don't need to make the front-of-house and back-of-house pay gap even bigger than it already it is. However once I saw that the referendum had an explicit provision to allow tips to be redistributed to kitchen staff, once tipped minimum wage equaled the full minimum wage - that was enough to swing my vote to yes.
I was dismayed by this legislation, and the fact that nearly all Democrats supported it. But I do recall the bill supposedly sets limits on the types of job classifications that the new tax tweak will apply to.
Yes, the "everyone will just classify their income as tips" people are being a little silly. Why didn't everyone classify their incomes as tips and take cash payments back before the IRS could electronically track tips?
Because the pos systems and electronic transfers are fundamentally different than cash tips.
You could do this with no outward change to the consumer which would have been quite difficult to do under a cash tipping regime. Our service is x percent less expensive with a mandatory tip is just some square fine print that no one reads. In a world where we pay for things by just waving our phones at things it is pretty different than cash changing hands.
Pre-the electronic revolution, you could absolutely agree with your employer to classify some of the revenue as cash payments made directly to you as an employee.. That would have no effect on employer taxable income (it would reduce revenue but also reduce labor expenses) while reducing yours. This option was always available and the IRS, much of the time, would have no way to really detect it.
And yet-- people didn't do this for the most part. It did happen, but it wasn't common.
So the notion that post-"no tax on tips" everyone's going to engage in this sort of misclassification of income strikes me as highly unlikely. It didn't happen before.
My theory for why it’s different is you could set up your pos system such that there wouldn’t be a downside risk that would exist in a cash system. People didn’t do this because the nature of cash income is subtly different and a world where cash transactions are very unusual it really rewrites what is possible to do without notice.
Oh I'm sure it's cheater friendly! I teach private music lessons, and I'm already wondering how much I can lower my rates but then replace the difference with "tips".
The chart showing after-tax money poverty dropping sixfold is so powerful I can’t think about anything else. If that line really captures the American experience since 1960, we ought to be patting ourselves on the back a lot more — and a lot more afraid of the bad old days.
This is why using the official poverty numbers which don't show transfers is so bad. It convinces people that nothing has changed, and nothing can be done. Worse is using the supplemental poverty measures, which are basically inequality measures rather than poverty measures. For those, if everyone including the poorest triples in income the number does even move.
The debate at the time was over whether they'd spike inflation. Real supply-sider patriots fact-checked these tax cuts non-inflationary.
In fact, the inflation fell so much faster than expected that real deficits grew much more than projected. This was fine and manageable. The actual problem is we just decided to throw way too much additional spending on Boomers. I'll check the OMB data from Biden WH, but iirc %GDP revenue average has only fallen like .8% post-Dubya from the post-Truman average at the same time %GDP spend average has risen 2.4%.
So if Reagan did zero deficits but permitted government taxes and spending to grow, this would be preferable for long run growth? I'm not enough of a deficit hawk to believe this.
Until bondholders and creditors demand much higher interest rates to compensate them for the loss in value of their principal. Then it's even worse for everyone.
Taxing consumption progressively and giving it to poor struggling people is better. [Although if they are struggling becasue of circumstance — sickness old age, child rearing, unemployment — I prefer “horizontal” transfers with a consumption VAT from out-of-circumstance to in-circumstance people.]
Good point, this is one of the reasons I get so frustrated when people bring up how this time period in American history is the worst ever, and we need to go back to the "good old days", those days were a lot worse for a lot of people. We should definitely be wanting to make things better, but people really take for granted how far we've come in a lot of areas, and our achievements.
In a society, like America, with a broad middle class, a very progressive tax system does not raise maximum or close to maximum revenue, because the middle class a whole has more money than the rich. You can eat the rich, or you can raise a lot of tax revenue, but you can't really do both.
I feel like there's a thing where everyone intuitively defines "rich" (and therefore deserving of higher taxes) as anyone who makes more than themselves. And given where we live and work, roughly half the people in our immediate circle probably make more than us. So we intuit that the taxable rich is roughly half the population, not a small sliver.
Yeah, it would be useful to have more words available to describe levels of income/wealth more precisely.
Something like:
- Service sector
- Skilled trades
- Nurses, pharmacists, etc.
- Doctor / Lawyer / Engineer
- $10M-aire
- $100M-aire
- Billionaire
My impression is that $10M is roughly the point where people stop earning regular W2 money and start exploiting tax loopholes, and I want those tax loopholes closed so people actually pay their fair 30%.
But it's true that the nurse / doctor tiers are the workhorse of our tax revenue and if you want to raise a lot of revenue, you need to target that group.
I think you're aiming too high - a lot of small businesses that produce income to an owner at much lower levels than
$10m achieve a reduced tax footprint through a combination of underreported cash income and creative accounting. Physician practices are also notoriously structured to minimize taxable income. Decent amount of ag tax engineering - I once knew a professional football player who bought a working cattle farm because it functioned as a kind of tax shelter, but then he got into the vibe and kind of turned into a cowboy.
In a world where conservatives are outraged by poor migrants breaking the law by sneaking across the border (or making an asylum claim), I love the wonderfully anodyne term "underreported cash income."
Not saying *you* are a hypocrite (no basis for that), just making a general observation about people's flexible sense of outrage.
I like the call the doctor/lawyer/engineer/"corporate" tier, which I'm part of, the "working rich" to distinguish us from the non-W2 rich people. We pay a lot in taxes!
I'm scarred from Reddit where if you suggest 37% someone starts yelling “but if capital gains goes above 20% investment will stop and the economy will die!”
There is where I feel like the framing of us against them doesn't really work. Either we are all in this together or we aren't. It's not so easy to identify a different class "them" we can just go after as scapegoats and simultaneously have no impact on "us".
I guess I need to revise my words. I agree with you. I just mean that revenue raising needs to include the middle class but that progressivity can also be increased.
That's a great point, some people assume that having any type of disposable income makes one "rich" or simply being able to take a vacation once a year, makes you rich. On the flip side, there are American's in a family of 4 and their household brings in $60k a year and they think they are upper middle class, and then I've met people who make $150k a year who swear they are poor. It's all vibes...
It’s kind of startling how bad “state run grocery stores” is, as ideas go. “Food deserts” probably don’t exist, but if they do, they’re pretty obviously chasing demand more than forcing it.
But also, the potential upside just isn’t there. Grocery stores have <5% profit margins. And the number of people starving in the street is a rounding error.
Is it just me? It seems like a red flag that this is even being proposed, like Mamdani’s circle isn’t willing to give good feedback or they’re not optimizing for good ideas.
So I read that there are something like 15,000 grocery stores in New York City, from bodegas all the way up. Mamdani is proposing a "pilot program" of five city-owned stores. It's dumb partly for the reasons you give and partly stacking the deck (e.g., apparently these stores don't have to pay property tax because they're on city-owned land -- nice!) But in the end, this strikes me as yawn inducing. It sounds like a "big new idea" but it's peanuts, for better or for worse.
This kind of thing, and Mamdani's baldfaced attempts to jump on the "Abundance" bandwagon combine to make me think this guy is a charismatic bullshitter. Such people can turn out to be big successes, but only if they understand that they are bullshitters and don't fall into the trap of believing their own bullshit.
I think when he originally proposed it he meant it because he's a socialist. Then when he had to moderate he said "well it's just a pilot program, we'll see." Kind of like saying he's not for defund anymore when earlier he said that feminism required defunding the police. It was always a stupid idea and doing five stores is still a stupid idea. No one sits around thinking that NYC government is so good at doing things that maybe it should try doing a new thing that is currently adequately done by the private market. I think he really did mean it as a big new idea and it only became yawn inducing when he decided to moderate.
I think he'll have to explain some of these things better. Kamala wasn't able to just say that fracking is cool now without explaining her past position. I don't think in a general Mamdani will be able to do that for defund. And he's very much promising to "freeze the rent" -- hard to back down from that one, but it will be a disaster if implemented.
We all misunderstood him. He actually said "free ze rent" in a weird French accent, and he was actually calling for a free market system that will spur development.
That is indeed a really weak pun, Marc, but I did not make it.
(I was surprised, though, that I could not come up with any other foodstuffs whose names incorporated the name of a desert. No Chicken Sonora? No Kalahari Kalamari? No, not as far as I can see. So, I used what I had.)
State run grocery stores is a terrible idea. But my very un-american take is that having little Caffefour express grocery stores within walking distance in every neighborhood is great. Apparently the way to get there is to just mandate small footprints for stores so that Costco and Whole Foods are illegal.
Meh, American suburbs are too low density to support everyone walking to the grocery store. So in a world where people are going to be using their cars to go shopping anyway, I don't see why we need to deprive them of the superior selection and pricing of large-format stores.
In parts of the US like NYC where the market can support it it, small-format street corner grocery stores you walk to are a thing. And... in my experience, in every respect other than being able to walk to them, they aren't a great shopping experience compared to the suburbs.
Because they're small, so they can't stock as wide a variety of products and their economies of scale aren't as good.
Also, those reliant only on walking to a grocery store near their house probably aren't going to have as easy access to other stores, so they won't have to worry about as competitive pressure so much, compared to a store with a customer base that can drive anywhere.
There was a study a while back that found poor urban neighborhoods weren't actually "food deserts" for the most part and in fact tended to have more grocery stores and restaurants than average:
What's the line of thinking on "they don't exist"? I feel like their existence is fairly obvious and straightforward, so maybe we're defining them in different ways
As a phenomenon defined by statisticians, sure they exist. As a problem for the communities affected, they do not.
It’s just an economic fact that stores satisfy demand rather than force people to buy their products. That’s why, even though the original food desert research is at least 2 decades old now, there are no interventions that have worked.
OK I see that point and largely agree that they are consumer-demand driven. But I guess I still lean to the side of them being "real", because there will of course be some people in any given community who would also like to have the kinds of food options that most PhD statisticians and nutritionists would like. But to some degree, it's a little like me calling a city in China a "food desert" because I don't like the food there.
Where I'd pushback a little more is that crime, safety and poverty can also play roles in that they can create "deserts" even from the perspective of communities who might prefer something other than a Whole Foods.
Yeah, if a store closes down because the margins aren’t high enough, but part of the reasons margins aren’t high enough is because of high crime committed by a small number of people, that seems different than “well there wasn’t enough demand.”
All this stuff is in the context of why and how it's being discussed. The way I've usually heard about food deserts implies that businesses are racist or classist or something, which leaves out all the other things we've discussed: crime, consumer tastes, consumer disposable incomes.
One of my last jobs was across the street from a half-built Target in East Hollywood that was being blocked from completion by NIMBY / "Environmentalists". That would have been an easier place for me to get food and I'm sure would have benefited many other locals even more. I think you're from LA so you're probably at least a little familiar with how low income much of that neighborhood is.
So tl;dr, NIMBY plays a part, too, and I agree crime is a different angle, so I wish the people promoting awareness of food deserts would also bring that up more.
You are absolutely right. Populism is a cancer, and people are so desperate for solutions that they are willing to listen to anyone who gives them a simple answer to complex problems and just lies to them. And then when the person frames the solution in a way that means that there are no downsides people just flock to them. In this instance though, I think Zellnor or Lander would've been way better picks for Mayor, but people really coalesced around Mamdani because he seemed to have the best shot to beat Cuomo. Or at least that's what I'm being told by friends and family who are still in NYC.
This is especially important with the aging of society. As the number of pensioners* relative to workers increases, existing programs will become more challenging to finance. Barring some huge shift in public opinion or economic transformation, I can't see any major new programs being viable and am worried about the viability of existing programs. From my perspective none of the developed countries are taking this seriously enough and the mass public never gets it.
*The US likes to pretend that social security and medicare are entirely different from other pension schemes, but at their core they're transfers to the old from the young paid with tax dollars.
To keep Social Security solvent, how many people would choose higher immigration over tax increases or benefit cuts? If it is a pyramid scheme as some say, then one way to keep it going is to add more people to the base level.
I think the average voter would reject the tradeoff because they're innumerate and believe people who say that "cutting government waste" or "taxing billionaires" can make up the shortfall, but across developed countries the elite opinion is clearly immigration.
Yea, and all over the devloped world they're risking democracy itself because voters keep saying no. It's not a plausible solution.
I've always been a proponent of the 'universal' program concept but for these types of benefits it may be time for some degree of means testing or floating structure related to actual revenue collected. There also may be a strong case for uncapping contributions in the case of SS and/or just increasing them from the childless to mitigate against free riding.
Otherwise the only thing that might save us is the massive transfer of wealth coming when the boomers die. I know Republicans have made a lot of hay out of a 'death tax' but a levy on everything the boomers horded for themselves may be enough to base a fiscal reset around.
I don't disagree, but there isn't an alternative to risking/circumventing democracy when voters demand an incompatiable policy package. As long as voters demand https://pbs.twimg.com/media/GRJN42qXgAAjddz?format=png&name=900x900 coupled with little or no immigration, policymakers have to "violate democracy" by some combination of not providing services and transfers that voters demand, raising taxes, or bringing in immigrants.
“Human beings chafe under the demands of multiple languages, cultures, and styles of thought. They chafe more the lower their intelligence or education level. However, institutions that master the challenge of incorporating diversity produce measurably stronger outcomes compared to culturally monolithic institutions. This is merely one example of the challenges facing a political system built on popular will.
What works in the emerging economic order is decentralized decision-making, diversity of thought, trade, fast cycles of innovation and failure, and choices based on scientifically-derived data rather than human intellect, emotion or instinct.
What’s popular is a monolithic dominant culture, stability, restraints on trade to protect favored cultural interests, economic policies premised on perceived fairness rather than profit or success, and authoritarian politics. This list of popular policies was not far removed from optimal strategies in an industrial society. In a data-driven economy, these priorities are more than just sub-optimal, they can turn catastrophic.”
When I read this article it always reminds me of the incoherence of the old phrase "you can having open borders or strong safety net." No, in fact without a native born population above replacement, you need a lot of immigrants to pay into the system to support the aging population, medical care and all the others goodies that people expect. As unpopular as illegal immigration is, it's a great deal for Americans since they pay into Social Security Medicare/Medicaid and other taxes and get either nothing or very little back compared to legal immigrants, permanent residents and naturalized and native-born citizens.
Or, more simply, are we really going to still be jabbering about the fundamentals while skimming the headlines of a G7 meeting attended by JD Vance, Marine Le Pen, Alice Weidel, and Nigel Farage.
Yea and to be clear a time may come where it is a more palatable part of the solution. Where I'd focus is high 'bang for buck' immigrants who are high earners rather than large numbers of low wage workers from the developing world. The latter has been a disaster.
"Where I'd focus is high 'bang for buck' immigrants who are high earners"
Yep. And it can't be emphasized enough how badly US immigration policy fails at bringing in these people.
The US could easily make immigration much more politically palatable AND economically beneficial at the same time. It just chooses not to because a lot of elite types seem to see immigration as more of a charity program for poor countries than a way to benefit the US. They only seem to care about the latter when trying to sell immigration to skeptical people. Or maybe I should be more cynical and say these people prefer low skill immigrantion because it competes less directly with their own labor. I don't know.
The other solution is these programs have to be paired back, but the older generation and young people don't want to hear the truth unfortunately. It takes people who are honestly interested in solving the problem and unfortunately both the far left and far right live in delulu land.
Most people aren't that good at math, but honestly this has more to do with the difference between individuals and collectives. Every individual voter can realize that you can't balance the budget, lower taxes, and increase spending, and yet the election-winning strategy can be to campaign on balancing the budget while lowering taxes and raising spending.
We could just empower Americans to select their own healthcare treatment, within reason and with appropriate safeguards and subsidization, via cutting out the middle men of rent seeking healthcare service providers and admin overhead. Could use Gen AI for user friendly chat interfaces, but even 90s era internet software or digitally-read paper forms would work fine for automation.
There can be mandatory requirements for continuing coverage, including annual check ups and vaccination, all paid for by the federal government. Other services can be locked behind education, tasks, and chores. Eg, showing up for blood draws, attending an educational seminar--in person or virtual, completing a informed-care screening, demonstrate 10lb of weight loss in a year, pass monthly drug screening for 6 months, etc.
For most of us this will just be DYI death panels because we Americans are ignorant and lazy. Moreover, many of us will use our own time and money for alternative treatment programs, thereby bypassing federal safeguards. But at least we can reduce medical and SS costs without the fear of big government, or alternatively, big business. We can even cut out tons of rent seeking from private practices and special interests of the AMA; at least from the perspective of federal funding.
"There can be mandatory requirements for continuing coverage, including annual check ups and vaccination, all paid for by the federal government. Other services can be locked behind education, tasks, and chores. Eg, showing up for blood draws, attending an educational seminar--in person or virtual, completing a informed-care screening, demonstrate 10lb of weight loss in a year, pass monthly drug screening for 6 months, etc."
Also
"... without the fear of big government..."
What do you think State controlled healthcare but only if you eat your mandatory broccoli is?
I think this essay neglects one thing about social programs and the taxation that funds them: the demand for social programs (and acceptance of taxation) is *fungible.*
You mentioned this indirectly: the Chicago voter who (with some justification) doesn’t think their government will be a good steward of marginal fiscal take.
But what about the opposite of that: when things work well, people don’t mind paying for them as much. The obvious example is… literally every other developed country in the world where taxation funds universal programs like publicly delivered, funded, and/or subsidized universal healthcare.
So, when “taxes are hard” that’s because people don’t see the value of what they buy. And that’s because so many of those things are *too progressive* insofar as you have means-tested services (for the poor) which aren’t very good paid for by the people with more money who don’t use them. Do you see much of anyone advocating for negating that pre-WWII tax expansion in exchange for no Social Security and Medicare? No! Those social services are universal, essential, and generally well-liked. They also cost a lot of money in taxes, money that we are implicitly OK with paying.
But free buses? That feel unsafe, don’t run on time, and take forever? No thank you.
How about universal pre-K? Well, now we’re talkin! Public education, as long as it’s actually decent—which it isn’t in DC—is politically uncontroversial. Universal childcare? Well… maybe! Depends on whether it’s a demand-side subsidy boondoggle or a supply-side solution building out pre-K and public afterschool programs. Unlike in DC, upper middle class families in Maryland and Virginia are more than happy to fund their public school systems because they are actually good and not “just for poor people.” Any universal pre-K or childcare programs would be judged on the same basis and that would determine the openness to taxes to fund them.
"Those social services are universal, essential, and generally well-liked. They also cost a lot of money in taxes, money that we are implicitly OK with paying."
Except that we're not, because we don't. (We don't nearly pay enough in taxes to fully fund Social Security or Medicare.)
No one has taken the L on this but in retrospect GWB was totally right about privitizing social security. The S&P500 is like 5x higher than it was in 2005.
The L to be taken is that the program as structured was moral hazard in a can. Either we accepted that a bunch of people with highly variable levels of investment experience were going to predictably fuck up their investments and need rescue in old age, or we need to ask ourselves why the government wasn’t just buying $VOO directly instead of delegating that decision to individuals of whom the poorest would end up being bailed out as a matter of political reality.
Buying T-Bills is dumb from a returns perspective—we agree on that—but complete privatization for a program whose essential purpose is destitution-prevention seems like it was also dumb.
LOL. I hate to bring up the whole "index fund vs. whole life" debate again...
... but this is why whole life AND other forms of mutual funds exist.
As you may already know, a balanced investment strategy involves using a mix of T-bills and other low-risk instruments to stabilize a portfolio's value. That then gives you the freedom to invest in a mix riskier companies with higher upside than an index fund.
And of course, when you have someone doing that investing for you, they have to get paid. The rate of pay and how appropriate or scandalous it is, is always up for debate, and of course there's always room for automation and other improvements and innovations for efficiency...
... but this is why that stuff exists. "Just do index funds, bro" may often be correct, but it's also a really dumb and ignorant meme popularized by tech bros who don't understand finance but think they know everything. Just saying.
I actually first heard “just buy index funds” from my financial engineering classmates who now work in finance, who I’m pretty sure do understand finance. And if you find yourself outperforming the market by investing in stocks with higher upside than index funds and you aren’t in finance then you’re potentially in the wrong line of work.
They may have repeated the meme, but is that the only thing they spend their work hours doing? Is it the only thing they invest their own money in? I'd bet not.
It's a heuristic, not a universal truth. The tech bros took it and preached it as the latter, though.
Social Security is a program designed to grant retirees neat vacations to the Maldives. It is not designed primarily to keep old people from visibly starving in the gutter.
I think this is bad, and that's why I oppose the Bush reforms, which CBO said would cost slightly more than baseline SocSec until 2060. We shouldn't have the government run a stock index for us, we should just have an anti-poverty flat SocSec and save the rest ourselves.
For retirees I agree with you but the real reason not to is from a corporate governance perspective. Not that Blackrock and Vanguard are the best stewards of their shareholder vote but at least they broadly turn over decision making to the professional managerial class. If those decisions were handled either democratically (vote for lower CEO pay!) or via crony capitalism (CEOs named through a process similar to how the ambassador to Finland is) it would be a disaster.
We know from the 401K program that a huge amount of money gets captured by financial services sector that has no fiduciary responsibility to give the savers good advice. Also, there's a major spread in knowledge and risk-tolerance and we cannot expect 340 million Americans to be their own financial planner without exactly what you see in the 401K program: huge inequality of outcomes and a lot of normie savers getting bilked.
Now, if you wanted to apply a technocratic solution to it and just say that everyone in America gets 25% of their retirement pot invested in low-cost index funds by the Social Security Administration, I'm fine with that! It's an option to flexibly" invest a minority of your state pension in state-mediated, certified equity funds in many developed countries (with plenty of public-interest guidance). But that's absolutely not what GWB was suggesting.
We would be much better off with Australia's superannuation scheme, but our existing track record with 401ks and the like makes me suspicious that we would let people raid their retirement funds too much to make the system work.
Every month millions of Americans put hundreds of dollars into these, which buys up the major indexes, which drives up stock prices, which increases demand for labor, which means more people putting more money into 401ks, and so on.
Everyone benefitting when line goes up really is good for everyone.
It’s kind of a Ponzi scheme now but this would have better returns than T-bills. One thing that would help is keeping it so you can’t just take out as much as you want; the withdrawals would be predictable.
Privitizing Social Security was always half-baked. While new entrants into the workforce would have their private investment accounts, everyone else had already paid into the existing system, and nobody found a way around paying for two different retirement systems for decades
If the S&P500 can solve our problems, why not just go all in? The rate of return is much better than the interest rate on government debt, so why not just buy a bunch of shares on credit and use the proceeds to fund social security
The rate of return would plausibly decline if trillions & trillions of dollars were invested by the US government every decade. Norway famously invests their wealth fund in stocks and they own 1.5% of *all publicly traded stocks globally*- literally every stock on the planet. Coincidentally their economy is about 1% the size of America's. So if you 100x that.....
You can't dump infinite money into the stock market and keep getting 10% average returns every year. There's a reason actually successful hedge funds like the Renaissance Medallion Fund don't allow outside investment
Ultimately, isn't the amount we can pay out in retirement funds limited by the productive capacity of the economy and the labor contributed by the workforce? That is, by how much the economy grows?
Maybe I'm dim, but at the scale we're talking about here, it always sounded to me like One Weird Trick to pay for socialized retirement.
We don't. But, by that measure, we don't pay nearly enough in taxes to fund anything federal, since the government is in chronic, generational deficit.
My point is that *directionally* people are fine with paying the line-items in their paychecks that go toward Medicare and Social Security. And when you touch that political third rail, it is always painful.
Now, if you want to argue that the *degree* of (extra) taxation matters at least as much as the question of tax/no-tax, I don't disagree. You would have to modestly increase payroll taxes from about 12.4% to just under 16% to really robustly fund SS for the long term, with the employee's share being half of that (~8%). That's not nothing. But I also doubt that people would mince hairs over paying $1K a year out of their $75K gross to ensure a inflation-safe annuity for their entire lifespan.
This also disregards entirely the fruitful question of how to change the SS payout to make it work just fine within the current fiscal take. The retirement age is probably too low. The income cap on tax is almost certainly too low (a change that wouldn't be in-your-face but would very much track with the Democratic tendency to raise taxes on the rich). You could also make SS less progressive in various ways, which might be the Trumpian tendency.
Medicare is a similar story, but less. We're probably talking a modest payroll tax increase that would account for a few hundred dollars a year per middle-class taxpayer. Considering the cost of private healthcare, that is nothing.
In general, you're getting a HUGE bang for your buck with these tax-funded, universal, popular programs. You cannot say that about a lot of other welfare state spending in the US, which is WAY too complicated, administratively burdensome, means-tested, and privy to all sorts of rent-seeking and fraud among the various private and non-profit intermediaries who are involved in so much of it.
I would be fine with eliminating the cap on SSI taxes if they also closed loopholes that let the rich not pay it at all.
I would support this even if it hurts me personally; my wife and I get a few paychecks that are bigger at the end of the year after we hit the SS cap, which is a nice bonus, but I’d give it up to have SS still solvent when I retire.
You changed your argument at the end here. You started by arguing that people are willing to pay taxes for broadly beneficial programs (not so sure about that, since they're significantly underfunded, as we've both been discussing, and there's no serious discussion on the table about how to make Social Security and Medicare solvent). You ended by saying how worthwhile these programs are ("...you're getting a HUGE bang for your buck..."), which is not the issue at hand.
Is it underfunded? The Trust Fund is solvent for about another ten years. That, combined with current contributions, covers all demands. You can say under current law, it's not completely solvent after around 2035, but current law does not predict future law.
Yes it's clearly underfunded. Current receipts aren't enough to pay for current outlays. Even if you believe in the fiction of a Social Security "trust fund" (as if "investing" in a loan to oneself can really be considered an investment), this is clearly not how the program was envisioned or how any rational program would be designed.
When my Social Security withholding went up in the 1980s, I can definitely assure you that that wasn't a "fiction." And now the fund is paying out the accumulated surpluses working stiffs like me paid for decades, and all current payouts come from contributions to Social Security. So *currently* in terms of meeting its payout demands, Social Security is *not* underfunded. What we'll have to do to keep that going after 2035 remains to be determined.
“Some justification”. The majority of our governors went to prison. One - a Democratic one!! - during his term because he was on the verge of selling Obama’s Senate seat. The “Big Machine” - again Democrats, led by a criminal - have fucked our state finances for 40 years. I voted against Pritzker’s bill and also for Biden because (1) fuck Trump but (2) fuck Pritzker. There’s one path forward in IL … break the pensions.
You'll get no argument from me that Chicago is a very well-run city or that Illinois is a well-run state. Or that the local Democratic machine is lacking in corruption.
But, despite all that, residents of Illinois and Chicago enjoy far better social services than residents of Red States (like Indiana or Missouri, right next door, for example). So even a corrupt, criminal Democratic machine can deliver (relatively) better outcomes for citizens.
And there are things that Chicago and Illinois do especially well in, despite that low-quality governance, and they are universal services like:
-Its excellent K-12 and higher education system.
-A universal healthcare system in Cook County, facilitated by a well-run Medicaid expansion.
-CTA public transit, which exceeds an admittedly very low bar for metro transit in the United States.
-Parks and libraries, some of the unsung heroes among the universal social services.
If you compare these universal services to more means-tested ones, Chicago and Illinois are a case-study in how such services are more efficient and resistant to corruption.
My impression is that Chicago K-12 schools are not very good while being well-funded. The Illinois higher-education system seems to be very good, I agree.
In 2023 I found this statistic: "Nearly half of Chicago Public Schools students missed at least 18 days of school last year. Just one-fifth of high school students are reading and completing math at grade level. Yet CPS celebrated a record-high graduation rate."
Yeah, free buses are clearly going to be strictly worse because, while almost nobody is actually burdened by paying current fares, people that a lot of people don't want to be next to are going to camp out on them.
“ literally every other developed country in the world where taxation funds universal programs like publicly delivered, funded, and/or subsidized universal healthcare.”
Thats what we have in America. Or do you think the German government pays the average persons health insurance premiums?
"But what about the opposite of that: when things work well, people don’t mind paying for them as much." I was thinking something similar, and wondered how much the fact such a large % of federal taxes go to the military are a factor in Americans' unwillingness to pay more taxes. Possibly not a super original observation - but it does seem like, although Americans approve of having a strong military in concept, the reality is, it means a large portion of the taxes coming out of our paychecks don't improve our day-to-day existence in any obvious, direct way.
Unless I am missing something, this concept is addressed at some length in the article you are commenting under. Military spending is at a historic low and has been trending downward since my boomer parents were in short pants.
I don’t know if your average citizen *feels* like military spending relative to tax revenue has been on a downward trend. One reason might be that military spending can be highly visible - there go our missiles getting dropped on Russian outposts, or whatever. And along with SS and Medicare, military spending is still one of the big chunks of the federal spending pie, which is often covered by the media. So even if factually military spending is decreasing and has been for awhile, people may still *feel* like it’s a lot of money for no direct gain to them personally.
I can speak for myself: A little over 10 years ago, I moved to the EU. First to Ireland and then to Sweden. Since that time, I've paid higher taxes than I did in the United States (but not by nearly as much as you'd think!). Do I mind? Nope!
The ROI for my taxation in both countries (but especially in Sweden, especially as a young family) is just so favorable that I can't complain at all. Before I moved to Sweden, I did what I usually do before a major life-change and ran my spreadsheets. I found that my life scenario in the US vs. Ireland vs. Sweden wasn't even close: there was a $50K upside to living in the latter over the former! And that's *with* lower income and higher taxation. And, indeed, I've lived here for years now and that's borne out. My situation is affected by the fact that I earn a higher salary than most Swedes (but also pay a higher tax rate), have a 5YO, and have a wife with a chronic healthcare condition (T1D) so your mileage will vary. But I share my own example to show how a higher-tax/better-services paradigm can feel. Even the Conservatives here don't seriously talk about scaling back the welfare state or cutting taxes by more than a little bit because it all is just so self-evident when it's actually working.
Is the example transferrable to the United States? Well, I have a Joe Rogan-listening, Libertarian-leaning brother who lives in Los Angeles, California. He also pays higher tax rate than your average American. But he also gets back public healthcare for it, as a resident of one of the precious few states that offers it. He's definitely no Social Democrat, but this allows him a level of security and freedom that helps him to thrive as a creative, sole proprietor, and jack-of-all trades. If he lived in Texas (as he's often considered doing), he'd be off the public healthcare and would have to fund his own FAR more expensively. That factor alone would more than negate any tax savings. My brother likes to "do his thing" and he just couldn't do that in a lot of other places in the Untied States where you have to purchase everything you use privately and expensively. California can be a fever-dream of wasteful governance for Conservatives, but it's also a place where taxation buys you a lot of really valuable public goods, from amazing state parks to the best state university system in the country (and one of the best in the world) to the country's first universal paid family leave policy.
I'm not saying this stuff is equally valuable to everyone or that anyone should try to live in Sweden or California. But these are examples of where paying taxes can buy you social services that are valuable and would be far more expensive or impossible to purchase privately. And the cool thing about democracy is that then you get to decide what those things actually are: Maybe in another state (like Alaska), you go HUGE on K-12 education, instead, but don't care so much about public transit.
Great comment but I don't get all these people singing the praises of Sweden. They pay super high taxes and yet it's really dark for months of the year! I mean, what's up with that?
It’s true—we keep hearing from politicians that they’re going to fix this latitude-dependent solar declination with a special dedicated tax for large mirrors and the like, but their promises ring hollow and winter remains frustratingly dark!
I enjoyed your funny response, but here's a pro tip from a total amateur. When I give you the straight line about the dark months saying "I mean, what's up with that?" your snappy response has to be, "Not the sun!"
Didn't the majority of Americans also think that the government was also spending 25% of tax dollars in foreign aid? A lot of American's frankly have no idea where their tax dollars are going, but they do like the idea of having a safety net and strong military.
I think you are right, that people definitely don't want to pay more in taxes, but they want good outcomes. The cool thing about Social Security and Medicare is that people are very familiar with the programs and positive outcomes because someone in their friend of family group is most likely using the programs. The other stuff, not so much. We are also a huge consumption society, so if people are going to paying more in taxes but they don't have anything to show for it, they feel immediately against it imo.
If the University of Illinois was $120 a semester and Illinois was a sea of billiard table smooth roads - I think you’d have a lot less pushback. Big picture the middle class needs to feel like it’s getting value for money. It’s all well and good to focus on the poor but when you do that, to the exclusion of what’s good for the middle class, you get pushback.
And a lot of it is optics. Take the homeless population - you have a large number of transient homeless who are homeless an average of 3 days before finding accommodation. And then you have the chronic homeless who are homeless for year and who are also the most obvious to the public. If you sell an expensive program to “help the homeless” and you reduce the number of transient homeless by 50% but don’t reduce the number of chronic homeless the tax paying public feels swindled. You can’t be all bleeding heart in execution - you need to spend a fair bit of the money on addressing the issues of those who are paying the taxes.
Why shouldn’t the citizens of states with risks of fire/flood/wind/earthquake damage bear the costs? Maybe it woud focus the minds of state governments to make sure that people are insured for the risks they expose themselves to.
I look at natural hazard risks like social insurance. We want mechanisms to transfer consumption from not-in-circumstance to in-circumstance people. The difference is that there is “moral hazard” in placing vulnerable assets and lives in certain places. There is a further complicating factor in that climate change has made backward-looking insurance premia inadequate. So people did not have the incentive to avoid “ placing vulnerable assets and lives in certain places.“
Still, I think it would be better at the state level.
Hazard insurance purchased would not be “consumption” the progressive consumption tax. :)
I wish Matt had engaged a bit more critically with the Illinois examples** he started with (though I'm biased, because I live in Illinois). I think the critical question is:
"How do you square the Illinois results with the fact that, in the same election cycle, Arizona amended its constitution to provide for a hefty progressive tax, via Proposition 208?"*
Obviously the answer is not that Arizona is more blue than Illinois; Biden got 49.36% of the vote and Prop 208 got 51.75% of the vote. There are, I contend, four differences between what I'll call "Prop 208" and Illinois's "Fair Tax" that explain the difference:
1) Codification of the Tax Brackets/Rates
Prop 208 explicitly amended the AZ constitution to say that there would be a 3.50% income tax on incomes over $250k (single)/$500k (joint). The Fair Tax did not codify any brackets or rates, and instead empowered the legislature to freely change the brackets/rates as they pleased. At the same time, the IL General Assembly passed a law that would have gone into effect if the Fair Tax had passed, creating the brackets/rates. That law ("SB 687") very slightly decreased the tax rate on income under $100k, and greatly increased the tax rate on income above $250k. The structural difference, of course, is that the General Assembly could have freely changed those rates whenever they wanted, without going back to voters for a constitutional amendment.
2) The Marriage Penalty
For reasons I still do not understand, SB 687 did not contain different tax rates for joint filers vs. single filers. I do not know if this was common knowledge in 2020 in Illinois, but the effect of the Fair Tax/SB 687 would have been to highly penalize higher-income married couples. Prop 208 explicitly contains different limits for joint filers vs. single filers.
3) The Purpose of the Taxes
Prop 208, by its language, explicitly restricted the tax increases to "teacher and classroom support staff salaries, teacher mentoring and retention programs, career and technical education programs, and the Arizona Teachers Academy." I think it is worth being skeptical of lockboxes like this (won't the legislature just take the money that would have gone to education and spend it elsewhere?), but I think this stuff works for voters, and Illinois did not even pretend to have any limitation anywhere.
4) "Trust"
This is the squishiest and worst point here, because I do not know very much about Arizona politics, but I highly suspect that Arizona voters, correctly, trust their elected officials more than Illinois voters do. It matters--or at least, it should--that the governor of Illinois warned that spending cuts, or an increase in the flat tax, would be inevitable if the Fair Tax failed, and then five years later those outcomes have not occurred (and, in fact, Pritzker has been pretty gung-ho about measures that cut revenue, like getting rid of the 1% statewide grocery tax and not increasing the flat income tax).
*put aside that Arizona's Prop 208 was later struck down by the courts
**also, I don't want to make this a whole point, but non-binding referenda like Matt's second example should not be taken seriously and should be made illegal in the United States.
Speaking as a Biden (never Trump) / no crossover from IL, my rationale was they were willing to amend the constitution to tax me more, but were not willing to amend the constitution to modify the run-away pension plans. Had they put both initiatives on the ballot, I would’ve been more willing to consider the more progressive rate.
I continue to wish that taxes were like interest rates: treating in a boring manner where we adjust the rate up or down depending on how much money should be circulating, and how many nice public provisions we want or not. Instead it always devolves into nasty debates over whose and what oxen get gored more or less.
>Means-testing tends to create a lot of political anxiety about deserving versus undeserving poor, whereas nobody seems to think we need work requirements to visit a public park
I think that is possible to raise taxes without huge resistance if the government is doing a good job. Here in Madison, a referendum passed last year to increase city property taxes [1]. There were a lot of components to this (threats to cut city services if it didn't pass, the fact that it mostly was just keeping up with inflation, and Madison being Madison), but I think that a big reason it passed is that the city is well run.
For example, a couple years ago, a (city-owned) tree in front of my house had a branch crack in the wind, and it hung like the sword of Damocles above my neighbor's car. I called the city forestry department, and a city arborist with a chainsaw and a bucket truck was on the scene 25 minutes later. In fact, I've only had good interactions with city services (except for parking enforcement, who I wish slacked off more). That's the type of government I'm willing to pay more for.
That chart that breaks down impact by income decile reminds me that the Dems are a bit unclear on who they are/want to advocate for.
Are they a base of 80-100 decile voters looking to help 0-30 decile people and willing to piss off 30-70 decile people (the “not rich but make too much to get benefits group)? There’s no right answer, but clarity in priorities would go a long way.
Right, despite rhetoric against the top 1%, the party really seems to be run by the next 19%, the educated professional class. And we are awesome people - high-fives all around!
And yet for all that, the electorate is still basically split 50/50 with power shifting back and forth between the parties. (Though the Senate is admittedly a tough problem.)
I mean, it’s both? I want to help the poor in need AND I want taxpayer-funded things that are helpful to the middle class (like excellent public education and affordable childcare and elder care) AND I personally am fine with paying high taxes for all this. “Taxes are the price we pay for civilization” -Oliver Wendell Holmes
The problem for individuals in higher relative tax jurisdictions like DC is the apparent inefficiency of current spending and the lack of confidence that higher taxes will produce much marginal benefit for said taxpayers. DC recently wrestled with a dumb, forced budget cut arising out of the GOP's continuing resolution, but the local political leaders acted like finding $400m in one year reductions in an $11.7b budget (excluding capital expenditures) was tantamount to murder. Between the long-term economic restructuring associated with the federal workforce downsizing and reconciliation changes to Medicaid and SNAP in the OBBB, DC is facing a leaner structural budget environment for years to come - zero confidence they'll meet this challenge with grace and prioritize the truly beneficial programs while cutting the waste.
In 2022 in Massachusetts the "Millionaire's Tax" won 52-48 while Maura Healey took the governor's office with over 64% of the vote. The gap on the tax shrunk late in the race when the "no" campaign focused on how many residents were actually at or around the $1m number (which included one-time events like home sales). A more progressive approach to the tax (first five hundred thousand over $1m at 1% . . ." probably wins easier.
But they are making a million the year they sell a house.
That's the problem with convincing people - a lot of people have a million-dollar house (or have parents or grandparents that do) and don't think of themselves as "rich". After all, they can't *spend* the house, they have to live in it.
It's four percent and the sale of a house only counts the appreciation since prior sale with an additional $500,000 carve out on your primary residence. So, if you bought a house for $300k and sold it for $1.9 million. You would owe $4k (though actually probably not because sales costs are deductible).
Years ago, working at a small manufacturing company, I would sometimes spend time on miscellaneous, odds-and-ends tasks that couldn’t be charged to a particular project. So, what should I enter on my timecard? “Use the R&D account”. Yep, the one that qualifies the company for a tax credit.
The income tax, particularly as it applies to business income, is a perpetual game of “Whack-A-Mole”, with the IRS, at least in theory, making sure that the billions of daily transactions in a complex economy are properly categorized and reported on the hundreds of millions of personal and business tax returns that need to be filed each year.
What is “R&D”? What is a “legitimate” expense? Suppose I own a restaurant that serves a teriyaki chicken sandwich – well of course I need to travel to Hawaii every year to inspect the pineapple crop.
Don’t tax income, tax land. Replace the income tax with the Land Value Tax, also known as the “Single Tax” first proposed by 19th century journalist Henry George in his book “Progress and Poverty”. Land ownership is the primary source of unearned, unproductive inequality. If you got rich inventing that Better Mousetrap, then you earned it, keep your money. But that oceanfront view that makes your plot of land valuable – you didn’t build that! Taxing land simplifies not only the calculation of taxes owed but also enforcement - you can try to hide income, but you can’t hide land.
Business income should not be taxed. Period. Tax the owners' consumption when they consume it.
Sure, try a LVT. If it were worth doing cities and stats would be backing out the value of land improvements and taxing the "land." They are not for a reason; juice not worth the squeeze.
I was expecting a piece about Zohran Mamdani, but instead we got a piece about Zohran Mamdani.
I'm trying to be more optimistic these days, so I'm leaning into the benefits for my State as more people will be migrating to Florida in the coming years. More people will give us more representatives and, potentially, more non-socialist Democrats coming into the State.
Plus, it would be nice to have our very own Crown Heights neighborhood in, say, Miami or Jacksonville.
I’m incredibly skeptical anyone leaves the greatest city in North America to move to FL over the mayors race.
Based on current projections, Florida is expected to gain 4 seats in the 2030 reapportionment while New York will lose 2 seats. I predict that these changes will be even greater after Mamdani's tenure as Mayor.
Surely that’s for general warmer weather / cheaper housing reasons plus retirees who no longer benefit from NYCs job market. People talk a big game about moving for political reasons but moving is hard!
I think the political reasons manifest indirectly. When costs are high and escalating and quality of life is falling, in part owing to poor leadership, people with options might choose to leave.
This was my own NYC exit trajectory.
But the shitty bus--now it's a FREE shitty bus!
That was my family's exit trajectory as well! *high-five*
Maybe - seeing how his policies turn out first is one thing, deciding to move before the impacts are clear is another
The idea that people would be leaving 100-degree-in-June NYC for warmer weather continues to be baffling to me.
Right - who is clamoring for more humidity?? Have childless friends who pull off a couple of remote months in FL in the winter, that seems nice
It never gets to 100 in Miami.
There's like 6 months out of the year where the climate in northern states is cold mud.
I dunno, my parents, grandparents, and sister fled suburban Atlanta, Georgia in 2021 because they were terrified of BLM and of a potential Stacy Abrams governorship. Well, really, my parents initiated the move for clearly political/ideological reasons and then the rest of my family followed them in about a three month window. Some people definitely move for political reasons even if the likelihood of those outcomes (GA going fully racial reconciliation left) are low.
Wow, that seems incredibly premature. Just checking polling, Kemp was the favorite for the entire race. Where did they go?
That seems like an overreaction to GA politics. I feel obliged to point out it that on the state level GA is still solid red
I tend to think that your family likely moved for economic and social reasons - but falsely claiming that it for political reasons makes for good conversation pieces amongst other conservatives.
Nothing signals "I'm a strong gritty Clint Eastwood-type conservative" more than "I moved from the big city to this here small town because I couldn't take any more of the libs and their woke socialism!"
And then Stacy Abrams loses - if they were telling the truth they would have moved back!
White flight is a real thing
What did they think Abrams might do that would lead to such a momentous choice as tearing up your life and moving to someplace entirely new?
Anecdotally I know young people who leave for Florida or Seattle. Generally it's the FIRE crowd who are making shorter term financial tradeoffs.
People *do* respond to incentives.
People leave NYC all the time! Usually because housing is expensive, not because of who is mayor
One cursed thing about American politics is that conservatives don't realize why people are leaving blue states.
It is partly weather and partly blue states refusal to build housing. Instead conservatives pretend it is taxes, sigh.
I don't think that's what John is implying. I think he means that Mamdani's policies will lead to outcomes people dislike, prompting them to move, not that they move because of the mayor directly. John can defend himself though.
If you raise taxes, reduce policing, ignore homeless encampments, practice and embolden NIMBY policies for spurrious environmental purposes or to prevent the dreaded "gentrification", then people are going to move for sure because it makes economic sense for them to do so (cheaper housing, safer streets, etc).
So in that sense poor liberal/left governance does indirectly lead to white flight. But these things can still theoretically happen with centrist or conservative governance as well.
But no one directly makes the decision to move because so-and-so was elected mayor or governor. Maybe the occasional ultra-rich eccentric like Rosie O' Donnell might do this, but my bet is she was already thinking about moving beforehand.
Yeah, I think few people move because they hate the governor or mayor, but a lot of people move because they can't afford a house or they keep getting mugged or the local schools are terrible and they can't afford private school for their kids. And that's secondary to the choice of mayors/governors/etc. over many decades.
Counter point: https://www.reuters.com/business/hedge-fund-citadel-move-headquarters-miami-chicago-2022-06-23/
Yeah citadel has moved a ton of people from Chicago to… NYC
I mean ... define "a ton". What % moved to NYC? All the portfolio managers I know were forced to move to Miami and the one support leader I know who's still here will eventually have a go / no-go to relocate to Miami.
Forced? They seem pretty happy here.
I love Chicago! But it’s not NYC
True, it's got world class museums and restaurants, but is a lot cleaner and cheaper.
If anyone is looking for a discount version of Chicago, we here in Cleveland will welcome you with our great museum, world-class orchestra, low cost of living, weird and scrappy arts/music community, and requisite moribund local politicians. But our corruption is very much small potatoes these days, and the beaches are finally clean.
And deep, deep segregation and corruption. Also, terrible schools. And a beautiful lake and cheaper housing. Pluses and minuses.
This guy gets it!
Interesting. I was at the now Griffin Museum of Science and Industry in November. I was talking to a gift shop employee about postcards. They didn't have any yet due to the name change. She said that gift shop sales and museum membership had decreased a lot since adding Griffin's name to the museum. Maybe in a few years Chicagoans will forget who he is
Maybe. The Daley's who loomed so large for so many years even now rarely come up. But there's no doubt our city and state are far worse off that Citadel left. It's a shame.
Yeah, not the race itself. But the outcome of implemented policy? For sure.
Government grocery stores is a truly dumb populist idea. The US has great private grocery stores. I’d love to hear someone make the case for private grocery stores. I am at a loss for how this adds to the general welfare of the City.
Republicans can run on this. Democrats want to take away your grocery store and replace it with government run stores like in communist countries.
“the greatest city in North America”
It’s the greatest city in the world, but whatever.
The list of reasons for New Yorkers to decamp to Florida is long and includes, among other things, no state income tax, more freedom, no snow, and lower housing costs.
Baltimore?
True. The suburbs are a lot closer.
People who weren’t already going to move to the suburbs are going to make a dramatic lifestyle change because of the mayor? Doubtful!
Less dramatic than moving to FL.
Unfortunately, Florida's astronomical crime rate makes that unlikely.
Crime in most places is pretty concentrated though. If you live in a nice suburb anywhere in the US, the crime rate is likely very low.
This is something people don't always appreciate. The crime rate in the South in general is really high.
100% agreed, I feel more unsafe in Savannah or Tampa after midnight than I did in Manhattan or Jersey City... Gun violence and drunk driving are legit issues in the south.
https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_violent_crime_rate
If you sort that list by violent crime rate, lowest to highest, Florida is 13th.
The murder rate in Miami is over 3x what it is in NYC.
Now you’ve moved the goalpost to Miami?
NY State has a murder rate of 4.5 per 100,000 as compared to Florida's 7.2 in 2022. I would suggest Florida is either massively underreporting violent crime or violent crime there is especially deadly, either of which strikes me as a massive quality of life downgrade.
> Plus, it would be nice to have our very own Crown Heights neighborhood in, say, Miami or Jacksonville.
I have to imagine that would be wildly improbably due to rampant car dependency in Fl, if not literally illegal due to zoning.
My wife was reading this news last night and worrying about costs going up.
It makes me wonder if there are snowbird studies. My default presumption is internal migration is good for Floridians over the long term.
While I don’t have anything on hand to link, iirc the biggest factor is housing costs followed by cost of living more generally. Housing in much of FL is cheaper than NYC but the gap has narrowed in recent years as other costs have risen. That, and how many New Yorkers are moving to smaller cheaper more Southern culture panhandle towns vs the more expensive Miami, Tampa, and Atlantic coast areas?
Even the midsized cities in Florida saw a pretty notable New Yorker bump in the pandemic. Like the cities vaguely looped in with Orlando and Tampa did.
I’m sure it didn’t effect the counties with 50,000 people in them but it was notable in say Saint Cloud or Sanford which are in Orlando only In that the touristy amenities are usable.
Afaik the inland cities like Lakeland also gained a lot of population. Sometimes I wonder how much of Florida’s economy is sustained by pensions paid out from blue states to their retirees in Florida. That would be interesting to know.
I’ve seen some scary sounding predictions regarding New York City taxation, but have not really looked into the details. Does a NYC mayor need the permission of the state government to raise taxes?
In general yes. NYC is remarkably constrained in what it can actually do without state approval. The MTA is run by the state and there are even pretty strict state rules around speed limits, etc.
More than other big cities in other states?
My understanding is yes but I'm not an expert in such matters or very familiar with bureaucracies in other large cities
NYC’s mayor is pretty much limited to executive functions, but those powers can be quite broad. For instance, the mayor appoints major department heads (Police Commissioner, Schools Chancellor, etc.) without needing to get the agreement of the city council or anyone else. The mayor cannot raise taxes or appropriate money in any other way without the city council’s ok, or, in many cases, without state action.
The free bus footnote mentions crowding but fails to mention crime/disorder. On average, people who are unable/unwilling to pay the bus fare are more likely to be disorderly or commit violence. Causality is hard, but it seems likely that an increase in fare enforcement was part of why crime on the subway has gone down.
I am guessing that the biggest barrier to taxing the wealthiest among us is that politicians rely on wealthy donors to get into office in the first place. After all, the top 1% of income earners only make up 1% of the population. It's not their literal votes that are the problem.
This is a much smaller problem if your campaign rejects donations from super PACs.
I don't want to be taxed more. But I want the ultra wealthy and the pretty-darn-wealthy to be taxed more. I don't care if they already pay a ton in taxes. Pay more. They have too much stuff and I don't have enough. Cough it up.
No taxes on tips is a canary in a coal mine. In a time where literally everyone seems frustrated at the
Proliferation of tip screens. How can’t people say no to this thing which will prefer tipped income and cause those screens to be put everywhere.
It also just seems incredibly cheater friendly. Required tips are a thing right? It just seems so straightforwardly ludicrous.
It really is important to understand "no tax on tips" is a restoration of a status quo. Despite the morally condemnatory language of "cheating", there are lots of forms of income that are technically taxable but which the American public never particularly demanded tax enforcement on. Cash tips were one example-- so were various forms of cash payments among friends, winnings on home poker games and informal betting pools, payments for lap dances at the strip club, etc. Nobody ever reported this stuff, the IRS did not go to great lengths to detect it, etc. And if you had gone into a public debate and screamed about how terrible it is that people don't pay taxes on the $1500 they won from their friends in a poker game and the IRS had to engage in surveillance and catch these people, the public would have found that very strange.
Technology shifted tips from something in that category to something that is much more easily tracked. This resulted in a de facto tax increase for tons of Americans. And I don't think that it's any wonder that "no tax on tips" is popular-- there was never any groundswell of support for taxing this in the first place, it wasn't taxed at anywhere near the actual amount of income for generations, and nobody was upset at it or thought the people underreporting it were contemptible "cheaters". "No tax on tips" is just a way to restore a status quo everyone thought was fine.
This seems backwards. We didn't collect taxes on tips because the effort to collect them was difficult and mostly not cost effective. It wasn't because there was some inherent goodness to getting paid in tips vs. getting a higher set wage. Similar reasons why we used to fund the government with tariffs instead of income taxes, but once we had the technology to do the latter we did that because its much better.
Your second sentence is correct. So now applying the changing technology to collect tax on tips is a tax increase that almost nobody actually cared about or was calling for.
So it is understandable that the public reacts to this by saying "we never asked for this tax increase, repeal it".
I find the argument "doing crime is fine" unappealing.
I find the argument equating people not paying taxes on sources of income traditionally not worried about it with serious criminals to be absolutely outrageous. Similar to what the Right does when they call people "criminals" for crossing the border without inspection.
We never have had 100% law enforcement in this country, we never will, and hopefully we never try, because only a totalitarian society can achieve it. Some violations of the law are functionally harmless.
First, I called it crime. Nothing in that has the word serious. Secondly, this seems like an untenable position. Do you think shoplifting isn’t bad? Taxes in particular are very reliant on voluntary individual compliance.
I’m not out here arguing that people are vicious criminals when they don’t pay taxes on everything they sell on Craigslist, but it would be weird for someone to argue that there shouldn’t be tax on something like eBay because it’s a peer to peer transaction.
Tips don’t deserve to get treated as a special type of income. Cheating on your taxes is bad, so the argument that lots of people have broken the law so it shouldn’t be a law isn’t one I have much respect for.
"the public reacts to this by saying "we never asked for this tax increase, repeal it"."
The "public isn't calling for this tax to be repealed. People who get tips are. And a big issue is that the same increase in technology that has enabled taxing of tips has spread tips dramatically further than they used to be.
No tax on tips is popular.
Really I wish liberals who hold highly elite views should stop assuming the public agrees with them. In fact the great and good American people want this new tax repealed and the previous status quo restored, and they should prevail.
Come on Dilan, this is silly. The public wants ALL taxes decreased except for disfavored groups. But tell the American public that to remove taxes on tips and regular income taxes have to go up 2%, and I'm betting that popularity crashes.
I will also note that taxes on low wage earners have actually gone down substantially over the last 30 years. Compare tax rates from 1995 to 2025!
Re: "Technology shifted tips from something in that category to something that is much more easily tracked." But technology *also* shifted tips to something that is much more ubiquitous.
Not really. Yes, there's more tipping now, but not as much more as elites portray. There was actually always a tip jar at Starbucks, You could always tip your dog groomer if you wanted to.
Elites perceive this as much more of a change than it is because they patronize more of the businesses where tipping is now shoved in front of their face.
I think it's the fact that as Stripe and similar things started showing up in non-food businesses, you would start seeing a tip screen by default at a place that never had a history of tipping. Plus, you had places setting the default tip options to things like 22%, 25%, or 30%, so if you want to tip just 20%, you have to click more and annoy everyone. I mean, nobody wants to be asked to give a 30% tip at a hardware store.
People say this but there aren't nearly as many tip screens "in places with no history of tipping" as they say.
On the other hand, I bet a lot of elites were cheap and used to under-tip.
I'm not sure why you're focusing on elites here. I think you're underestimating how much this is specifically middle class people complaining, while liberal elites scold everyone else into tipping.
I think the tipping options on card readers are doing most of the work here. I was always happy to ignore the tip jar at a place where I'm getting takeout, the card reader tip options slow me down.
By that logic, replacing income taxes with tariffs is fine - we didn’t used to be able to track income, so we taxed only the things we could track, which were international shipments. Technology changed, so we tried to make the taxes more broad based and less distortionary.
Not analogous at all. Few people were calling for the repeal of the income tax system. Most of the public was just fine with it. So there's no groundswell to replace it completely with tariffs.
But "no tax on tips" is popular because it DOES restore a status quo.
It's still distortionary, and particularly so in a way that people have been complaining about in recent years.
The easy way to lose any tax argument in a democracy is to make arguments about economic distortion.
Yes, I understand, the purist ideal is a tax system that has no tax arbitrage effects. But in the real world we don't have that system, there are tons of distortionary tax breaks and preferences already, and people prefer this sort of thing to the more purist ideal.
At any rate, it isn't any more distortionary to not tax tips now than it ever was to not tax tips. We had this particular distortion in our system (in the form of informal cash tipping) for decades and our system worked fine. Because in truth, it's not a big deal that there are some distortions created by the tax system.
Are you literally saying there's no point in trying to make things better, because it's "not a big deal" that they're worse than they could be?
Agreed. And there's no need for exotic stories about strippers or gambling- the vast vast majority of tipped workers who weren't paying taxes before the 90s were regular boring jobs like waitresses/waiters, taxi drivers, valets, etc. That's probably tens of millions of workers. You got tips in cash, you obviously didn't declare them on your tax return
The IRS had an assumed 8% of gross receipts amount built in, it was obviously low, but that's pretty much what people reported in the cash days.
Correct. I only use strippers and gambling as examples because there are lots of pockets of cash compensation in the economy and, again, it didn't really bother people that not all this compensation got reported. Suddenly the tipped worker got pulled out of that world by technology and it is reasonable for the public to want to restore the status quo ante.
I don't know if you're married, but a word of advice: I try never to begin a sentence with, "I only use strippers and gambling because...".
There's nothing wrong with either strippers or gambling, for married or single people, though I don't recommend either in excess.
Protecting the status quo because it's the status quo especially after we've already proven out the alternative works alright is asinine.
Incorrect. What is actually asinine is insisting that because technology changed a status quo, in a democracy, without anyone consulting the public about it, that we should ignore public opinion and just let it stand as a stealth tax increase.
The public was consulted. They preferred visa over cash. And good lord, this is one of the mildest possible changes to the status quo. If this is an appropriate response to fixing a minor tax loop hole in your view, one can hardly blame billionaires for lobbying to slash Medicaid and return their tax burden to a 2014 status quo. The public my ass, rent seeking is rent seeking.
That's wrong. The public was never consulted on the stealth tax increase.
When they were consulted, they polled strongly in favor of restoring the old status quo. Which is what we should do, because we are a democracy.
No one likes that we now pay sales taxes on internet purchases, but we aren't demanding state governments remove it. Also, the median age of wait staff is apparently 25.9, so the number of people who worked in the world you reference is rapidly dropping.
With regards to your gambling example, losses are deductible so in that world, it should be a wash (ignoring for the moment that most don't itemize). But it would be funny as hell to get a 1099 in January from your friend.
"No one likes that we now pay sales taxes on internet purchases, but we aren't demanding state governments remove it."
TERRIBLE analogy. The status quo on sales was we PAID taxes. Then the Internet came around and we didn't, and we eventually restored the status quo where we paid taxes.
The COMPLETE opposite of tips, where we DIDN'T try to collect taxes due, then technology made that possible, so we are now restoring the previous status quo with no tax on tips.
"With regards to your gambling example, losses are deductible so in that world, it should be a wash (ignoring for the moment that most don't itemize). But it would be funny as hell to get a 1099 in January from your friend."
In reality lots of people owe taxable income on informal gambling, almost nobody reports it, the itemized deduction thing is huge (because technically if you win even $1 at one session and you take a standard deduction you are required to report it), and nobody thinks this is a terrible status quo because most of us are normal people who don't think perfect tax collection of minor cash transactions is necessary and we aren't worried about some economic distortions as long as the system works fine.
I'm kind of amazed at how invested you are in this argument. I think the whole issue is kind of dumb (even though you may be right about the popularity) but really don't care that much about it.
BTW - it was really cool that you got quoted in the NYT.
So obviously I concede this isn't the biggest thing in the world. For the same reasons I didn't think anything was wrong with the old status quo, it's not that the new status quo is terrible. If tips are taxed, it's not the end of the world.
But I do think there's a principle here, beyond even democracy. And that is what Prof. Orin Kerr calls "equilibrium adjustment" in the 4th amendment context-- that new technologies shouldn't impose stealth constrictions on people's freedoms simply because it becomes possible to do things that weren't possible before. To me, this strikes me as a classic equilibrium adjustment problem, so when I saw the "no tax on tips" polled well, I did get behind it. It struck me as exactly the sort of thing where vox populi should prevail to uphold the principle.
But, again, if we ended up not repealing the taxes on tips, I'd be... fine. We'd survive either way.
Tip less
Then they know you are "stiffing" them because you have to click like 6 times
Maybe you’re leaving a custom tip of 59.833%
Pay in cash and then tip the loose change plus $0 or more dollars in bills, based on what you believe to be a fair tip. That avoids up charging via tipping and consistent with previous 90s-era tipping behavior.
Or just select $0 on the tip screen. We progressive need to learn comfort in implementing our beliefs, even if some people think we're assholes for it. I've had plenty of disputes with cashiers over the years and I'll gladly fallback to order-via-app for pickup and self-serve checkout to avoid hostilities if needed.
I just tip to the whole dollar amount at counters.
Telling people to fight government policy by making personal choices that go against it is not very helpful. Structural problems require structural solutions, not individual decentralized quixotic stands.
I am moving back to 15% or 0%. My only tip options.
We should have a European system where tipping is not needed.
Tipping is a cultural phenomenon, rather than something mandated by government regulations, so it's not exactly clear how we get there.
MA had a referendum to get rid of the tipped minimum wage (and therefore increase wages for restaurant workers to standard minimum wage). Opponents didn't make the Econ 101 argument that higher wages cause job losses. They said that if you raise wages $4/hr then tipping will drop by $6/hr because people will think they don't have to tip anymore. It was all very strange and no one made any sense. I can't imagine how ugly a fight to actually get rid of tips would have been.
Yeah that argument made absolutely no sense. Looking at all the states that already have no tipped minimum wage like California, the tip culture is no different at all.
Clearly on its own, raising the tipped minimum wage just raises waiter wages even more while doing nothing to help kitchen staff, so my initial inclination was to vote no - we don't need to make the front-of-house and back-of-house pay gap even bigger than it already it is. However once I saw that the referendum had an explicit provision to allow tips to be redistributed to kitchen staff, once tipped minimum wage equaled the full minimum wage - that was enough to swing my vote to yes.
I was dismayed by this legislation, and the fact that nearly all Democrats supported it. But I do recall the bill supposedly sets limits on the types of job classifications that the new tax tweak will apply to.
Yes, the "everyone will just classify their income as tips" people are being a little silly. Why didn't everyone classify their incomes as tips and take cash payments back before the IRS could electronically track tips?
Because the pos systems and electronic transfers are fundamentally different than cash tips.
You could do this with no outward change to the consumer which would have been quite difficult to do under a cash tipping regime. Our service is x percent less expensive with a mandatory tip is just some square fine print that no one reads. In a world where we pay for things by just waving our phones at things it is pretty different than cash changing hands.
You fundamentally missed my point.
Pre-the electronic revolution, you could absolutely agree with your employer to classify some of the revenue as cash payments made directly to you as an employee.. That would have no effect on employer taxable income (it would reduce revenue but also reduce labor expenses) while reducing yours. This option was always available and the IRS, much of the time, would have no way to really detect it.
And yet-- people didn't do this for the most part. It did happen, but it wasn't common.
So the notion that post-"no tax on tips" everyone's going to engage in this sort of misclassification of income strikes me as highly unlikely. It didn't happen before.
Two reasons why not to do that:
Low wage managers were considered likely to cheat their employees if paid in cash!
High wage employees would be audited.
My theory for why it’s different is you could set up your pos system such that there wouldn’t be a downside risk that would exist in a cash system. People didn’t do this because the nature of cash income is subtly different and a world where cash transactions are very unusual it really rewrites what is possible to do without notice.
If anything, it's much harder to do with electronic systems in place.
Oh I'm totally going to make all my income "tips". I teach private music lessons.
Oh I'm sure it's cheater friendly! I teach private music lessons, and I'm already wondering how much I can lower my rates but then replace the difference with "tips".
The chart showing after-tax money poverty dropping sixfold is so powerful I can’t think about anything else. If that line really captures the American experience since 1960, we ought to be patting ourselves on the back a lot more — and a lot more afraid of the bad old days.
This is why using the official poverty numbers which don't show transfers is so bad. It convinces people that nothing has changed, and nothing can be done. Worse is using the supplemental poverty measures, which are basically inequality measures rather than poverty measures. For those, if everyone including the poorest triples in income the number does even move.
LBJ and Reagan are underrated at making government transfers more progressive.
Reagan tax cuts created deficits. Booo!
The debate at the time was over whether they'd spike inflation. Real supply-sider patriots fact-checked these tax cuts non-inflationary.
In fact, the inflation fell so much faster than expected that real deficits grew much more than projected. This was fine and manageable. The actual problem is we just decided to throw way too much additional spending on Boomers. I'll check the OMB data from Biden WH, but iirc %GDP revenue average has only fallen like .8% post-Dubya from the post-Truman average at the same time %GDP spend average has risen 2.4%.
But fiscal policy has nothing to do with inflation. That’s the Fed’s doing. The harm of the tax cuts were the deficits, not inflation.
I judge fiscal policy by whether deficits exceed public investment (NPV>0)
So if Reagan did zero deficits but permitted government taxes and spending to grow, this would be preferable for long run growth? I'm not enough of a deficit hawk to believe this.
Given the spending, higher taxes and lower deficits is better than lower taxes and higher deficits.
Printing moderate amounts of money and giving them to poor and struggling people is worth 6% inflation.
Inflation is bad for bond holders and creditors.
Until bondholders and creditors demand much higher interest rates to compensate them for the loss in value of their principal. Then it's even worse for everyone.
negative real interest rates are common. people have to put their money somewhere
"negative real interest rates are common"
This is bad for people!!!!
Taxing consumption progressively and giving it to poor struggling people is better. [Although if they are struggling becasue of circumstance — sickness old age, child rearing, unemployment — I prefer “horizontal” transfers with a consumption VAT from out-of-circumstance to in-circumstance people.]
Good point, this is one of the reasons I get so frustrated when people bring up how this time period in American history is the worst ever, and we need to go back to the "good old days", those days were a lot worse for a lot of people. We should definitely be wanting to make things better, but people really take for granted how far we've come in a lot of areas, and our achievements.
In a society, like America, with a broad middle class, a very progressive tax system does not raise maximum or close to maximum revenue, because the middle class a whole has more money than the rich. You can eat the rich, or you can raise a lot of tax revenue, but you can't really do both.
I feel like there's a thing where everyone intuitively defines "rich" (and therefore deserving of higher taxes) as anyone who makes more than themselves. And given where we live and work, roughly half the people in our immediate circle probably make more than us. So we intuit that the taxable rich is roughly half the population, not a small sliver.
I'm fine with raising taxes on people who make the level of income that I make, as long as I personally am exempted.
That's the power Trump is missing. He should be able to set tax rates on individuals and corporations...individually!
So you are a NIMPC, not in my paycheck.
Yeah, it would be useful to have more words available to describe levels of income/wealth more precisely.
Something like:
- Service sector
- Skilled trades
- Nurses, pharmacists, etc.
- Doctor / Lawyer / Engineer
- $10M-aire
- $100M-aire
- Billionaire
My impression is that $10M is roughly the point where people stop earning regular W2 money and start exploiting tax loopholes, and I want those tax loopholes closed so people actually pay their fair 30%.
But it's true that the nurse / doctor tiers are the workhorse of our tax revenue and if you want to raise a lot of revenue, you need to target that group.
I think you're aiming too high - a lot of small businesses that produce income to an owner at much lower levels than
$10m achieve a reduced tax footprint through a combination of underreported cash income and creative accounting. Physician practices are also notoriously structured to minimize taxable income. Decent amount of ag tax engineering - I once knew a professional football player who bought a working cattle farm because it functioned as a kind of tax shelter, but then he got into the vibe and kind of turned into a cowboy.
In a world where conservatives are outraged by poor migrants breaking the law by sneaking across the border (or making an asylum claim), I love the wonderfully anodyne term "underreported cash income."
Not saying *you* are a hypocrite (no basis for that), just making a general observation about people's flexible sense of outrage.
I like the call the doctor/lawyer/engineer/"corporate" tier, which I'm part of, the "working rich" to distinguish us from the non-W2 rich people. We pay a lot in taxes!
30%? If you're in an income tax state you're going to pay almost 50c on the dollar per marginal dollar.
I'm scarred from Reddit where if you suggest 37% someone starts yelling “but if capital gains goes above 20% investment will stop and the economy will die!”
That's right. We do need to tax "people like us" more. Less than "them" but more.
There is where I feel like the framing of us against them doesn't really work. Either we are all in this together or we aren't. It's not so easy to identify a different class "them" we can just go after as scapegoats and simultaneously have no impact on "us".
I guess I need to revise my words. I agree with you. I just mean that revenue raising needs to include the middle class but that progressivity can also be increased.
That's a great point, some people assume that having any type of disposable income makes one "rich" or simply being able to take a vacation once a year, makes you rich. On the flip side, there are American's in a family of 4 and their household brings in $60k a year and they think they are upper middle class, and then I've met people who make $150k a year who swear they are poor. It's all vibes...
In general the Northern European countries I admire a lot tax the heck out of the middle class. You have to for that kind of safety net.
It’s kind of startling how bad “state run grocery stores” is, as ideas go. “Food deserts” probably don’t exist, but if they do, they’re pretty obviously chasing demand more than forcing it.
But also, the potential upside just isn’t there. Grocery stores have <5% profit margins. And the number of people starving in the street is a rounding error.
Is it just me? It seems like a red flag that this is even being proposed, like Mamdani’s circle isn’t willing to give good feedback or they’re not optimizing for good ideas.
I mean, better or worse an idea than repurposing subway stations as medical care centers for the homeless?
I wish I were making that up, but I'm not creative enough to have ideas as fucking terrible as Mamdani's.
So I read that there are something like 15,000 grocery stores in New York City, from bodegas all the way up. Mamdani is proposing a "pilot program" of five city-owned stores. It's dumb partly for the reasons you give and partly stacking the deck (e.g., apparently these stores don't have to pay property tax because they're on city-owned land -- nice!) But in the end, this strikes me as yawn inducing. It sounds like a "big new idea" but it's peanuts, for better or for worse.
This kind of thing, and Mamdani's baldfaced attempts to jump on the "Abundance" bandwagon combine to make me think this guy is a charismatic bullshitter. Such people can turn out to be big successes, but only if they understand that they are bullshitters and don't fall into the trap of believing their own bullshit.
I think when he originally proposed it he meant it because he's a socialist. Then when he had to moderate he said "well it's just a pilot program, we'll see." Kind of like saying he's not for defund anymore when earlier he said that feminism required defunding the police. It was always a stupid idea and doing five stores is still a stupid idea. No one sits around thinking that NYC government is so good at doing things that maybe it should try doing a new thing that is currently adequately done by the private market. I think he really did mean it as a big new idea and it only became yawn inducing when he decided to moderate.
That's the only thing that gives me hope that he'll "moderate" all his stupid ideas away to nothing and try to be a good mayor. I really hope so!
I think he'll have to explain some of these things better. Kamala wasn't able to just say that fracking is cool now without explaining her past position. I don't think in a general Mamdani will be able to do that for defund. And he's very much promising to "freeze the rent" -- hard to back down from that one, but it will be a disaster if implemented.
We all misunderstood him. He actually said "free ze rent" in a weird French accent, and he was actually calling for a free market system that will spur development.
"It's German for 'The, Bart, The'"
“… “Food deserts” probably don’t exist….”
Of course there are food deserts. What do you think the Aloo Gobi is?
Oh man, really? Next you'll be making a really weak pun about California's "Mojito Desert" and none of us want that.
"...California's "Mojito Desert"...."
That is indeed a really weak pun, Marc, but I did not make it.
(I was surprised, though, that I could not come up with any other foodstuffs whose names incorporated the name of a desert. No Chicken Sonora? No Kalahari Kalamari? No, not as far as I can see. So, I used what I had.)
Almost makes you wish for a Nutella Winter.
State run grocery stores is a terrible idea. But my very un-american take is that having little Caffefour express grocery stores within walking distance in every neighborhood is great. Apparently the way to get there is to just mandate small footprints for stores so that Costco and Whole Foods are illegal.
https://www.noahpinion.blog/p/secrets-of-japanese-urbanism-part
Making Costco illegal will result in widespread rioting, which I will join.
Excellent, that'll really make it feel like Paris
I would have gone to take part in the riot, but there was a transit strike that day....
Meh, American suburbs are too low density to support everyone walking to the grocery store. So in a world where people are going to be using their cars to go shopping anyway, I don't see why we need to deprive them of the superior selection and pricing of large-format stores.
In parts of the US like NYC where the market can support it it, small-format street corner grocery stores you walk to are a thing. And... in my experience, in every respect other than being able to walk to them, they aren't a great shopping experience compared to the suburbs.
Yes, totally, but *why* do the corner grocery stores suck? They don't have to.
Because they're small, so they can't stock as wide a variety of products and their economies of scale aren't as good.
Also, those reliant only on walking to a grocery store near their house probably aren't going to have as easy access to other stores, so they won't have to worry about as competitive pressure so much, compared to a store with a customer base that can drive anywhere.
That piece really struck me at the time by raising the point of the positive externalities of this kind of market interference.
It is a bad idea.
But also food deserts exist. Just go to Ward 8 in DC and try to buy fresh groceries or sit down to have lunch.
Yeah, wasn't Ward 8 a place where a lot of restaurants stayed out because of crime even when crime was relatively low?
They do exist if you go to east Baltimore or parts of the blight where people do live.
There was a study a while back that found poor urban neighborhoods weren't actually "food deserts" for the most part and in fact tended to have more grocery stores and restaurants than average:
https://www.nytimes.com/2012/04/18/health/research/pairing-of-food-deserts-and-obesity-challenged-in-studies.html
What's the line of thinking on "they don't exist"? I feel like their existence is fairly obvious and straightforward, so maybe we're defining them in different ways
As a phenomenon defined by statisticians, sure they exist. As a problem for the communities affected, they do not.
It’s just an economic fact that stores satisfy demand rather than force people to buy their products. That’s why, even though the original food desert research is at least 2 decades old now, there are no interventions that have worked.
Mamdani is only reaching for “state-run grocery stores” because opening regular ones in poor communities was found not to change nutrition quality: https://www.nber.org/system/files/working_papers/w24094/w24094.pdf
OK I see that point and largely agree that they are consumer-demand driven. But I guess I still lean to the side of them being "real", because there will of course be some people in any given community who would also like to have the kinds of food options that most PhD statisticians and nutritionists would like. But to some degree, it's a little like me calling a city in China a "food desert" because I don't like the food there.
Where I'd pushback a little more is that crime, safety and poverty can also play roles in that they can create "deserts" even from the perspective of communities who might prefer something other than a Whole Foods.
Yeah, if a store closes down because the margins aren’t high enough, but part of the reasons margins aren’t high enough is because of high crime committed by a small number of people, that seems different than “well there wasn’t enough demand.”
All this stuff is in the context of why and how it's being discussed. The way I've usually heard about food deserts implies that businesses are racist or classist or something, which leaves out all the other things we've discussed: crime, consumer tastes, consumer disposable incomes.
One of my last jobs was across the street from a half-built Target in East Hollywood that was being blocked from completion by NIMBY / "Environmentalists". That would have been an easier place for me to get food and I'm sure would have benefited many other locals even more. I think you're from LA so you're probably at least a little familiar with how low income much of that neighborhood is.
So tl;dr, NIMBY plays a part, too, and I agree crime is a different angle, so I wish the people promoting awareness of food deserts would also bring that up more.
I'd love to see Mamdani walk into a neighborhood grocery store that he thinks is inadequate and explain how his city store would be different and why.
So, my understanding was that the issue is neighborhoods where there aren’t grocery stores at all.
My old place of work did some good research on this and agree with you:
https://www.rand.org/pubs/commentary/2017/12/fixing-americas-food-deserts-alone-wont-fix-our-terrible.html
You are absolutely right. Populism is a cancer, and people are so desperate for solutions that they are willing to listen to anyone who gives them a simple answer to complex problems and just lies to them. And then when the person frames the solution in a way that means that there are no downsides people just flock to them. In this instance though, I think Zellnor or Lander would've been way better picks for Mayor, but people really coalesced around Mamdani because he seemed to have the best shot to beat Cuomo. Or at least that's what I'm being told by friends and family who are still in NYC.
This is especially important with the aging of society. As the number of pensioners* relative to workers increases, existing programs will become more challenging to finance. Barring some huge shift in public opinion or economic transformation, I can't see any major new programs being viable and am worried about the viability of existing programs. From my perspective none of the developed countries are taking this seriously enough and the mass public never gets it.
*The US likes to pretend that social security and medicare are entirely different from other pension schemes, but at their core they're transfers to the old from the young paid with tax dollars.
To keep Social Security solvent, how many people would choose higher immigration over tax increases or benefit cuts? If it is a pyramid scheme as some say, then one way to keep it going is to add more people to the base level.
I think the average voter would reject the tradeoff because they're innumerate and believe people who say that "cutting government waste" or "taxing billionaires" can make up the shortfall, but across developed countries the elite opinion is clearly immigration.
Yea, and all over the devloped world they're risking democracy itself because voters keep saying no. It's not a plausible solution.
I've always been a proponent of the 'universal' program concept but for these types of benefits it may be time for some degree of means testing or floating structure related to actual revenue collected. There also may be a strong case for uncapping contributions in the case of SS and/or just increasing them from the childless to mitigate against free riding.
Otherwise the only thing that might save us is the massive transfer of wealth coming when the boomers die. I know Republicans have made a lot of hay out of a 'death tax' but a levy on everything the boomers horded for themselves may be enough to base a fiscal reset around.
I don't disagree, but there isn't an alternative to risking/circumventing democracy when voters demand an incompatiable policy package. As long as voters demand https://pbs.twimg.com/media/GRJN42qXgAAjddz?format=png&name=900x900 coupled with little or no immigration, policymakers have to "violate democracy" by some combination of not providing services and transfers that voters demand, raising taxes, or bringing in immigrants.
“Human beings chafe under the demands of multiple languages, cultures, and styles of thought. They chafe more the lower their intelligence or education level. However, institutions that master the challenge of incorporating diversity produce measurably stronger outcomes compared to culturally monolithic institutions. This is merely one example of the challenges facing a political system built on popular will.
What works in the emerging economic order is decentralized decision-making, diversity of thought, trade, fast cycles of innovation and failure, and choices based on scientifically-derived data rather than human intellect, emotion or instinct.
What’s popular is a monolithic dominant culture, stability, restraints on trade to protect favored cultural interests, economic policies premised on perceived fairness rather than profit or success, and authoritarian politics. This list of popular policies was not far removed from optimal strategies in an industrial society. In a data-driven economy, these priorities are more than just sub-optimal, they can turn catastrophic.”
https://www.politicalorphans.com/social-democracy-wont-save-liberal-democracy/
When I read this article it always reminds me of the incoherence of the old phrase "you can having open borders or strong safety net." No, in fact without a native born population above replacement, you need a lot of immigrants to pay into the system to support the aging population, medical care and all the others goodies that people expect. As unpopular as illegal immigration is, it's a great deal for Americans since they pay into Social Security Medicare/Medicaid and other taxes and get either nothing or very little back compared to legal immigrants, permanent residents and naturalized and native-born citizens.
Or, more simply, are we really going to still be jabbering about the fundamentals while skimming the headlines of a G7 meeting attended by JD Vance, Marine Le Pen, Alice Weidel, and Nigel Farage.
Yea and to be clear a time may come where it is a more palatable part of the solution. Where I'd focus is high 'bang for buck' immigrants who are high earners rather than large numbers of low wage workers from the developing world. The latter has been a disaster.
"Where I'd focus is high 'bang for buck' immigrants who are high earners"
Yep. And it can't be emphasized enough how badly US immigration policy fails at bringing in these people.
The US could easily make immigration much more politically palatable AND economically beneficial at the same time. It just chooses not to because a lot of elite types seem to see immigration as more of a charity program for poor countries than a way to benefit the US. They only seem to care about the latter when trying to sell immigration to skeptical people. Or maybe I should be more cynical and say these people prefer low skill immigrantion because it competes less directly with their own labor. I don't know.
The other solution is these programs have to be paired back, but the older generation and young people don't want to hear the truth unfortunately. It takes people who are honestly interested in solving the problem and unfortunately both the far left and far right live in delulu land.
Most people aren't that good at math, but honestly this has more to do with the difference between individuals and collectives. Every individual voter can realize that you can't balance the budget, lower taxes, and increase spending, and yet the election-winning strategy can be to campaign on balancing the budget while lowering taxes and raising spending.
We could just empower Americans to select their own healthcare treatment, within reason and with appropriate safeguards and subsidization, via cutting out the middle men of rent seeking healthcare service providers and admin overhead. Could use Gen AI for user friendly chat interfaces, but even 90s era internet software or digitally-read paper forms would work fine for automation.
There can be mandatory requirements for continuing coverage, including annual check ups and vaccination, all paid for by the federal government. Other services can be locked behind education, tasks, and chores. Eg, showing up for blood draws, attending an educational seminar--in person or virtual, completing a informed-care screening, demonstrate 10lb of weight loss in a year, pass monthly drug screening for 6 months, etc.
For most of us this will just be DYI death panels because we Americans are ignorant and lazy. Moreover, many of us will use our own time and money for alternative treatment programs, thereby bypassing federal safeguards. But at least we can reduce medical and SS costs without the fear of big government, or alternatively, big business. We can even cut out tons of rent seeking from private practices and special interests of the AMA; at least from the perspective of federal funding.
And we can call it…Singapore
"There can be mandatory requirements for continuing coverage, including annual check ups and vaccination, all paid for by the federal government. Other services can be locked behind education, tasks, and chores. Eg, showing up for blood draws, attending an educational seminar--in person or virtual, completing a informed-care screening, demonstrate 10lb of weight loss in a year, pass monthly drug screening for 6 months, etc."
Also
"... without the fear of big government..."
What do you think State controlled healthcare but only if you eat your mandatory broccoli is?
This is a horrifying idea.
I think this essay neglects one thing about social programs and the taxation that funds them: the demand for social programs (and acceptance of taxation) is *fungible.*
You mentioned this indirectly: the Chicago voter who (with some justification) doesn’t think their government will be a good steward of marginal fiscal take.
But what about the opposite of that: when things work well, people don’t mind paying for them as much. The obvious example is… literally every other developed country in the world where taxation funds universal programs like publicly delivered, funded, and/or subsidized universal healthcare.
So, when “taxes are hard” that’s because people don’t see the value of what they buy. And that’s because so many of those things are *too progressive* insofar as you have means-tested services (for the poor) which aren’t very good paid for by the people with more money who don’t use them. Do you see much of anyone advocating for negating that pre-WWII tax expansion in exchange for no Social Security and Medicare? No! Those social services are universal, essential, and generally well-liked. They also cost a lot of money in taxes, money that we are implicitly OK with paying.
But free buses? That feel unsafe, don’t run on time, and take forever? No thank you.
How about universal pre-K? Well, now we’re talkin! Public education, as long as it’s actually decent—which it isn’t in DC—is politically uncontroversial. Universal childcare? Well… maybe! Depends on whether it’s a demand-side subsidy boondoggle or a supply-side solution building out pre-K and public afterschool programs. Unlike in DC, upper middle class families in Maryland and Virginia are more than happy to fund their public school systems because they are actually good and not “just for poor people.” Any universal pre-K or childcare programs would be judged on the same basis and that would determine the openness to taxes to fund them.
"Those social services are universal, essential, and generally well-liked. They also cost a lot of money in taxes, money that we are implicitly OK with paying."
Except that we're not, because we don't. (We don't nearly pay enough in taxes to fully fund Social Security or Medicare.)
No one has taken the L on this but in retrospect GWB was totally right about privitizing social security. The S&P500 is like 5x higher than it was in 2005.
The L to be taken is that the program as structured was moral hazard in a can. Either we accepted that a bunch of people with highly variable levels of investment experience were going to predictably fuck up their investments and need rescue in old age, or we need to ask ourselves why the government wasn’t just buying $VOO directly instead of delegating that decision to individuals of whom the poorest would end up being bailed out as a matter of political reality.
Buying T-Bills is dumb from a returns perspective—we agree on that—but complete privatization for a program whose essential purpose is destitution-prevention seems like it was also dumb.
LOL. I hate to bring up the whole "index fund vs. whole life" debate again...
... but this is why whole life AND other forms of mutual funds exist.
As you may already know, a balanced investment strategy involves using a mix of T-bills and other low-risk instruments to stabilize a portfolio's value. That then gives you the freedom to invest in a mix riskier companies with higher upside than an index fund.
And of course, when you have someone doing that investing for you, they have to get paid. The rate of pay and how appropriate or scandalous it is, is always up for debate, and of course there's always room for automation and other improvements and innovations for efficiency...
... but this is why that stuff exists. "Just do index funds, bro" may often be correct, but it's also a really dumb and ignorant meme popularized by tech bros who don't understand finance but think they know everything. Just saying.
I actually first heard “just buy index funds” from my financial engineering classmates who now work in finance, who I’m pretty sure do understand finance. And if you find yourself outperforming the market by investing in stocks with higher upside than index funds and you aren’t in finance then you’re potentially in the wrong line of work.
They may have repeated the meme, but is that the only thing they spend their work hours doing? Is it the only thing they invest their own money in? I'd bet not.
It's a heuristic, not a universal truth. The tech bros took it and preached it as the latter, though.
Everyone would be better off for sure, but there also would have been large-scale violence in 2008 and 2020.
There is far too little emphasis on the "security" in Social Security.
It is not a program designed to grant retirees neat vacations to the Maldives. It is designed to keep old people from visibly starving in the gutter.
in that case, we can likely slash SS spending pretty significantly and there will still be very few old people visibly starving in the gutter.
I am skeptical of this campaign message.
Social Security is a program designed to grant retirees neat vacations to the Maldives. It is not designed primarily to keep old people from visibly starving in the gutter.
I think this is bad, and that's why I oppose the Bush reforms, which CBO said would cost slightly more than baseline SocSec until 2060. We shouldn't have the government run a stock index for us, we should just have an anti-poverty flat SocSec and save the rest ourselves.
For retirees I agree with you but the real reason not to is from a corporate governance perspective. Not that Blackrock and Vanguard are the best stewards of their shareholder vote but at least they broadly turn over decision making to the professional managerial class. If those decisions were handled either democratically (vote for lower CEO pay!) or via crony capitalism (CEOs named through a process similar to how the ambassador to Finland is) it would be a disaster.
That's because he wasn't totally right.
We know from the 401K program that a huge amount of money gets captured by financial services sector that has no fiduciary responsibility to give the savers good advice. Also, there's a major spread in knowledge and risk-tolerance and we cannot expect 340 million Americans to be their own financial planner without exactly what you see in the 401K program: huge inequality of outcomes and a lot of normie savers getting bilked.
Now, if you wanted to apply a technocratic solution to it and just say that everyone in America gets 25% of their retirement pot invested in low-cost index funds by the Social Security Administration, I'm fine with that! It's an option to flexibly" invest a minority of your state pension in state-mediated, certified equity funds in many developed countries (with plenty of public-interest guidance). But that's absolutely not what GWB was suggesting.
We would be much better off with Australia's superannuation scheme, but our existing track record with 401ks and the like makes me suspicious that we would let people raid their retirement funds too much to make the system work.
I'll go to bat for 401ks.
Every month millions of Americans put hundreds of dollars into these, which buys up the major indexes, which drives up stock prices, which increases demand for labor, which means more people putting more money into 401ks, and so on.
Everyone benefitting when line goes up really is good for everyone.
This really, really sounds like a Ponzi scheme.
I mean SS is basically a Ponzi scheme now lol
It’s kind of a Ponzi scheme now but this would have better returns than T-bills. One thing that would help is keeping it so you can’t just take out as much as you want; the withdrawals would be predictable.
Privitizing Social Security was always half-baked. While new entrants into the workforce would have their private investment accounts, everyone else had already paid into the existing system, and nobody found a way around paying for two different retirement systems for decades
AIUI the plan was to cover it with borrowing for several decades.
If the S&P500 can solve our problems, why not just go all in? The rate of return is much better than the interest rate on government debt, so why not just buy a bunch of shares on credit and use the proceeds to fund social security
The rate of return would plausibly decline if trillions & trillions of dollars were invested by the US government every decade. Norway famously invests their wealth fund in stocks and they own 1.5% of *all publicly traded stocks globally*- literally every stock on the planet. Coincidentally their economy is about 1% the size of America's. So if you 100x that.....
You can't dump infinite money into the stock market and keep getting 10% average returns every year. There's a reason actually successful hedge funds like the Renaissance Medallion Fund don't allow outside investment
Ultimately, isn't the amount we can pay out in retirement funds limited by the productive capacity of the economy and the labor contributed by the workforce? That is, by how much the economy grows?
Maybe I'm dim, but at the scale we're talking about here, it always sounded to me like One Weird Trick to pay for socialized retirement.
We don't. But, by that measure, we don't pay nearly enough in taxes to fund anything federal, since the government is in chronic, generational deficit.
My point is that *directionally* people are fine with paying the line-items in their paychecks that go toward Medicare and Social Security. And when you touch that political third rail, it is always painful.
Now, if you want to argue that the *degree* of (extra) taxation matters at least as much as the question of tax/no-tax, I don't disagree. You would have to modestly increase payroll taxes from about 12.4% to just under 16% to really robustly fund SS for the long term, with the employee's share being half of that (~8%). That's not nothing. But I also doubt that people would mince hairs over paying $1K a year out of their $75K gross to ensure a inflation-safe annuity for their entire lifespan.
This also disregards entirely the fruitful question of how to change the SS payout to make it work just fine within the current fiscal take. The retirement age is probably too low. The income cap on tax is almost certainly too low (a change that wouldn't be in-your-face but would very much track with the Democratic tendency to raise taxes on the rich). You could also make SS less progressive in various ways, which might be the Trumpian tendency.
Medicare is a similar story, but less. We're probably talking a modest payroll tax increase that would account for a few hundred dollars a year per middle-class taxpayer. Considering the cost of private healthcare, that is nothing.
In general, you're getting a HUGE bang for your buck with these tax-funded, universal, popular programs. You cannot say that about a lot of other welfare state spending in the US, which is WAY too complicated, administratively burdensome, means-tested, and privy to all sorts of rent-seeking and fraud among the various private and non-profit intermediaries who are involved in so much of it.
I would be fine with eliminating the cap on SSI taxes if they also closed loopholes that let the rich not pay it at all.
I would support this even if it hurts me personally; my wife and I get a few paychecks that are bigger at the end of the year after we hit the SS cap, which is a nice bonus, but I’d give it up to have SS still solvent when I retire.
You changed your argument at the end here. You started by arguing that people are willing to pay taxes for broadly beneficial programs (not so sure about that, since they're significantly underfunded, as we've both been discussing, and there's no serious discussion on the table about how to make Social Security and Medicare solvent). You ended by saying how worthwhile these programs are ("...you're getting a HUGE bang for your buck..."), which is not the issue at hand.
Is it underfunded? The Trust Fund is solvent for about another ten years. That, combined with current contributions, covers all demands. You can say under current law, it's not completely solvent after around 2035, but current law does not predict future law.
We have no idea where we'll be in ten years.
Yes it's clearly underfunded. Current receipts aren't enough to pay for current outlays. Even if you believe in the fiction of a Social Security "trust fund" (as if "investing" in a loan to oneself can really be considered an investment), this is clearly not how the program was envisioned or how any rational program would be designed.
When my Social Security withholding went up in the 1980s, I can definitely assure you that that wasn't a "fiction." And now the fund is paying out the accumulated surpluses working stiffs like me paid for decades, and all current payouts come from contributions to Social Security. So *currently* in terms of meeting its payout demands, Social Security is *not* underfunded. What we'll have to do to keep that going after 2035 remains to be determined.
“Some justification”. The majority of our governors went to prison. One - a Democratic one!! - during his term because he was on the verge of selling Obama’s Senate seat. The “Big Machine” - again Democrats, led by a criminal - have fucked our state finances for 40 years. I voted against Pritzker’s bill and also for Biden because (1) fuck Trump but (2) fuck Pritzker. There’s one path forward in IL … break the pensions.
You'll get no argument from me that Chicago is a very well-run city or that Illinois is a well-run state. Or that the local Democratic machine is lacking in corruption.
But, despite all that, residents of Illinois and Chicago enjoy far better social services than residents of Red States (like Indiana or Missouri, right next door, for example). So even a corrupt, criminal Democratic machine can deliver (relatively) better outcomes for citizens.
And there are things that Chicago and Illinois do especially well in, despite that low-quality governance, and they are universal services like:
-Its excellent K-12 and higher education system.
-A universal healthcare system in Cook County, facilitated by a well-run Medicaid expansion.
-CTA public transit, which exceeds an admittedly very low bar for metro transit in the United States.
-Parks and libraries, some of the unsung heroes among the universal social services.
If you compare these universal services to more means-tested ones, Chicago and Illinois are a case-study in how such services are more efficient and resistant to corruption.
My impression is that Chicago K-12 schools are not very good while being well-funded. The Illinois higher-education system seems to be very good, I agree.
In 2023 I found this statistic: "Nearly half of Chicago Public Schools students missed at least 18 days of school last year. Just one-fifth of high school students are reading and completing math at grade level. Yet CPS celebrated a record-high graduation rate."
The level of corruption in Chicago and Illinois government is shocking. When I lived there I could see it all around me.
Yeap. It's crazy. My developer and contractor friends in the city still bake the cash bribes into their budgets. It's gross.
This seems like it's at least as much status quo bias as it is response to the quality of government programs.
That's what we though about a lot of things that Trump's White House just disappeared like that.
But even the most radical team of DOGE interns isn't going to touch Social Security or Medicare.
Yeah, free buses are clearly going to be strictly worse because, while almost nobody is actually burdened by paying current fares, people that a lot of people don't want to be next to are going to camp out on them.
“ literally every other developed country in the world where taxation funds universal programs like publicly delivered, funded, and/or subsidized universal healthcare.”
Thats what we have in America. Or do you think the German government pays the average persons health insurance premiums?
"But what about the opposite of that: when things work well, people don’t mind paying for them as much." I was thinking something similar, and wondered how much the fact such a large % of federal taxes go to the military are a factor in Americans' unwillingness to pay more taxes. Possibly not a super original observation - but it does seem like, although Americans approve of having a strong military in concept, the reality is, it means a large portion of the taxes coming out of our paychecks don't improve our day-to-day existence in any obvious, direct way.
Unless I am missing something, this concept is addressed at some length in the article you are commenting under. Military spending is at a historic low and has been trending downward since my boomer parents were in short pants.
I don’t know if your average citizen *feels* like military spending relative to tax revenue has been on a downward trend. One reason might be that military spending can be highly visible - there go our missiles getting dropped on Russian outposts, or whatever. And along with SS and Medicare, military spending is still one of the big chunks of the federal spending pie, which is often covered by the media. So even if factually military spending is decreasing and has been for awhile, people may still *feel* like it’s a lot of money for no direct gain to them personally.
Ah yes! Reading too fast this morning.
Would edit my comment accordingly but I’m now phone only the next few hours. Sigh.
I can speak for myself: A little over 10 years ago, I moved to the EU. First to Ireland and then to Sweden. Since that time, I've paid higher taxes than I did in the United States (but not by nearly as much as you'd think!). Do I mind? Nope!
The ROI for my taxation in both countries (but especially in Sweden, especially as a young family) is just so favorable that I can't complain at all. Before I moved to Sweden, I did what I usually do before a major life-change and ran my spreadsheets. I found that my life scenario in the US vs. Ireland vs. Sweden wasn't even close: there was a $50K upside to living in the latter over the former! And that's *with* lower income and higher taxation. And, indeed, I've lived here for years now and that's borne out. My situation is affected by the fact that I earn a higher salary than most Swedes (but also pay a higher tax rate), have a 5YO, and have a wife with a chronic healthcare condition (T1D) so your mileage will vary. But I share my own example to show how a higher-tax/better-services paradigm can feel. Even the Conservatives here don't seriously talk about scaling back the welfare state or cutting taxes by more than a little bit because it all is just so self-evident when it's actually working.
Is the example transferrable to the United States? Well, I have a Joe Rogan-listening, Libertarian-leaning brother who lives in Los Angeles, California. He also pays higher tax rate than your average American. But he also gets back public healthcare for it, as a resident of one of the precious few states that offers it. He's definitely no Social Democrat, but this allows him a level of security and freedom that helps him to thrive as a creative, sole proprietor, and jack-of-all trades. If he lived in Texas (as he's often considered doing), he'd be off the public healthcare and would have to fund his own FAR more expensively. That factor alone would more than negate any tax savings. My brother likes to "do his thing" and he just couldn't do that in a lot of other places in the Untied States where you have to purchase everything you use privately and expensively. California can be a fever-dream of wasteful governance for Conservatives, but it's also a place where taxation buys you a lot of really valuable public goods, from amazing state parks to the best state university system in the country (and one of the best in the world) to the country's first universal paid family leave policy.
I'm not saying this stuff is equally valuable to everyone or that anyone should try to live in Sweden or California. But these are examples of where paying taxes can buy you social services that are valuable and would be far more expensive or impossible to purchase privately. And the cool thing about democracy is that then you get to decide what those things actually are: Maybe in another state (like Alaska), you go HUGE on K-12 education, instead, but don't care so much about public transit.
Great comment but I don't get all these people singing the praises of Sweden. They pay super high taxes and yet it's really dark for months of the year! I mean, what's up with that?
It’s true—we keep hearing from politicians that they’re going to fix this latitude-dependent solar declination with a special dedicated tax for large mirrors and the like, but their promises ring hollow and winter remains frustratingly dark!
I enjoyed your funny response, but here's a pro tip from a total amateur. When I give you the straight line about the dark months saying "I mean, what's up with that?" your snappy response has to be, "Not the sun!"
Bada bing, bada boom.
Didn't the majority of Americans also think that the government was also spending 25% of tax dollars in foreign aid? A lot of American's frankly have no idea where their tax dollars are going, but they do like the idea of having a safety net and strong military.
Link to Data: https://www.pbs.org/newshour/politics/where-u-s-adults-think-the-government-is-spending-too-much-and-too-little-according-to-ap-norc-poll
I think you are right, that people definitely don't want to pay more in taxes, but they want good outcomes. The cool thing about Social Security and Medicare is that people are very familiar with the programs and positive outcomes because someone in their friend of family group is most likely using the programs. The other stuff, not so much. We are also a huge consumption society, so if people are going to paying more in taxes but they don't have anything to show for it, they feel immediately against it imo.
“ but they also don’t like paying taxes.”
If the University of Illinois was $120 a semester and Illinois was a sea of billiard table smooth roads - I think you’d have a lot less pushback. Big picture the middle class needs to feel like it’s getting value for money. It’s all well and good to focus on the poor but when you do that, to the exclusion of what’s good for the middle class, you get pushback.
And a lot of it is optics. Take the homeless population - you have a large number of transient homeless who are homeless an average of 3 days before finding accommodation. And then you have the chronic homeless who are homeless for year and who are also the most obvious to the public. If you sell an expensive program to “help the homeless” and you reduce the number of transient homeless by 50% but don’t reduce the number of chronic homeless the tax paying public feels swindled. You can’t be all bleeding heart in execution - you need to spend a fair bit of the money on addressing the issues of those who are paying the taxes.
Illinois problem is its unfunded pension obligations, a symptom of irresponsible governance.
With the end of FEMA Texas and Florida face $100s of billions in unfunded hurricane risk - another symptom of irresponsible governance.
Why shouldn’t the citizens of states with risks of fire/flood/wind/earthquake damage bear the costs? Maybe it woud focus the minds of state governments to make sure that people are insured for the risks they expose themselves to.
They should but then that puts the relative financial picture of the states in a different light.
I look at natural hazard risks like social insurance. We want mechanisms to transfer consumption from not-in-circumstance to in-circumstance people. The difference is that there is “moral hazard” in placing vulnerable assets and lives in certain places. There is a further complicating factor in that climate change has made backward-looking insurance premia inadequate. So people did not have the incentive to avoid “ placing vulnerable assets and lives in certain places.“
Still, I think it would be better at the state level.
Hazard insurance purchased would not be “consumption” the progressive consumption tax. :)
I wish Matt had engaged a bit more critically with the Illinois examples** he started with (though I'm biased, because I live in Illinois). I think the critical question is:
"How do you square the Illinois results with the fact that, in the same election cycle, Arizona amended its constitution to provide for a hefty progressive tax, via Proposition 208?"*
Obviously the answer is not that Arizona is more blue than Illinois; Biden got 49.36% of the vote and Prop 208 got 51.75% of the vote. There are, I contend, four differences between what I'll call "Prop 208" and Illinois's "Fair Tax" that explain the difference:
1) Codification of the Tax Brackets/Rates
Prop 208 explicitly amended the AZ constitution to say that there would be a 3.50% income tax on incomes over $250k (single)/$500k (joint). The Fair Tax did not codify any brackets or rates, and instead empowered the legislature to freely change the brackets/rates as they pleased. At the same time, the IL General Assembly passed a law that would have gone into effect if the Fair Tax had passed, creating the brackets/rates. That law ("SB 687") very slightly decreased the tax rate on income under $100k, and greatly increased the tax rate on income above $250k. The structural difference, of course, is that the General Assembly could have freely changed those rates whenever they wanted, without going back to voters for a constitutional amendment.
2) The Marriage Penalty
For reasons I still do not understand, SB 687 did not contain different tax rates for joint filers vs. single filers. I do not know if this was common knowledge in 2020 in Illinois, but the effect of the Fair Tax/SB 687 would have been to highly penalize higher-income married couples. Prop 208 explicitly contains different limits for joint filers vs. single filers.
3) The Purpose of the Taxes
Prop 208, by its language, explicitly restricted the tax increases to "teacher and classroom support staff salaries, teacher mentoring and retention programs, career and technical education programs, and the Arizona Teachers Academy." I think it is worth being skeptical of lockboxes like this (won't the legislature just take the money that would have gone to education and spend it elsewhere?), but I think this stuff works for voters, and Illinois did not even pretend to have any limitation anywhere.
4) "Trust"
This is the squishiest and worst point here, because I do not know very much about Arizona politics, but I highly suspect that Arizona voters, correctly, trust their elected officials more than Illinois voters do. It matters--or at least, it should--that the governor of Illinois warned that spending cuts, or an increase in the flat tax, would be inevitable if the Fair Tax failed, and then five years later those outcomes have not occurred (and, in fact, Pritzker has been pretty gung-ho about measures that cut revenue, like getting rid of the 1% statewide grocery tax and not increasing the flat income tax).
*put aside that Arizona's Prop 208 was later struck down by the courts
**also, I don't want to make this a whole point, but non-binding referenda like Matt's second example should not be taken seriously and should be made illegal in the United States.
Speaking as a Biden (never Trump) / no crossover from IL, my rationale was they were willing to amend the constitution to tax me more, but were not willing to amend the constitution to modify the run-away pension plans. Had they put both initiatives on the ballot, I would’ve been more willing to consider the more progressive rate.
I continue to wish that taxes were like interest rates: treating in a boring manner where we adjust the rate up or down depending on how much money should be circulating, and how many nice public provisions we want or not. Instead it always devolves into nasty debates over whose and what oxen get gored more or less.
I wonder how many people would even notice if their W-2 withholdings bounced around a bit like interest rates.
And go-nowhere debates over the nature of the state, if taxation is inherently theft, etc.
>Means-testing tends to create a lot of political anxiety about deserving versus undeserving poor, whereas nobody seems to think we need work requirements to visit a public park
Ngl this would make public parks better
I know it’s not what you mean but I take my kid and dog to the park and the unemployed there on a weekday are grandparents.
Get those freeloaders out of there.
Not to mention your kid and the dog.
My dog is a full time floor cleaner and security guard.
I think that is possible to raise taxes without huge resistance if the government is doing a good job. Here in Madison, a referendum passed last year to increase city property taxes [1]. There were a lot of components to this (threats to cut city services if it didn't pass, the fact that it mostly was just keeping up with inflation, and Madison being Madison), but I think that a big reason it passed is that the city is well run.
For example, a couple years ago, a (city-owned) tree in front of my house had a branch crack in the wind, and it hung like the sword of Damocles above my neighbor's car. I called the city forestry department, and a city arborist with a chainsaw and a bucket truck was on the scene 25 minutes later. In fact, I've only had good interactions with city services (except for parking enforcement, who I wish slacked off more). That's the type of government I'm willing to pay more for.
[1] https://www.wpr.org/news/madison-voters-pass-property-tax-referendum
That chart that breaks down impact by income decile reminds me that the Dems are a bit unclear on who they are/want to advocate for.
Are they a base of 80-100 decile voters looking to help 0-30 decile people and willing to piss off 30-70 decile people (the “not rich but make too much to get benefits group)? There’s no right answer, but clarity in priorities would go a long way.
Right, despite rhetoric against the top 1%, the party really seems to be run by the next 19%, the educated professional class. And we are awesome people - high-fives all around!
But 19% does not come close to winning elections.
I'm glad you said that. We are awesome people, and often our awesomeness goes unremarked.
👏👏👏
And yet for all that, the electorate is still basically split 50/50 with power shifting back and forth between the parties. (Though the Senate is admittedly a tough problem.)
I mean, it’s both? I want to help the poor in need AND I want taxpayer-funded things that are helpful to the middle class (like excellent public education and affordable childcare and elder care) AND I personally am fine with paying high taxes for all this. “Taxes are the price we pay for civilization” -Oliver Wendell Holmes
The problem for individuals in higher relative tax jurisdictions like DC is the apparent inefficiency of current spending and the lack of confidence that higher taxes will produce much marginal benefit for said taxpayers. DC recently wrestled with a dumb, forced budget cut arising out of the GOP's continuing resolution, but the local political leaders acted like finding $400m in one year reductions in an $11.7b budget (excluding capital expenditures) was tantamount to murder. Between the long-term economic restructuring associated with the federal workforce downsizing and reconciliation changes to Medicaid and SNAP in the OBBB, DC is facing a leaner structural budget environment for years to come - zero confidence they'll meet this challenge with grace and prioritize the truly beneficial programs while cutting the waste.
In 2022 in Massachusetts the "Millionaire's Tax" won 52-48 while Maura Healey took the governor's office with over 64% of the vote. The gap on the tax shrunk late in the race when the "no" campaign focused on how many residents were actually at or around the $1m number (which included one-time events like home sales). A more progressive approach to the tax (first five hundred thousand over $1m at 1% . . ." probably wins easier.
yeah the typical American millionaire is not Jeff Bezos but rather a retired homeowner in a decent-sized city
That retired person is typically not making 1 million a year, which is who the tax hits.
But they are making a million the year they sell a house.
That's the problem with convincing people - a lot of people have a million-dollar house (or have parents or grandparents that do) and don't think of themselves as "rich". After all, they can't *spend* the house, they have to live in it.
It's four percent and the sale of a house only counts the appreciation since prior sale with an additional $500,000 carve out on your primary residence. So, if you bought a house for $300k and sold it for $1.9 million. You would owe $4k (though actually probably not because sales costs are deductible).
fair point
Years ago, working at a small manufacturing company, I would sometimes spend time on miscellaneous, odds-and-ends tasks that couldn’t be charged to a particular project. So, what should I enter on my timecard? “Use the R&D account”. Yep, the one that qualifies the company for a tax credit.
The income tax, particularly as it applies to business income, is a perpetual game of “Whack-A-Mole”, with the IRS, at least in theory, making sure that the billions of daily transactions in a complex economy are properly categorized and reported on the hundreds of millions of personal and business tax returns that need to be filed each year.
What is “R&D”? What is a “legitimate” expense? Suppose I own a restaurant that serves a teriyaki chicken sandwich – well of course I need to travel to Hawaii every year to inspect the pineapple crop.
Don’t tax income, tax land. Replace the income tax with the Land Value Tax, also known as the “Single Tax” first proposed by 19th century journalist Henry George in his book “Progress and Poverty”. Land ownership is the primary source of unearned, unproductive inequality. If you got rich inventing that Better Mousetrap, then you earned it, keep your money. But that oceanfront view that makes your plot of land valuable – you didn’t build that! Taxing land simplifies not only the calculation of taxes owed but also enforcement - you can try to hide income, but you can’t hide land.
Business income should not be taxed. Period. Tax the owners' consumption when they consume it.
Sure, try a LVT. If it were worth doing cities and stats would be backing out the value of land improvements and taxing the "land." They are not for a reason; juice not worth the squeeze.