Investors have a lot of faith in Elan because of his track record of achieving very unlikely challenges (design and mass produce electric cars, design and launch rockets, ...).
The problem is that a lot of its supporters and investors cannot distinguish between solving complicated problems (the ones Elon Musk excels at) and complex problems (the ones Elon Musk is trying solve now: FSD, robotics, etc...).
For reference, a complicated problem is one that you can break down into pieces and solve each individual piece within some tolerance and as a result solve the whole problem. For example, how do I build a rocket that can get X kg of load at a given orbit or how do I design an electric car to transport 4 people 200 miles.
Complex problems are problems you cannot break into pieces and plan for before hand, usually because you have unknown unknows and you have a lot of feedback loops (when you change something it changes something else you though you had already solved). This are the types of challenges Elon is taking on now: FSD, robotics, etc...
What I thought was very revealing though is that Blue Origin's New Glenn mission will actually beat SpaceX to Mars. In fact no SpaceX rocket has ever done anything in relation to Mars.
And starlink is nothing but an evolution of many networks that already exist, most famously Iridium, but couldn't make it work commercially due to satellite cost.
Meanwhile the Blue Origin launched ESCAPADE satellites will establish a 24/7 telecommunications link between the Mars surface and Earth, in addition to their research goals, in September 2027.
Shahed where originally designed and manufactured by Iran. Russians initially bought and licensed them. And I assume are now improving upon the original design.
Russian is top down innovation with a thick layer of corruption. No matter how much you want to claim strategic depth, they are always several steps behind Ukrainians. No matter how many advantages due to size they have.
> Shahed where originally designed and manufactured by Iran.
I'm talking about mass manufacturing, not design. Russia has had capability to hit any Ukrainian factory since Day 1 of the war, that's why they've successfully dispersed and hidden their production so much. Also, I've always been pro-Ukraine.
>they are always several steps behind Ukrainians.
That's not true anymore, both sides have plateaued because all innovations are quickly copied. Anti-recon quadcopters were another Ukrainian innovation that took the Russians roughly 6 months to catch up to. The only advantage they have is size and strategic depth. There isn't much else.
Shahed evolved into Geran, then Geran 2, and now Geran 3 with jet engine, recently confirmed in use in Ukraine by Kyiv. So, Russia is innovating at a high pace. I'm concerned that America cannot innovate so quickly and cost-efficiently. Everything needs to go through tons of red tape, hourly rates are crazy, and the end product is extremely expensive and hard to maintain and evolve. Anduril to me is not America's answer. America needs on the battlefield innovation and means to share feedback in real-time. We're behind! That's my concern.
> The trouble is that AMD just didn't take AI seriously.
Until a couple of years ago, AMD was in survival mode, fighting Intel on one side and Nvidia on the other. Two rivals that were making money hand over fist while AMD was bleeding money.
AMD picked open standards and made investments on open source frameworks and libraries commensurate with their financials, the hope being that the community could help pick up some of the slack. The community, understandably, went with the proprietary solution that worked well at the time and had resources behind.
The net results is that the Nvidia ecosystem has gained a dominant position in the industry and benefits from being perceived as a quasi-standard. On the other hand, open source efforts by AMD or others get viewed as "not serious".
The financial situation of AMD has improved somewhat over the last couple years. So AMD is "taking AI more seriously now". But it might be too late and the proprietary ecosystem has probably won.
For what it's worth, AMD is also incredibly proprietary. The drivers being open source really helps with compatibility and your kernel, but you're still interacting with a massive computer running it's own OS with its own trusted code solution. And that computer also has DMA to your computer.
I would consider their open efforts to be "not serious" for anyone but the consumer space - games, desktop users, maybe even professional text editors. If you're using the GPUs for "professional" applications in a one-off scenario, even AMD falls short.
I'm honestly not sure what the moral of this story is.
AMD's focus was always on pure compute power at a good price. And they always beat NVidia at that game. AMD cards always had the highest hash rate per dollar in crypto mining. AMD has 100% of the console market and the fastest iGPUs by 2x over Intel.
NVidia decided to use gimmicks to sell their cards including texture compression, lighting tricks, improved antique video encoders, motion smoothing, bad proprietary variable refresh rate, ray tracing, cuda and now machine learning features.
Nvidia is fortunate that machine learning has taken off. That is masking AMD winning market share from weak overpriced NVidia 3D products!
You're mashing together a lot under "gimmicks" there.
Texture compression: Useful for games, ongoing work, although I wish they would make cards with appropriate amounts of VRAM
Lighting tricks: Not sure what this is referencing
Improved antique video encoders: NVENC started out with only h.264, but now it supports h.265 and AV1, which aren't antique at all. Niche, but widely used in the streaming industry.
Motion smoothing: The hardware optical flow accelerators in newer cards are important for DLSS, which is a bit gimmicky but works mostly as advertised.
Bad proprietary vrr: No argument here, gsync sucked.
Ray tracing: All 3d games are going to be ray traced sooner or later. Getting a head start on it is a good move, and it's a big head start. The 4090 is ~100% faster than the 7900xtx.
CUDA: No one can seriously call CUDA a gimmick.
Machine learning features: Tensor cores are great.
CUDA isn't a "technology", its a shader language that has been supplanted by better industry-wide standards.... the same standards whose shader languages are compiled by the same Nvidia shader compiler.
CUDA is a moat whose muddy waters has long since ran dry, and you're drinking koolaid if you think its still relevant for greenfield projects.
> and you're drinking koolaid if you think its still relevant for greenfield projects.
So I want to start a new GPU compute project today. Obviously this will primarily be deployed to AWS/Azure/etc, which means only high-end GPUs available are Nvidia. What do you recommend developing this application with?
The way I see it, you would have to be drinking koolaid to use anything besides CUDA.
Why do you think I can't use standard APIs on Nvidia? I literally just said same compiler does both; Nvidia sits on the Khronos committee! They co-wrote the API that everyone uses, that their compiler also speaks!
Vulkan Compute is not an alternative to CUDA. There's a reason PyTorch doesn't provide Vulkan in their official binaries. It's in the source, though--build it yourself, try running any recent ML project, and see what happens.
Thats a weird strawman; compute in Vulkan is a replacement compute in OpenGL and legacy D3D, and as a twin sibling to compute in D3D12.
OpenCL is the actual intended replacement for all the pre-standard APIs, and has achieved its goals. If you want SPIR-V IR, OpenCL allows this and all the major vendor impls support it.
CUDA has no equivalent for SPIR-V, and never will. Nvidia's own internal IR is not, and never will be, documented nor stable across driver versions. This is a massive downside for ML middlewares, as they have no way of directly emitting optimal code that cannot easily be represented in the HLSL-flavored syntax in CUDA.
> CUDA isn't a "technology", its a shader language that has been supplanted by better industry-wide standards
As someone who uses industry-wide standards in a related field...
The proprietary implementation often has the benefit of several more years of iteration with real products than the open standards. 'Supplanted' can only really be evaluated in terms of popularity, not newness or features, because features on paper aren't features in practice until they pay for their migration cost.
That's a wild perspective. I don't know how you can really come to that conclusion either. One attempt at getting Blender to render something using an AMD vs Nvidia card will paint a very very clear picture.
You're entitled to your opinion (which I agree with in broad strokes) but with respect, the op article is specifically about ML. Calling cuda a "gimmick" is silly and completely underestimating the datacenter/ML cluster market share (it dwarfs consumer GPU), and fact of the matter is AMD's CUDA equivalent segfaults. So if "being actually usable to the biggest market" is a gimmick, so be it.
and yet amd lately has been quietly just been slightly less than nvidia but worse product. amd sucks thats just it. their market share is crumbling and nvidias is getting stronger because people are like fuck it, at that price might as well jsut buy the better one that Just works TM
I personally don't have any insider information but just wanted to add what your saying fits with the meta on the gaming community side where commentators are frustrated that nVidia has so much hubris that they think they can just sell essentially last generation level technology without the step up (I think it was 3xxx vs 4xxx or something like that where you'd expect the 4060Ti to be at least as good as 3070Ti) and just trying to make up for it in "software".
It probably takes a lot of confidence in your software developers to make this kind of decisions.
Are they "incredibly proprietary" compared to the competition? Clearly they aren't. Nvidia offers blobs in both consumer and professional markets. Even going to the extent of gimping performance hardware through drivers on more than one occasion.
That said, I think AMD isn't really competing with Nvidia. Sure, their R&D budget is smallish but it feels like they're somewhat fine with the current status quo.
And while they have an open version of the userland, it's also missing features compared to the proprietary one, etc.
Besides, in the end it truly hardly matters whether the firmware is loaded at runtime or lives in updateable flash. It's still not "your PC" in the Stallman sense either way, it's been tivoized regardless of whether firmware is injected at runtime or during assembly. You cannot load unsigned firmware on AMD anymore either, firmware signing started with Vega (iirc) and checksums now cover almost all of the card configuration similar to NVIDIA.
Firmware is also the only way to get proper HDMI support... which is why AMD still does not support HDMI 2.1 on linux. HDMI Forum will not license the spec openly and implementations must contain blobs or omit those features.
Hey, I am not white knighting for AMD here. For all we know, they could only have been pursuing open standards because they've been forced to, as the underdog.
Can we really assign blame to them specifically for not fighting the hdmi forum on our behalf?
Isn't this sort of how specialized hardware kind of works?
At some point, hardware (necessarily?) evolves to become optimized to do one thing, and then you have to just treat the driver as an API to the hardware.
Even "simple" things like keyboards and mice are now small computers that run their own code, moreso more complex devices like sound cards and hard drives.
And since graphics card performance seems to be the bottleneck in a lot of computing, it has become super specialized and you just hand off a high-level chunk of data and it does magic in parallel with fast memory and spits it out the hdmi cable.
For the keyboard/mouse now being small computers that's been true since the 1970s. Almost all keyboards for a period of about 30 years had an 8048 or 8051 CPU. It's how they serialized the keystrokes. From the model M keyboard through to everything up till the USB era.
What OS do you mean? The closest thing I can think of is the embedded CPU that gets called CP in the ISA docs, which mostly schedules work onto the compute units. That has firmware which is probably annoying to disassemble, but it's hard to imagine it doing anything particularly interesting.
Nah. AMD was already profitable in 2018. This is just big mismanagement.
Just having 30 extra good software engineers focusing on AI would have made such a massive difference, because it's so bad that there's a lot of low hanging fruit.
As someone who was pretty invested in AMD stock since 2018, it always made me pretty angry how bad they managed the AI side. Had they done it well, just from the current AI hype the stock would probably be worth 50 bucks more.
> Nah. AMD was already profitable in 2018. This is just big mismanagement.
Hindsight bias much?
How easily we forget in today's speculative AI bubble that AMD rolled into 2018[1] with 6.1x levered D/E and substantial business uncertainty while the Fed was actively ratcheting interest rates up, and ended the fiscal year still 3.3x levered despite turning operationally profitable[2].
> Had they done it well, just from the current AI hype the stock would probably be worth 50 bucks more.
It strikes me as pretty audacious and quite unconscionable to assert "big mismanagement" while simultaneously crying about speculative short-term profit taking opportunities.
As someone who had like 25% of their portfolio in AMD, it was pretty infuriating being forced to buy Nvidia GPUs every single time because the AMD ones were literally useless to me (lack of AI support and cuda in general).
Yes, there's AI hype right now. But Nvidia gpu datacenter growth isn't new. And AMd were asleep
Not asleep; they just directed their efforts at things that haven't worked out. With their APU lines it looked like they wanted to integrate GPUs completely into the CPU - that was hardly asleep to the importance of GPU compute.
The problem they ran in to looks to me to be that they focused on targeting a cost-effective low end market and were caught off-guard by how machine learning workloads work in practice - huge burst of compute to train, then much lower requirements to do inference. That isn't something they were strategically prepared for and that isn't something that software industry has seen before either.
Won't save them from market forces, but their choices to date have been reasonable.
Seriously, look long and hard at those numbers, and when you think you understand what they might mean, consider them again and again until the feeling of insurmountable adversity sinks in and you're on your knees begging public equity markets for an ounce of capital and a pinch of courtesy faith...on the promise of meaningful risk-adjusted ROIC to be delivered in just a few years.
> But Nvidia gpu datacenter growth isn't new. And AMd were asleep
...which is why this remark comes off as sheer arrogance (no disrespect).
Su and the rest of AMD leadership certainly weren't asleep. The difference here is while you're busy scouting speculative waters defended by competition with deep battle pockets and an even deeper technical moat, Su was simply preoccupied bringing a zombie company back to life and building up enough health to slay a weaker giant.
Personally, I was already beyond impressed with one miracle delivered.
>As someone who had like 25% of their portfolio in AMD
>Nah. AMD was already profitable in 2018. This is just big mismanagement.
I guess you know they have debt, and they were paying them off, and were battling with other issues all the way till 2019 / 2020 when Intel had their misstep so they could gain something in the CPU server market?
Yes. And they still could have afforded 30 software engineers to work on ai/compute painpoints.
But let's asume they thought it was too expensive back then. There's still no reason not to invest in software in 2020 when their gross margin was absurd.
Yup. Have 15 of those software engineers contribute pull requests to PyTorch to make its OpenCL support on par with CUDA and take the other 15 engineers to do the same for TensorFlow and AMD would already be a serious contender in the AI space.
I'm not so sure anymore. The big reason is that now that the ML framework ecosystem has fragmented into different "layers" of the stack, very few people are directly writing CUDA kernels anymore.
As a result, with things like XLA now supporting AMD GPUs using RoCM under the hood the feature gap has closed A LOT.
Sure, Nvidia still has the performance crown lead with CuDNN, NCCL, and other libraries providing major boosts. But AMD is starting to catch up quite fast.
> it might be too late and the proprietary ecosystem has probably won.
Compiler ecosystems can and have changed rather quickly. Especially given that most NNs run on a handful of frameworks. Not _that_ many people are writing directly on top of CUDA/cuDNN.
Make an equivalent toolchain that runs on cheaper hardware and the migration would be swift.
Currently AMD hardware is a bit behind and the toolchain is frustratingly buggy, but it's probably not as big of a moat as NVIDIA are trading on. Especially since NV's toolchain isn't particularly polished either.
>AMD picked open standards and made investments on open source frameworks and libraries commensurate with their financials, the hope being that the community could help pick up some of the slack.
This has been their claim, but more often than not they haven't actually done anything to encourage the community to pick up slack. So many of their graphics tools have been released with promises of some sort of support or of working with the community yet have basically had nothing to help the community help them.
Even accepting the unreasonable idea that they can't afford the full-time developers for the various tools and libraries they come up with, they often don't even really work with the community to build and maintain those.
One of the bigger cases which contributed to turning me off from AMD GPUs was buying a 5700XT at launch, eager to work on stuff using AMD specific features, only to be led on for over a year about how ROCm support was coming soon, every few months they'd push back the date further until they eventually just stopped responding at all. Trying to develop on their OpenGL drivers was a similar nightmare as soon as you wandered off the old well worn paths to more modern pipeline designs.
Another glaring example would be Blender's OpenCL version of Cycles, which was always marred with problems and hacks to work around driver issues. They tried to work with AMD for years before finally just dropping it and going for CUDA (and thus HIP) even though AMD's HIP support, especially on Windows, is still in a very early state.
They've been getting piles of money from Ryzen for 5-6 years now. How long am I supposed to wait?
According to the latest ROCm release notes, it supports Navi 21. Well, at least the pro models. It doesn't even mention the 5000 or 7000 cards. My current understanding is that 7000 support is mostly there a few months late and 5000 was abandoned partway done after years of vague promises.
At least it might support windows soon. Not my sub-4-year-old GPU, of course, god forbid. But most of the rest of them.
AMD wasn't very profitable until 2018. The company's debt to equity ratio was terrible (due to previous CEO mistakes 2000-2012) until they paid off their huge debts with Ryzen 3 in ~2020. Be patient, grasshopper ..
> They've been getting piles of money from Ryzen for 5-6 years now
Hardware is very capital intensive. They've not been making much until much more recent. From 2012 through 2017, almost all years were a net loss. They hit $1B net profit only in 2020. I imagine quite a bit of that money went into keeping/accelerating the pace of Ryzen, and paying off debts. Only now do they have more breathing room for other endeavors. If they diverted a chunk of that change to AI, they probably would have a lower performing Ryzen right now.
> Why should middle class in the West vote to allow outsourcing to cheaper countries?
Because you can run but you can't hide. If you institute protectionist policies, you will in turn become less competitive. Hence, you will require even more protectionist policies, that in turn will make you even more uncompetitive. In the end, you will have higher prices for lower quality domestic products.
I don't like gravity, but it doesn't mean I can ignore it and jump from tall buildings. While economics is not an exact science (probably not even a science), you cannot ignore its principles.
If protectionist policies worked, we would have figured out by now. The truth is that limited protectionist policies might work to give a push to a nascent industry in the short to medium term. But it does hurt the country as a whole in the long term.
> If you institute protectionist policies, you will in turn become less competitive
less competitive against whom? If West had not shipped its factories to China, I am sure West would have still stayed competitive against China by miles. In fact, by shipping its technical know-how for manufacturing, West has allowed China to become more competitive.
> I don't like gravity, but it doesn't mean I can ignore it and jump from tall buildings.
Sure, but outsourcing is nothing like gravity. It is a mixture of greed on part of corporations to reduce labor costs, naivete on behalf of politicians who thought China and others would welcome Western values along with Western jobs and stupidity on part of voters who traded short term cheap junk for long term stable jobs.
In the 1960s, US auto-makers appeared content to make crappy, unreliable cars until Japanese imports (also crappy at first) came in and improved quickly, putting pressure on the domestics to also improve.
Consumers have vastly benefited from that competition, far in excess of any losses from the domestic automaker labor group.
It’s not entirely voluntary, but if you want to see what protectionism and economic isolation will bring, go visit Cuba. Then hop over to Grand Cayman, Grand Bahama, or Puerto Rico to see what being more integrated but competitive has to offer.
If Japan had completely decimated Western car markets, had conflicting values with the US and posed a geopolitical rivalry, I would still have preferred crappy cars for the Western societies. After all, West didn't strengthen USSR via trade when there was a cold war.
Also, if the long term cost is "Western lifestyle regressing to mean" (original context I replied to), I'd still prefer crappy cars to preserve well-paying jobs.
My belief is that "isolationist economies fall well below the mean" in the long-term. If you want a comfortable Western lifestyle, you don't want to isolate yourself from global trade, but global trade means you aren't isolated from global competitive pressures.
> if you want to see what protectionism and economic isolation will bring, go visit Cuba
Hasn't its neighbour and biggest economy in the world been levying an embargo on Cuba for over half a century? Doesn't seem like the appropriate example for your argument.
It's exactly a (forced as a political matter) economic isolation situation. North Korea is another politically isolated economy. I don't think they're doing very well either.
Trade helps poorer nations more than it helps richer nations, but it helps both.
There are billions of people living under worse regimes than Cuba, yet only it and a handful of other nations have been on the receiving end of US sanctions. This was devastating to its economy (prior to the revolution it was of course Cuba's biggest trading partner).
There is no justification for the embargo. It was Cold War aggression, pure and simple, now sustained for the last decades purely because of electoral reasons.
I completely agree politically, assuming Cuba is no longer willing to host missiles or other non-defensive military apparatus from an adversarial nation.
>Sure, but outsourcing is nothing like gravity. It is a mixture of greed on part of corporations to reduce labor costs, naivete on behalf of politicians who thought China and others would welcome Western values along with Western jobs and stupidity on part of voters who traded short term cheap junk for long term stable jobs.
Agreed. Fundamentally, if you want to institute protectionist policies for labour, you also need capital controls to prevent all your businesses from exporting their operations to avoid these policies.
Stock brokers track perfectly the transfer of people rights to stocks millions of times a day without any decentralized ledger. In fact, a SQL DB has worked quite well for many years now.
If the wine cellar wants their customers to trade wine, I'm sure a centralized ledger based on a SQL DB would be much easier and cheaper to implement and scale to millions of transactions.
Yeah, that's surely trustless. And I totally trust the wine company to perpetually maintain and pay for such a thing, and totally not restrict the secondary market as has happened all the time.
> In fact, a SQL DB has worked quite well for many years now.
When you allow people to write their own smart contracts, bugs will happen. This can't be fixed, only dampened with a weakened interface to the blockchain.
When a bug in a smart contract happens you may now have a dispute, across borders, over the intent of the smart contract and the actual behavior.
Can I trade my wine in the weekend? Ah no, sorry, stock market is closed then.
Can I trade my wine at 5pm? Ah no, European wine stock market is closed then.
When you really 'own' the ticket, you can trade it anywhere you want, without being dependent on some exchange that's only open whenever and takes some fixed cut without any competition.
The fact that you can't trade on weekends is not because some technological problem, it's because there's no demand for trading on weekends. Do you think the technology suddenly stops working on weekends?
The community around Electron still has specific expectations. With an actual framework of their own they can safely make maintaining compatibility with the APIs their products use a top priority and also introduce questionable and Windows-specific things which probably aren't welcome in Electron.
Originally, SQL was sold as a way to make programmers redundant by allowing business people to write their own reports.
In theory, with SQL any executive could write his own report instead of having to wait for weeks for those pesky software guys to write the reports.
For many decades, different waves in the industry have tried to bring tools to the market to allow non-programers to write programs. The thinking is that the tooling or the grammar are the obstacles for regular people to write programs (applications).
The issue is that it is not the syntax or the tools that are the barrier. The barrier to write programs is that the author has to thing about all possible states and conditions and handle them. That requires patience and a certain mindset. If you are not able/willing to be that exhaustive, you will not be able to write general programs. Conceptually you could write programs (or web applications) that have been narrowed to very specific choices of workflows with most of the conditions already taken care of for you.
Creating a website with drag-and-drop tools is not that difficult; until you start to consider: what happens if the user shrinks the window below certain width? What happens if he views the site on a phone? What happens if I have to change the length of a piece of text?
Prop 13 doesn't change the property tax rate, it changes WHO pays the full
"nub" rate and who enjoys a "nobility" rebate.
It disincentives home owners from moving, even when their new jobs are far away, increasing commuting time.
It also creates a resource allocation imbalance. Folks that are retired and don't benefit so much by living in highly concentrated job areas tend to remain there. Even when younger people who would benefit more from living in these areas would be willing to pay more, providing an incentive for retired owners to move to a less concentrated area and making a profit.
But with Prop 13, we have instead a system that artificially distorts the housing market(and not in a "just" or "deserving" way).
Do you feel that it is fair to evict an old couple because they purchased their house in the 70s when it was in the woods, but now that people have built up a town around them, they have to go because they didn't plan on paying $7,400 per year in property taxes in their retirement planning, and then also can't afford to take on a new mortgage in the region, so move really far away from where they saved for and planned for retiring?
Or they could sell to a condo developer, get a brand new unit, with lesser maintenance needed, in the same location. It doesn't have to be a binary choice between "sell and move away" and "stay and keep prop 13".
With Prop 13 and zoning restrictions, "sell to an upzoner" is essentially off the table.
Also an old couple who have been renting since the 70s could be evicted until state-wide rent control was passed this year. No one cared about them this whole time.
It's also not clear what things like commercial properties or family farms have to do with "keeping old people in their homes". All these are covered under Prop 13.
And don't forget non-primary residences. Not only prop13 "helps" you to stay in that old estate of yours that you may not be able to afford with increasing taxes, it also allows you to keep the cabin (or two) in Tahoe.
Just curious, are you in favor of statewide rent control too?
> Don't conflate Prop 13 and SB50.
The existence of Prop 13 has created a large class of voters opposed to rationalizing zoning laws - such as by SB50. It benefits these people to restrict housing supply, and Prop 13 ensures they don't pay the cost. Prop 13 is one of the root causes of all of California's housing supply issues.
> A well-funded campaign is useless against pissed off voters.
The re-election rate of incumbents in California state senate districts approaches 100%. Getting into office in a district of a million people is about money, nothing else.
Nothing bold about it. Nothing correlates as strongly as campaign contribution, especially in enormous districts.
The voters matter less than you think, largely because in these huge districts there will be an incredibly diverse range of opinions. Short of ordering troops to come in and murder people in broad daylight, getting such a huge number of people to coalesce around any single anything almost never happens.
I never say it is fair to evict them. What is unfair is to have a two tier tax system: one for nubs and one for the established.
The noob faces a double whammy, he needs to put a lot of money for the house and he has to pay a higher tax rate (and he has to live there because his livelihood depends on it). The established has an incredible investment in his home with a big market value giving him many options.
So a retired person should be forced to move from his little 3 bedroom house because some Googler decided the house next door was worth $3.5MM and his property tax goes up to $75,000/year? That's pure evil.
>> So a retired person should be forced to move from his little 3 bedroom house because some Googler decided the house next door was worth $3.5MM and his property tax goes up to $75,000/year? That's pure evil.
Nope. A retired person should have the CHOICE to pocket the $3.5MM the Googler is ready to pay for his house in Palo Alto and buy an even fancier house in Livermore knowing that his property taxes is not going to substantially change much.
But with the present system instead, another Googler, let say the food service employee, will never be able to pay the mortgage for a one room apartment PLUS exorbitant "nub" real state taxes. At least the retired guy has a large amount of equity in the house and choices.
Well, I don't have the feelings of "envy" that you do. The fact is, there's little he can do with his "millions of dollars of equity" unless he moves far away from family, friends, and social network. It's cruel to force people to move. I'm not envious or cruel, so I support Prop 13.
He doesn't have to move far and away, he can go live to the other side of the San Mateo bridge and pocket at least a million dollars on the house price difference.
And as others have mentioned, there are other mechanisms to defer the tax payment based on the house equity.
The real cruel thing is to lower the bar for the "have" (as in have a house in SV) and higher it for the "have not".
I guess at the end of the day those who own property will do what feels good for them.
It’s funny to see non owners seem up of ways property owners could do with their ‘wealth’.
Guess what, they own property in the hot Bay Area market by virtue of..wait for it..being here and working before most of us were born!
So we can sit here on hacker news and think of all that they need to do to make us feel better, but it means nothing, you know. It’s like the French peasants wondering how Louis XIV should redistribute his kingdom to them. There are no victims. They aren’t the villains...they are just old folks who want to continue to live and die in the towns they funded and built and not be bothered by kids who were likely educated in free public schools they helped build.
What a ridiculous take. Besides, the problem of people wanting to remain in their existing homes is trivially solvable by deferring property taxes as liens against the property to be paid on the death of the owner. Average property tax in California is ~1%, so a person could live an entire lifetime without having to pay anything. But of course that was never the real reason anyone supported these absurd initiatives. It was always about rent-seeking.
Sorry. It doesn’t work that way. You can’t tax people for living in the properties they own. Property taxes are just another way to ensure that one never owns their homes 100%. Leins? Who in their right minds would agree to this?
When you want someone to part with their money or wealth, you have to give them a reason to do so. ‘We want what you have’ is not a good reason. It becomes a punitive tax and is based on coercion.
I see no valid arguments or offers that would make people agree to higher taxation.
The have-nots want to take more from the haves. This has happened many many times in the past. It comes from lack. Not logic.
> You can’t tax people for living in the properties they own.
We have to do this if we want to allocate land properly. Land is an exclusionary good, so one person owning a piece of land means that someone else can't own it.
Imagine a society with no property tax. What prevents one (or a few people) from buying up all the land, holding it indefinitely, and then charging arbitrarily high rent to everyone else? Property tax forces people to sell if they using it inefficiently, and makes sure that few aren't able to take land and exclude everyone else.
When you want to take what’s someone’s property and make sure you want to ‘allocate’ it to someone else who wants it..it’s called redistribution.
They used to send people to re-education camps to ensure it happened smoothly. We may not have re education camps here in CA but asking senior citizens to accept punitive taxes so they would feel incentivized to move to the country so land can be reallocated is the same thing.
And yes, ‘one or few’ people will buy up everything and hold it. It is the nature of property rights. To have rights over ones own property. If you want to rewrite that, we have to change what America is about..
Being able to live in your property is not ‘using it inefficiently’. Wanting someone’s property ..otoh..is theft.
> When you want to take what’s someone’s property and make sure you want to ‘allocate’ it to someone else who wants it..it’s called redistribution.
No one's property is taken, they'll just sell it on the market to whoever can pay the most. That's not redistribution, it's called markets (what America is build on).
I think we fundamentally disagree on economics, so I doubt we'll come any useful agreement here unfortunately.
However, one thing I wanted to note is that Milton Friedman, one of the most libertarian modern economists thinks property tax is the best tax [1][2]. If a libertarian economist thinks a policy is good, yet you're comparing the policy to authoritarian socialist countries and re-education camps, you may want to consider that your mental model of economics/definitions of common words is extremely off base from how everyone else uses it. The Conservative Party in UK did the same thing, where they called land value tax (essentially what I'm arguing for here) a "Marxist tax grab", even when Marx opposed it!
In general, using words to mean the exact opposite of what everyone else considers them is not a great strategy.
Even ignoring that, I think claiming that property taxes are the "same thing" as re-education camps is a fairly tone-deaf statement to make (and one most readers would consider wrong), and it only serves to weaken the rest of your argument.
[1]: in his words, the "least bad tax", but that's equivalent, since he considers taxes to be required
Right. I don’t think we will agree on economics because I have a degree in economics and my thesis paper was on Milton Friedman.
Secondly it is not market forces when the govt has to interfere and impose more taxes to make sure homes become affordable to the working class by snatching away the economic net of the non working retired class. In fact, it is the exact opposite of ‘Markets’. It’s a freebie by the govt to the govt educated public school kids who became adults. The kids who grew up in public schools are doing what they were taught to do. Redistribution of common resources and wealth. Socialism sits uneasily with free market forces. An imposition of an INCREASE in taxes is not the same as imposing a tax.
Friedman speaks about land value tax on unimproved land. And that the property tax thus collected should be used for public services like law and order, infrastructure and essential services.
Almost 85% of the property taxes collected is used for public system. 45% of California state budget goes to provide free public school education for everyone regardless of whether they pay taxes or not to the tune of 10-12k/child per annum. It is also used to cover unfunded pension liabilities of these public school system teachers.
I am pretty sure you haven’t understood what Friedman suggested and this was read from some Bay Area real estate sponsored article from a click bait’y rag that has nothing to do with economics or Friedman or libertarian economics.
There is zero economic logic is in trying to alleviate housing shortage by taxing retired property owners on fixed incomes except to displace them..aka drive them away to make space for public school educated young people who despite having earning power are not mobile enough to educate their kids in quality schools because California’s educational system is a Ponzi scheme. And no one is paying attention to it because the schools did not do the job of actually educating these kids in..I don’t know..subjects like economics.
Current workinh populace can not afford to buy properties from older folks. Because they lack the purchasing power. So the mob wants to increase taxes so old people who don’t gain anything from public school funding will leave.
This is exactly what is known as ‘cutting the nose to spite the face’ because what’s good for the goose is good for the gander. The only winner is the govt that gains more taxes from property, income(because only the wealthy can now afford to buy and most of their income is going to income taxes, property taxes, sales tax, gas tax, road tax on top all the other special taxes, parcel taxes, business tax etc). It’s like in the casino..the house always wins. Why anyone with a modicum of understanding of economics cannot see this beggars belief.
The problem is relating property taxes to public education budgets. The problem is the speculative nature of real estate and allowing foreign investors to speculate on California real estate. The problem is the lack of TRUE purchasing power of the Silicon Valley grunt workers allegedly making hundreds of thousands of dollars in income but have little to show for it. The govt is taking them for a ride and they can’t see it because the critical knowledge of evaluating a bloated govt’s economics is conveniently left out in the public school system. And I suspect..by design.
Density benefits taxes. Taxes are ‘good’. The purpose of a tax increase is to make it unaffordable for retirees to continue living in their homes and to displace them. It doesn’t pay for any services. The govt acts like a henchmen so housing stock is cleared and made available for the highest tax paying demographic. So they can collect more taxes. Let this sink in. I repeat. Let.This.Sink.In. Milton Friedman ..trust me on this...wouldn’t approve.
Anyone in this situation can easily take out a home equity loan to pay the taxes and come out way ahead. Your assertion that the higher taxes would force them to move is wrong.
These 2 scenarios aren't equivalent. Land is an exclusionary good; you using it means I can't. Equity is non-exclusionary. Additionally, the city has to provide services to owners of land, which requires money. The government has no such obligation to owners of equity.
Yes, land is exclusionary but there is plenty of it in the US. People in California just don’t want to live there.
The government also has to fund services to everyone who works there whether or not they own land. Do devices cost more to home owners based on the value of their land?
I thought the purpose of tax was to fund the government. Not to take stuff that other people wanted.....
How are they "economically efficient"? It doesn't cost anymore to serve someone in a million dollar home than a $200K home. Besides that you get into situations where richer neigborhood have better services, better funded school systems, etc.
One obvious difference is that property taxes are applied uniformly and predictably --- a whole industry exists to plan around them --- and eminent domain is not, so widespread application of ED would create uncertainty that would discourage positive activity.
What’s “predictable” about having to pay taxes on a property that you don’t know how much will appreciate? Someone who bought a house 30 years ago while they were working, paid it off and had enough in savings to pay their bills but not pay taxes on a house that went up 10x the rate of inflation couldn’t predict their tax bill.
What happens when they can’t pay their taxes? The government takes it.
This is an unserious argument. ED and property taxes aren't comparably unpredictable. An obvious illustration of this would be the fact that most places in the US don't have California's cap, and people manage tax planning just fine. If your real argument is, essentially, "taxation is theft", that's a coherent position, but since most people don't agree with the premise, you're not left with much to contribute to this particular discussion.
No, I’m not saying that “taxation” is theft, but the undercurrent of raising property taxes on people who have been living in their houses for years is that the land could be better use by “more productive” tech bro’s than old people and if you raise the taxes enough, they would be forced to move.
Those same tech bro’s would hate it if they were taxed on unrealized, illiquid wealth.
But, yes there are plenty of jurisdictions that give property tax breaks to senior citizens.
This is how property taxes work pretty much everywhere else, dense and sparse, tight housing market and loose. It doesn't seem to be causing a crisis anywhere, unlike California's policy, which is implicated in an actual housing shortage.
In addition to what tptacek said, taxes are paid with money which is an infinitely fungible commodity. Eminent domain confiscates a specific piece of property that cannot be precisely replaced.
I'm glad you've come around to my p.o.v. on property taxes!
The pros and cons of a mark to market capital gains tax are pretty far outside of the scope of this thread, so I will save my thoughts on them for another day.
This is obvious when you consider the fact that a person who owns a piece of property outright pays the same property tax as someone who owns a similar piece of property but carries a mortgage.
Does a person who owns a $1 million dollar home "consume" more resources than a person who owns a $200K home? What if the homes are the same but in different parts of the city?
This is not a good argument. It would be the equivalent of me asking:
Does the trash pickup service, repairing potholes or patrolling the street cost more if the home owner just moved in than if has own the house for 30 years?
Well, that does argue for my previous stated idea of charging every property owner the same fee for the same service.
Trash pickup is actually a great example. Where I live it’s not part of your property taxes. It’s a separate bill and everyone pays the same amount.
The city council can set budgets for the different departments and set taxes based on the budget. Neighborhoods already do something similar via homeowner’s association fees and condo fees.
You could make that argument about any property (e.g. art). I guess your definition of "consumption" is "having something someone else doesn't"? But that isn't what most people mean, I think.
Edit: I think a tax on imputed rent could maybe be considered a consumption tax, and it would indeed make sense for it to be higher or lower depending on the location of the property. But a tax on the value of the whole property is not, because it also captures the value of the property as an asset. So that's why I think your argument is too broad.
Yes, there's a consumption component and a non-consumption component. Of course when either component goes up the total goes up. But the tax is on the total value and therefore it's not a consumption tax.
Yes, I understand this point but the ratio between rents and property values varies wildly. So yes you can compute an average ratio and say it is "equivalent" to a tax on imputed rent if you adjust by that ratio, just as you could average out the number of bathrooms in each house and say it is "equivalent" to a bathroom tax. But it's not a very compelling argument!
Sure! Here are some things that could cause the rent/value ratio to be significantly different for a single property:
- There is no usable building on your property.
- There are plans to build a highway through your neighborhood in five years.
- Amazon has announced plans to build an office in your neighborhood two years from now.
- There are harvestable (with further development) natural resources on your property.
Many of these have impacts on hypothetical future consumption, but hopefully you agree that a tax on anticipated future consumption indefinitely into the future is not a consumption tax.
I don't have data as to precisely how strong the correlation is, but I think it's pretty clear that it is not 1, and furthermore if we really wanted to tax imputed rent directly we could presumably do so (we'd have to guess what it is but the same challenge applies to valuations of properties that haven't sold recently). So I just don't think "consumption tax" is a good way to look at a tax that clearly captures, and is designed to capture, other things.
I don't have data as to precisely how strong the correlation is
I'm actually pretty curious now, and might be go looking for data. It's surely not precisely 1, but I bet it's not all that far off. Especially if you limit the sample to residences.
Your list of outliers is a good one (I particularly like the natural resources one), but I think they're probably mostly exceptions to the rule.
In the end though sure, property taxes aren't precisely consumption taxes. But they clearly aren't wealth taxes either. They're something in between and, I think, much closer to consumption that wealth.
I've really enjoyed thinking about the points you brought up. Thank you for doing that.
The cost of police, fire fighters, schools, roads, etc. don’t go up with the value of the home. There is no reason that you couldn’t charge a flat rate to every property owner - including businesses.
The cost of all of these things do increase with the value of the home, because the labor required to do it gets more expensive. The individual house price doesn't contribute to this but overall housing costs do.
SF has had an explosion in property values and thus struggles to find teachers, firefighters and police officers at the salaries it's willing to pay.
How so, taxes are meant to fund the government and services they provide. Everyone who lives in a jurisdiction either consumes those government resources or we as a society have decided that it was in the common good to provide those services (ie education).
You could allow for partial tax deferral until home ownership is transferred(sale, death, etc). So, retired person keeps paying $100/month while their neighbors are paying $10000/month for the same exact services, but if they accrued $150k in taxes by the time they died, that chunk is taken out of the sale price of the home.
It's also pure evil that a retired person can't sell his 3 bedroom house to a quad- or 5-plex developer, not move (except temporarily while it's being rebuilt), and get a nice chunk of cash, because his other neighbors don't want the "neighborhood character" to change.
The problem is that a lot of its supporters and investors cannot distinguish between solving complicated problems (the ones Elon Musk excels at) and complex problems (the ones Elon Musk is trying solve now: FSD, robotics, etc...).
For reference, a complicated problem is one that you can break down into pieces and solve each individual piece within some tolerance and as a result solve the whole problem. For example, how do I build a rocket that can get X kg of load at a given orbit or how do I design an electric car to transport 4 people 200 miles.
Complex problems are problems you cannot break into pieces and plan for before hand, usually because you have unknown unknows and you have a lot of feedback loops (when you change something it changes something else you though you had already solved). This are the types of challenges Elon is taking on now: FSD, robotics, etc...