To be more correct, it’s a 7% decrease in income over $5,000,000 (if the total tax rate on that income was 50% before and went to 53.5%, the amount remaining dropped by 7%).
I think this point is under-appreciated. As the top federal tax rate has dropped over the decades, each additional percentage point drop has given less proportional value to top-rate-payers, while costing proportionally more of remaining federal revenue. In that sense, the lower the tax rate already is, the more expensive a tax cut is to the government. The higher the tax rate already is, the more expensive a tax increase is to taxpayers.
This is why tax cuts under Bush and Trump blew up the federal budget - tax rates were already pretty low, so quite deep cuts to revenue were required to deliver any notable benefit to high-rate taxpayers. It’s hard to make rich people much richer by cutting taxes when they are already keeping most of their income. In the case of the Trump tax cut, rates were already so low it required raising taxes on some to cut for others.
On the other hand, you can go back and find times when after-tax income of top rate payers doubled because the top rate dropped from eg. 91% to 77%, which delivered a lot of relative value to those taxpayers while fitting more easily into the federal budget (although as always, it’s probably more complicated as tax bills make changes to deductions when they change rates).
> This is why tax cuts under Bush and Trump blew up the federal budget - tax rates were already pretty low, so quite deep cuts to revenue were required to deliver any notable benefit to high-rate taxpayers
I just want to point out that after the Trump tax cuts went into effect, revenue increased[1].
GDP was growing before and after the Trump tax cut, so growth in tax revenue year over year was expected. The Trump tax cuts went into effect in 2018, and according to your link tax revenues increased from 3.32 to 3.33 trillion that year, which is a 0.3% increase. This was during a year when GDP grew by 5.2%. In other words, revenues fell behind GDP by 4.9%.
Note that I used nominal GDP growth because the linked article used nominal tax revenue. To adjust for inflation we subtract the inflation rate from both sides and we’d get the same 4.9% fallback in tax growth relative to GDP growth.
Oh yeah it's definitely debatable if tax revenue would have grown faster in a counterfactual without the cuts, but that debate is orthogonal to the point you were making about "blowing up the federal budget", which is strictly a function of receipts and outlays. If the receipts increased, then the budgets woes are clearly a result of increased outlays.
Federal tax receipts as a % of GDP has been largely flat since WW2:
Your link shows the ratio decreasing from 16.97% to 16.16% in 2018 when the bill went into effect. That’s a 5% decrease, which agrees with my above math.
Overall your chart shows the ratio has a range of 19.75% to 14.42% in the past 20 years, tracking changes to the tax code and business cycle, exactly in the way you’d expect. That’s a 36% difference between the min and max ie. not flat.
I think lawmakers supporting tax cuts try to claim that tax revenues are not sensitive to tax rates because it would be convenient if true when trying to pass a tax cut. The facts don’t bear it out, however.
I think the roots of this argument are in the theory of the Laffer Curve: https://en.m.wikipedia.org/wiki/Laffer_curve
The Laffer Curve was used to argue for tax cuts when the top marginal rate was 70%. People are still trying to make this argument, but I think they missed the part where it’s supposed to be a curve, so the result of cutting taxes from 70% is not the same as cutting them from 35%.
Right, everyone knows about the Laffer curve. It's hilariously simplistic.
> I think lawmakers supporting tax cuts try to claim that tax revenues are not sensitive to tax rates because it would be convenient if true when trying to pass a tax cut.
The point of the chart going back to WW2 is to show that it's a little more complicated and we can't draw conclusions either way.
And circling back to the original point of contention, spending is not function of GDP, or in theory it shouldn't be. Spending is a function of population. So if federal tax revenue increases even after a tax cut, but deficit increases, then the culprit isn't necessarily the tax cut, the culprit is the spending increase.
You also need to include inflation. Tax receipts actually fell on an inflation-adjusted basis in 2018. Absent any changes in government policy, you’d expect expenses to roughly follow inflation plus population growth, and revenues to roughly follow GDP.
> The point of the chart going back to WW2 is to show that it's a little more complicated and we can't draw conclusions either way.
I don’t think this is correct. Yes, the economy is complicated. No, that doesn’t mean when cutting taxes we can ignore the resulting increase in the budget deficit. A claim that cutting taxes won’t increase the deficit constrains you to make other claims according to the GDP = C + G + I + X equation, and we should demand that lawmakers be specific about those claims.
As I pointed out, the chart is not really flat. The line actually goes up and down.
> You also need to include inflation. Tax receipts actually fell on an inflation-adjusted basis in 2018. Absent any changes in government policy, you’d expect expenses to roughly follow inflation plus population growth, and revenues to roughly follow GDP.
Great point, but it increased again in 2019. In fact, inflation adjusted tax revenue has been increasing (with minor transient dips) throughout history[1]. You'll definitely find one-off variations, but the trend-line for inflation-adjusted Federal tax revenue is up-and-to-the-right.
> No, that doesn’t mean when cutting taxes we can ignore the resulting increase in the budget deficit...As I pointed out, the chart is not really flat. The line actually goes up and down.
It's complicated because the ups and downs don't perfectly correlate with tax policy. You can find moments where a decrease in tax revenue as a % of GDP coincide with a tax cut, but you can also find moments where a decrease in tax revenue as a % of GDP coincides with a tax hike and vice versa.
It's important because if you zoom out and look at Federal tax brackets over time since WW2, the US's inflation adjusted tax brackets went from 22%-92% in the 1950's[2] to 10%-37% in 2020[3], but Federal tax receipts as a % of GDP is flat / moderately increased over that period.
I think the long-term historical drop in the ratio of [top marginal rate on individual income] to [tax as a % of GDP] is mainly the result of these factors:
1) increased tax compliance
2) more tax deductions
Overall, you’d need to use a more comprehensive “area under the curve” analysis of every tax to predict the impact of tax policy on total tax revenue, and it would be surprising if it could be predicted based only on the top marginal rate.
A major source of short-term noise is the business cycle, where capital gains and corporate profits fluctuate much faster than GDP, and some automatic stabilizers decrease revenue.
It's not just the top marginal tax rate. The full bracket has fallen across the board, not just on the top marginal income tax payer.
> A major source of short-term noise is the business cycle, where capital gains and corporate profits fluctuate much faster than GDP, and some automatic stabilizers decrease revenue.
Yes, which is why it's tough to suss anything out from the minor variations between consecutive years, and it makes a little more sense to look at a longer time horizon.
Wow, iPad revenue up 31% YoY after being down ~10% in the last few quarters. Similar numbers to a Q1 (holiday season). I guess it makes sense that the tablet form factor is popular when so many people are indoors.
Also, services revenue grew YoY but it’s the first time it didn’t grow QoQ in a long time, so it seems to have stagnated. Services include a lot of recurring revenue so they should be consistently growing QoQ.
Wearables growth also slowed, this may be the other side of the coin when people are indoors and don’t want to buy a watch for fitness tracking.
My partner and I bought our God Daughter an iPad for her sixth birthday because we were worried about her not being in school. We installed a bunch of educational apps for her. She loves it. We also get to FaceTime with her and our relatives which is fun. I’m sure a lot of iPads were bought for kids stuck at home. (Edit typo)
I just shipped my parents my 2016 iPad with cellular with my unlimited T-mobile data plan. I removed all of the unneeded apps, installed all of the streaming apps that either I had a log in to, they had a log in to with their cable subscription, and the free streaming apps. I put both of their email addresses in Mail. I also put Office 365. My mom already has one of my six accounts.
Since I can’t see them because of Covid, I can now Facetime them. It was frustrating talking to my dad since he is losing his hearing. He can understand me a lot better when he can see me and FaceTime audio is much clearer than phone calls.
Have you considered earphones for your dad? I only ask because my grandmother was quite hard of hearing before she passed away recently and would often miss a lot of the conversation on FaceTime, but once I bought just some standard EarPods for her iPad, she could hear much better.
Sounds like FaceTime alone is a big improvement over the regular phone, but I thought maybe earphones might be even better.
They won’t go near earphones. They think it will make his hearing worse. Whether that is true or not, that’s a hill I don’t want to die on. iOS has a live listen mode too that will pipe sounds from the iPhone (and maybe iPad?) to AirPods.
Ah, that’s a shame. I wouldn’t be surprised if FaceTime gets closed captions in a future iOS release (with all recognition done on device, of course), which I can see being very useful.
Got my nephew the $329 iPad, and its been great. No major complaints. We initially got him a similarly priced Chromebook, as they’re education targeted, but quickly returned. The Chromebook was unexpectedly sluggish and cumbersome.
>Wow, iPad revenue up 31% YoY after being down ~10% in the last few quarters. Similar numbers to a Q1 (holiday season). I guess it makes sense that the tablet form factor is popular when so many people are indoors.
I wonder how much this has to do with the release of iPadOS 13, which has made the iPad a significantly more capable "computer" than previous versions of the operating system. For the majority of users (you don't fall into this category, fellow Hacker News reader), the capabilities of iPadOS are quickly approaching that of macOS.
Personally I regret the new OS features; I find them clumsy and bothersome. I love the iPad overall though. (I’ve been all in on Apple since ‘08 for context.)
iPadOS 13, the new keyboard with trackpad and a cloud VPS mean even for typical HNers the capabilities of iPadOS are quickly approaching that of macOS. For me, it’s totally replaced my laptop. I still need a desktop because a fair number of very specific things are a PITA on the iPad but in general it offers a much nicer UX than my previous ThinkPad.
> For the majority of users (you don't fall into this category, fellow Hacker News reader), the capabilities of iPadOS are quickly approaching that of macOS.
Huh wow, I haven't thought about iPads for a while, but apparently they even added multiple windows (predictably, 5 years late). That's probably the biggest blocker I considered that made tablets a toy even for laymen users (you hardly need to be a leet haxorz to use multiple windows)
Ah, thanks for the info. An unintuitive UI is also entirely predictable for Apple, but I was actually saying that you don't need to be a leet haxor to use multiple windows on a desktop; ie even laymen wouldn't find a window-less mobile/tablet OS to be a replacement without that feature.
The pandemic definitely pushed me to get an iPad. Since my primary source of income is in tutoring in math/CS, being able to draw diagrams with accuracy and share those drawings live with my students has been extremely valuable. Before all this, most of my income was from in-person clients where I could simply grab a piece of paper and pen and draw, now I'm 100% online.
What iPad app are you using for this? And do you also have an Apple Pencil? I also do some math online tutoring, and what I’ve been doing is connecting my iPhone to my Mac, mirroring the iPhone screen on the Mac, and sharing that screen during a Skype call. Then I can use the camera app on the iPhone (mounted on a little tripod) to look down on a piece of paper that I write/draw on. I considered getting an iPad, but even with an Apple Pencil I imagine I wouldn’t feel as free as when drawing on a real piece of paper with a real pen, I’m curious as to what your thoughts on this are
I use Flow on the iPad by Moleskine Studios, it's priced on a subscription (reasonably priced, albeit a little annoying) but a wonderful drawing app. I use an Apple Pencil with it.
I like the ability to easily export documents and send them to my students, as well as the freedom you get with a digital whiteboard––you can drag and manipulate individual pieces of your sketch as if they were magnets on the board in a traditional setting.
The Pencil definitely does not feel like using a regular pen, but it's rather similar to writing on a whiteboard and is rather comfortable to use (you get palm-blocking and everything). If you use the first-party Notes app, you also get automatic handwriting recognition and indexing in iPadOS 14.
Assuming they're currently accepting returns given the pandemic, Apple has a relatively reasonable return policy – 14 days for a full refund provided you repackage everything, so if you find you don't like it you can just return it.
Most of my students are in high school (9-12 grade, age 14-18) during the school year. In the summer, I see more 1st and 2nd year college students since a lot of summer classes are at 2x speed and right now they're predominantly online.
Many high school students have access to CollegeBoard's AP Computer Science Principles and AP Computer Science A programs, which expose students to fundamentals of computing and Java respectively (Principles is more focused on the _concepts_ of programming–sequential instructions, working in teams, etc., while CS A is focused on writing working Java). I've worked with students who do not have access to these classes at their school as well, working with them through a self-study curriculum.
Occasionally, I'll also see middle school students (6-8 grade, age 11-14) who have (or whose parents have) expressed interest in learning to code. I usually work with these students in Scratch then Python, depending on their skill levels, as some schools are even teaching programming classes.
I also get some requests from elementary students, but generally decline those.
My guess for this is the fact that they have a fantastic entry level iPad at a very low price. It's basically the cheapest entry point into the Apple ecosystem at ~$300 (often discounted to $250). And they've shown they're happy to hold this price with the new iPad they released last year as well. Considering iPadOS and support for Pencil, it's a pretty good deal, and I can imagine its bringing a lot of people in.
Picked up this exact one, maxed out the storage but WiFi-only, with an Apple Pencil. It hasn’t obviated my laptop which I do entirely different work on, but it has almost completely obviated my phone since I can route calls through it. I was planning to buy a new phone this year, but seeing as how it gets about 5 minutes of weekly active usage on average since I bought this iPad, which is like 99% camera and 1% Apple Pay, don’t think there would be much point in that.
This has also replaced paper notebooks for me which is what I bought it to do, and I had a pretty sizable book collection on my phone which has been shunted over.
>Services include a lot of recurring revenue so they should be consistently growing QoQ.
You will need to examine Apple's Services Revenue more closely. Apple puts $10/ unit to Services as OS / Map / Siri usage. Considering Apple had record iPhone / iPad / Mac Shipment per quarter.
Google paid Apple roughly $10 per year per Active User as default search placement. Or Roughly $10B per year.
App Store is by far the largest source of Services Revenue.
Considering Apple said in the conference call all of their Apple Services users are growing ( Referring to TV+, Music and News, but we dont know if those are paying members because the TV+ membership could easily be skewed. ). The only variable in QoQ decline is likely App Store Revenue.
80% of App Store Revenue are Gaming. So this suggest people are buying less in game items.
This also might be by design. Apple has to know that Apple Arcade is going to cause less people to spend money on pay to win games. If Apple Arcade encourages more hardware sells, they would be okay with that.
If every single pay to win an advertiser supported game disappeared, nothing of value would be loss.
iPad had a spring product launch last quarter which makes a big difference. The previous generation of iPad Pro was more than 18 months prior. iPad sales are pretty weird in terms of cyclicality since launch dates are so random between models.
Tim specifically addressed the wearables decline as a result of store closures during the pandemic. He pointed to the fact that potential new watch customers prefer to try on the watch and view the band options in person before purchasing, and closed stores means this is not possible.
I doubt this is sufficiently explanatory, but Apple has been giving away 1 year of Apple TV with their iPad purchases. That's arguably the most valued among all their services.
Modifying the news feed algorithm to send less traffic to traditional news sites contributed to a lot of layoffs and general turmoil in the industry. This resulted in major animosity toward Facebook among journalists, which has encouraged them to highlight the negative effects of Facebook. These narratives encourage regulatory action against Facebook, which is now one of the main risks facing the company. I’d go so far as to say this little revenue-optimizing move may be a major cause of the media’s turn from fawning over big tech to trying to take it down. Similar story with the fights over payment for Google News previews in Europe. Squeezing journalists financially is a great example of a penny-wise, pound-foolish move.
The original goal of reducing news prevalence was to show less outrage/clickbait and show more friends and family content. Of course, hindsight shows that the move was of limited efficacy, but it's disingenuous to suggest that it was done in order to 'squeeze journalists'.
I don’t think harming journalists was the motive, but it was the outcome, and in hindsight it seems predictable. At least it should serve as a lesson to anyone who faces a similar decision in the future.
I’m not sure. If Facebook had been more surgical to send less traffic to clickbait listicles, but more to Prestigious Investigative Journalists, would the outcome have been the same? Did the unemployed listicle authors find their passion and become serious journalists working the tech beat?
Facebook traffic is fairly low quality, one time type visits. Any publisher who built their business with a dependency on FB traffic was doomed to fail no matter what if they didn't convert those users to email registrations, subscribers etc..
There’s still a ton of interesting content on YouTube. They have taken down stuff that didn’t deserve to be taken down, but it’s a very small portion of overall content. Other than people who are only interested in watching borderline material, I don’t think it affected the average user much. I can still watch a guy marvel in an endearing Canadian accent as he inspects the manufacturing of a $500 toaster.
And YouTube continued to grow quickly last year, so in the empirical sense it is doing well. The nature of the platform is that it is full of content producers with massive followings. If a small portion of those producers get dinged, they can make a lot of noise, but it doesn’t necessarily amount to much compared to YouTube as a whole.
I think GP's point might have been specific to Trending. Youtube's algo is pretty good at throwing me interesting content from my own subs, but I agree with the GP that the trending list is garbage.
Also, attempting to do broad searches for most news topics simply returns CNN, ABC, etc like clockwork now, and they're not at all the type of content that got Youtube where it is today. It's become more and more MegaCorpTube in recent years.
I hear this argument a lot but it makes no sense to me. Suppose UBI is $12k/year. Then as long as it costs less than $12k to identify a rich person, it’s cheaper to not pay the rich people than to pay everyone.
In fact, we already have any agency that does this for most Americans called the IRS. The budget of the IRS is $12 billion, which comes out to about $100 per taxpayer. The cost of the IRS administering the tax system is less than 1% of the value of the money it raises. The IRS does things like check if people are eligible for credits and deductions they claim, and if they are due a refund. Clearly it’s much cheaper to employ an agency like the IRS to check the numbers than it is to just pay everyone. Increases to the budget of the IRS raise tax revenues, yielding a positive return. And since we already have the IRS, we don’t even need to fund a new agency to do this work for UBI. Compared to the overall cost of the UBI program (trillions of dollars) it would be trivial to fund the IRS to do means-testing. This would make UBI a much cheaper program, so it would be easier to fit into the budget.
I don’t doubt that local welfare agencies are a shitty bureaucracy, and I wouldn’t advocate putting them in charge of UBI.
You're forgetting that the citizens of the US are people, not robots. When everyone gets the same treatment, you get a feeling of unity and you don't divide society into "leeches" and "providers" based on who gets UBI and who doesn't. The UBI becomes part of what it means to be American.
Furthermore, you can solve the same problem just by increasing taxes on the rich. If you send every rich person $12k, but also tax them $12k more per year, the money spent/saved is exactly the same as not sending it to them in the first place. So this statement you made is false:
> This would make UBI a much cheaper program, so it would be easier to fit into the budget.
I’m just responding to the common claim that means-testing UBI would be expensive relative to the expenditures of the program (well-illustrated by the quote “appropriating dollars to save pennies“ in the comment I responded to). This is a quantitative question, not a moral one. I don’t think it serves the movement to be making arguments that are obviously wrong if you do a bit of easy research or math, or just think critically about it. It makes the advocacy less credible. Since most people only read comments online and don’t post, you might not normally get any feedback from those who feel this way.
> Furthermore, you can solve the same problem just by increasing taxes on the rich. If you send every rich person $12k, but also tax them $12k more per year, the money spent/saved is exactly the same as not sending it to them in the first place.
This argument assumes you are identifying wealthy people, so again, it doesn’t support the claim that the overhead of identifying wealthy people will make UBI more expensive.
> When everyone gets the same treatment, you get a feeling of unity and you don't divide society into "leeches" and "providers" based on who gets UBI and who doesn't.
No; it may obscure that distinction slightly but it very much still exists. Anyone who receives more in UBI and other desired services than they pay in taxes will remain a "leach". Those who pay more in taxes than they receive are the providers, without whom the whole UBI system could not exist. (The relevant pre-UBI terms are "net tax payer" and "net tax receiver".)
No that's not true at all. Receiving a UBI and using the income to take care of your aging parents makes you a giver, not a leech. Your attitude is unhealthy and shows how selfish and narcissistic you are.
> Receiving a UBI and using the income to take care of your aging parents makes you a giver, not a leech.
No that's not true at all. So what if you're not the only one benefitting from your UBI payments; they're still coming from someone else's effort, not your own. To be a "giver" you first must earn the things you're giving away. Your attitude is unhealthy and shows how selfish and narcissistic you are.
I had internet access since I was about 10, used the internet constantly though my teenage years, and did great in math and science in school (winning contests and the like). I was also interested in computing and thought it would be cool to know how to code. I even tried to follow some tutorials to learn, but I guess they didn’t explain the tooling so I never managed to run my code. I was missing some tiny experience of running a compiler that would change coding from a thing I’d read about to a thing I’d actually do. I didn’t actually learn to code until I took a computer science class in college. I took it up quickly, and have since had a very good career as a software engineer.
I had the hardware, the aptitude, the interest, and the free time, but it just didn’t happen until I was in the right environment to give me a bit of initial hand-holding. I guess my point is, don’t just throw your kid in front of a computer and assume they will learn to code. They might end up writing fanfiction, playing an MMO, or trolling on 4chan instead.
I’m not the person you responded to, but I’ve lived with a person who had a case of OCD that I’m confident saying is definitely not adaptive. To give one anecdote among many, this person would spend the entire day in the shower because they got a spot of grease on their pants. Episodes of this severity were common (ie. sometimes happening daily for extended stretches of time). They explained the cause of the behavior as a failure of communication between the part of the brain and solves a problem and the part that needs to acknowledge that the problem has been solved so the solving can stop. I don’t know if that tracks with psychiatry, but explanation made sense to me.
What is the long term if not the sum of the short terms?
“Short term bad long term good” is a convenient argument for management in a dispute with shareholders. It allows them to discard the objective measure of their performance in favor of speculation. Ignore the years of stagnant growth and keep paying each of us millions, says management! Our plan is a long-term one, you see.
Short term is greedy optimization. You get stuck in a local minimum, which may - and often is - be a very bad one, compared to other minima you could reach if you had a more long-term approach.
Short term in terms of certain private equity groups getting involved = company gets strip-mined for all its worth and its empty husk is discarded.
If this is true, why does the share price go up? Who is buying the stock after the short-term play? Is the market just dumb, and the only people who know the truth are the disgruntled-ex management who complain to the media about short-termism?
My perspective is that activist actions do incur some risk but have positive expected value in the long run. There are horror stories, but overall they create value, which is why people continue to invest in them.
I agree it’s possible to get stuck in local optima, but it’s awfully convenient for many CEOs to be in that situation. I suppose everyone who isn’t already running a trillion dollar company is in a local optima, if you think about it. It’s hard to blame shareholders for getting fed up after enough years of that and saying enough is enough, maybe you aren’t ever going to climb the mountain and should go to that local optima instead.
Can we step back and agree about our terminology? I'd say that short term is up to a year or so. Most PE plays I've heard about are years-long endeavors.
I think this point is under-appreciated. As the top federal tax rate has dropped over the decades, each additional percentage point drop has given less proportional value to top-rate-payers, while costing proportionally more of remaining federal revenue. In that sense, the lower the tax rate already is, the more expensive a tax cut is to the government. The higher the tax rate already is, the more expensive a tax increase is to taxpayers.
This is why tax cuts under Bush and Trump blew up the federal budget - tax rates were already pretty low, so quite deep cuts to revenue were required to deliver any notable benefit to high-rate taxpayers. It’s hard to make rich people much richer by cutting taxes when they are already keeping most of their income. In the case of the Trump tax cut, rates were already so low it required raising taxes on some to cut for others.
On the other hand, you can go back and find times when after-tax income of top rate payers doubled because the top rate dropped from eg. 91% to 77%, which delivered a lot of relative value to those taxpayers while fitting more easily into the federal budget (although as always, it’s probably more complicated as tax bills make changes to deductions when they change rates).