A lot of people in here are saying - oh I had to do this is Germany or Denmark or USA as well. Which is fair, but what irks me is that in India which has pretty high taxation in all departments (see Petrol/Gasoline) the tax you pay gives you ZERO benefit. No healthcare, education or unemployment benefits etc. Also on top of this, due to the corrupt system, if you need anything from any govt. agency you will need to pay a bribe anyways (e.g. registering an apartment, even getting a passport).
TBH, I am a big fan of taxes, I am happy to pay even 50-60% in taxes if that means my fellow human is not left hungry or without healthcare or without a roof on their head. In India this is not the case, high taxes, with no benefits to anyone (except the government and their friends).
I think what you're missing is that a vanishingly small proportion of the population actually earns enough to pay income tax and there's a breathtakingly huge number of relatively poor folks. A lot of services are massively subsidised for these folks but there's a billion of them.
The whole Indian railways network is massively subsidized but it's doubtful anyone on HN would travel by anything other than air conditioned if indeed they travel by train (eg. I've never travelled by train after i began working).
In many states, basic groceries are effectively free. The less well off folks buy from these, the "middle class" shops from private traders. However there's a massive number of the less well off.
Not saying there's no corruption, but the scale of the problem is massive.
I think perhaps you are conflating no services for the upper 20% of society with no services. But the gulf is very wide in India and the population is massive. 354 million people in poverty!
India's food assistance programs, free education, and healthcare are amongst the most used on the planet.
Examples from Wikipedia:
- The Indian public health sector encompasses 18% of total outpatient care and 44% of total inpatient care
- Free lunch programs for underprivileged children: "Serving 120,000,000 children in over 1,265,000 schools and Education Guarantee Scheme centres, it is the largest of its kind in the world"
- Universal healthcare targeted at underprivileged: "PMJAY and the e-card provide a coverage of Rs. 5 lakh ($ 6860) per family, per year, thus helping the economically disadvantaged obtain easy access to healthcare services."
- 550,000 ration shops providing subsidized food
Please do not generalize your own experience to that of 1 billion people.
I wonder if the GP is complaining about the delivery of said welfare because at least on paper that welfare should be happening. Yet GP believes there are nearly zero benefits. Therefore, I wonder if there is a "disconnect" between what is suppose to happen and what actually happens on the ground.
This is exactly it. On paper the government schemes are all well thought out and cover a large percentage of problems. The issue isn't in coming up with schemes, it's the implementation which is extremely lacking. So most of the money that is supposed to go into these schemes, end up being illegally pocketed by those in power. This is in addition to "paying a bribe" which most anecdotes talk about.
India is country with lots of poor people, so sometimes that money is not enough to have decent services for upper middle class citizens not feel like paying a lot for poor services. It is one of the problems of my home country, corruption is problem as well, but sometimes you're just paying lots of money because lots of people are paying nothing or very little.
It's a myth that the lack of government services are solely due to lack of funding or budget deficit. One of the original complaints in the thread was about government-provided healthcare and education. Government schools & hospitals exist, but they aren't exactly known for their quality apart from a few niche ones like IITs, IIMs, AIIMs. So is the issue that lack of funding is preventing these public services from being effective? We could look at any independent report to find the problems. A search on this issue brings up https://yourstory.com/2017/09/india-public-education-system?..., it's not thorough report but it's a start.
This brings to light another problem - unlike the developed countries, in India the average citizen doesn't even know the specifics of things that can be improved because there are hardly any independent organizations which raise awareness about specific policies, or which publish easy to digest reports for the general public to become better informed.
Previous generations of populist governments could be blamed for their short term thinking and political appointments to the dismal state of the Education system.
It is a sector that really needs an upgrade and much of it requires very little money but the attitude of teachers and curriculum.
This doesn't contradicts that lack of funding is a problem, at least in the country from where I come public school teachers are usually underpaid and it can be hard to attract and keep the good ones without it.
You realize literacy in India is still < 80% ? This is true even in the state of Karnataka, which possesses the so-called 'Silicon Valley' of India, BLR, which ironically is located in the midst of a vast plateau.
In comparison, China which started out it a much worse economic position (WWII, CCP..), and with a far more difficult writing system, has ended up today a >95% literacy rate.
I realize people like to downvote these pessimistic comments, just because 'India is the next superpower', the 'great hope of democracies' that will take PRC', but how this can happen without any groundwork is something I can't comprehend.
It takes a whole 20-25 years for a generation to grow up. The tiny sliver that is being reared are very good at servicing people by emigrating to other countries and this is how India (like Phillipines) earns much of its forex. How they can turn into a 'superpower' by turning themselves into a country of glorified serfs is beyond my understanding.
Worse yet, Indians themselves are sucked up to this drunken madness instead of focusing on real problems that have remained unsolved over the past ~80 years either due to political incompetence, or worse conscious decision-making.
Public schools have been abandoned by everyone but the very poorest - the facilities are terrible even by 3rd world standards, and worse, the public schools push the eduction in the native languages, which is (very sadly) next to worthless economically in India.
The above disempowerment of India's natives, their culture and languages, is the direct result of the Indian state continuing colonial policies of very unfairly advantaging the Anglicized elites, educationally, socially, politically and thus economically.
Now that the state has completely failed in its duties, yet again, it has passed a new RTE act, in which it further burdens private schools, targeting esp. those run by Hindus. The Indian state in all its 'secular' glory, decided also to favor the Christian missionary schools, the very ones that were instrumental in destroying the country (and China), by sparing them of the same burdens.
The Indian political estd. and the state is disgusting. Quite frankly, the British for all their faults, atleast knew how to keep a public-schooling and university system running. The 'Brown Babus' are little more than self-conceited idiots wearing fancy suits.
> worse, the public schools push the eduction in the native languages, which is (very sadly) next to worthless economically in India.
I hear this a lot but does it have to be so? AFAIK China, Japan, and South Korea also educate students in their native languages and that hasn't hindered their development.
It isn't a straightforward parallel because those countries have universal (or near universal) language homogeneity. Even with the exception of China, there isn't nearly as much variation as there is in India (e.g. here are some languages from an Indian banknote: https://puu.sh/GGwOj/3537211eb7.png).
So, the closest thing India has to a universal language is English. If you don't learn that, you won't be able to communicate with a significant population, even discounting international relations.
As someone has mentioned in the comments in this thread, it is easy to pass laws & schemes sitting in a comfortable office. The implementation which takes resources, efficient distribution, competence and leg work is another story.
Anyways, I do not want to be too critical of anyone. My knowledge is limited to a few families I know and the few cities I have lived in. India is huge and hard to describe in a few sentences.
Finally, to clarify, I am not the guy who would buy an iPhone or go to Dubai. I am a lowly programmer, happy with my $250 Android which I use for 2-3 years.
Are taxes really that high compared to other countries? India has a tax to gdp ratio of 10%, compared to 25% in the US and 40% in the EU. Maybe you are underestimating just how much taxes are required to fund an effective welfare state?
A mid-level manager / programmer would pay around 20-25% in taxes.
Plus, Current GST (VAT) rate in India is 18% for goods and services like most countries. There are reduced rates 0%, 5% and 12% for some goods and services, and 28% luxury rate for some items.
And finally, other tariffs on things like iPhone, computer parts, cars etc.
in the US paying 60% in taxes is equivalent to 'not contributing your fair share" which is why Biden wants to take it even higher. I'm surprised how US has some of the highest income taxes (especially in places like CA and NYC) but people still think it's a low tax place.
> It is no secret that the taxes and duties that are applied to imported phones are highest in India. The taxes are so high that for an important iPhone that you will end up paying an average tax of Rs 24,000 for something like an iPhone 12 or iPhone 12 Mini.
> However, despite the sky-rocketing prices, iPhone still sells best in India and the buyers give whatever price Apple asks them to pay. So for a business, that is not a bad deal at all.
Not really a good deal for Apple. More like an amazing deal for the Indian government.
It's a term people use to either be funny, or it's because they're somehow offended that people from USA use the demonym "American" even though there are other countries in the Americas, yet despite the fact that no one else in those countries seems to care because they have their own demonyms they use.
The former are just having a laugh, and the latter are looking for things to be offended by.
I don't know which camp the GP falls into but I'll be charitable and assume they're just being silly.
I don't think you know many people from Latin America. A lot of them will absolutely not like American to refer to the USA only. Especially as the USA imperialism has done so much damage in many places there. It is not as strong as say the Macedonian debate but it is very real.
That may be the case, you're not wrong about what the US has done in Latin America. That said, I've never in my life heard anyone from Latin America call themselves American. Now that's just my experience, so I'm open to being proven wrong.
When I lived in Costa Rica for a time, I was only ever "Americano" and everyone from there were "ticos" or "costarricense." Though to be fair, Costa Rica has pretty much been spared of American meddling.
Well I for one (born in Venezuela and moved to Italy) used to be mildly annoyed when italians used the term "americano" to refer people from USA, and used to tell them "I'm also american". In Venezuela I used "estadounidense" [1] and in italian it would be "statunintense" the proper form, but almost nobody uses it.
Now I'm used to it and don't mind it anymore and this is the first time I've heard of the term USAian and find it quite amousing but I don't think it will catch on.
America isn't a continent. We have North America and South America. We typically refer to the grouping of those two continents as 'The Americas', but not America. At least not that I've ever seen.
In the U.S. we do 7. Maybe in Venezuela or Brasil they do 5?
I guess that's one of the things that confuses me here. If you're from Europe you can be European because that's the continent you're from. If you're from Canada you can be Canadian or North American, but you can't be American because that's not a continent. I mean I guess you technically can, but it's a bit of a lossy term to use. It isn't specific enough. Do people from Bangladesh or Pakistan think of themselves as Asian, or Pakistani?
I guess as I see some of this discussion, it strikes me as very arbitrary and resentful, and also not very consistent.
> USAian and find it quite amousing but I don't think it will catch on.
Yea I saw it and had to do a double take because I thought it was USAsian. I think at least in English it won't catch on because it doesn't flow very well.
In East Asia, but especially in Taiwan, Japan and China, people from the USA are usually called American. Normally, when asked, I state I’m from California or the US.
I think it’s just a language thing here. It’s easier to say America than it is to say USA or United States.
I’m sure Canadians and others get quite annoyed from that.
I usually say the same. I’m from X or I’m from the United States.
If you’re Canadian you’d say I’m from North America, not America. If you’re from Brazil you’d say you’re from South America. The same would be true of Americans. You’d say you’re from North America. That’s the continent. If you are going to go down that route.
Do Mexicans, Canadians, Brazilians, and others really consider themselves of the region of the Americas and not from one of the two continents? I just don’t get the organizational structure that’s used. You wouldn’t say you’re American, that’s for sure. You’d say you’re north or South American.
Yes, in my Latam country they taught us there were 5 continents: America, Europe, Africa, Asia and Oceania. However, we call ourselves latinos or something else, really.
You and the people of Latin America are making a language category error though. The people of Latin America speak Spanish (and perhaps Portugese), and the Spanish word "America" means what it does in Spanish. But in English, the word "America" refers to the USA. It doesn't make sense to complain about words in other languages that you don't speak.
You acknowledge what America means when you use the English word "Americas" to refer to the regions within North and South America, because in English that is the word to use and has the other meaning.
The same logic applies to "football", btw. The vast majority of English speaking people refer to soccer as soccer. That people who speak other languages use a word in their language that sounds like "football" to refer to soccer does not give them standing to sound off on what Australians, Americans, and Canadians call soccer. There is room for the British to bicker about it, but they are a distinct minority among English speakers.
In Brazil is usual to hear in more educated circles the denomination "estadunidense", which is essentially the same thing as USAian. Or north-americans, when talking about the culture from the standpoint of Brazilians.
It's far from true that no one cares.
I doubt that the taxes from import of electronics is significant enough for it to be a 'great deal' for the Indian Government. I think their intended purpose is to promote/protect local manufacturing.
I get the protectionist aspect, but are they re-investing the money from this tax to make manufacturing desirable in the country?
We're talking logistics improvement, stable electric grid, infrastructure and training programs to get an educated workforce. Or is it just contributing to some bureaucrat's pension fund?
In the same vein, I 100% agree with fuel taxes and green taxes... if the government can demonstrate 100% of the tax goes to finance alternatives that are useful to me.
So does this mean that presumably, going forward, when the factory starts working at full capacity, the taxes imposed will be lower, and hence Apple products will be cheaper in India?
A $149 IntelliJ licence costs $176 including taxes + there is a 3.5% processing and currency conversion charges imposed by by credit card. Converting to INR I may have to shell out Rs. 3.5k to 4k extra which has dissuaded me going for an All Products Pack and settle for the Ultimate license.
Certainly there is an inflection point where demand meets a taxed price that would cause Apple to build a factory in India. If Apple is not currently building a factory in India, then that point has not been reached and the result is just higher prices for Indians.
The tax isn't just designed to make Apple and others move to India, it's to give an advantage to local manufacturers over foreign ones. Now whether or not local phone companies are starting/growing in India as a result of this tax, I don't know
Price elasticity of demand isn't linear. Something that is a Giffen good at a lower price may well have negative marginal demand if the price rises too much.
I came to say this, but since you already said, another information:
Some years ago a lawmaker calculated the taxes for game consoles and concluded they are 273% of the US price.
Also when Sony was heavily bashed for the price of Playstation 4 at launch, people claiming they were price gouging, Sony blamed taxes, so I went and calculated the taxes myself, as if my store would sell it (I own a store but sell other stuff). End result was that Sony wasn't lying, 71% of the final price was taxes.
Yup. It's actually remarkable to me that the Brazilian government continues to add these taxes that, last I checked, were highest in the world.
The original justification was that it would spur domestic manufacture of computers, consoles, laptops, etc.
Obviously that hasn't happened. All it's done is make anything involving computing ridiculously expensive.
I truly don't understand why there isn't democratic pressure to repeal the insane import duties on electronics. It's like most people in Brazil have just accepted that's how domestic prices are without really questioning it. I don't get it.
There was a time when I was trying to run an actual journalistic quality blog about gamedev, and I interviewed a bunch of people, some of them almost slipped out stuff, and one talked to me off the record, basically he claimed a certain Brazillian company that has a license from a certain japanese company to manufacture some 8-bit and 16-bit consoles, lobbyed very hard for the tax increases on imported consoles (something that didn't helped them, most of their income come from Karaoke machines now).
And later on I found out that a lot of employees of that certain brazillian company have connections with the government, for example one of them worked for that company and worked for BNDS, and while still in both of their payrolls went on a speaking tour to explain how the government was being great for the local game industry by offering loans at low cost for game companies... when I went to check, the game companies or had government friends, or family (for example one of the "game companies" the government helped, that never made a game, had the son of the president as shareholder).
I also once foolishly helped an "activist" that was promising to represent Brazillian gamers to lower the taxes, I even printed the logo of his campaign on my own company t-shirts and promo materials, and printed his logo on an Arcade machine I built.
After he got inside the government and the negotiations started, then he immediately proposed a tax cut only for physical stores, and massive tax increases for online stores, specially Steam, this made people investigate his life, and then find out he was shareholder of physical game stores... Thankfully his effort failed (thankfully because what he was proposing would make overall taxes higher instead of lower, also it would result in censorship of a bunch of stuff).
I wonder if this is the NES-clone company you're mentioning is the same one that also lobbied for imported cell-phones to be taxed harder, and of course tried to prevent Apple from selling the iPhone in Brazil by registering its trademark.
Same in tiny Uruguay, but it's even more preposterous to say that they're trying to protect or incentivize a local consumer electronics manufacturing industry.
As a thought experiment, you could take the concept of tariffs and apply it to an ever decreasing geographic area. Maybe my city should try to protect its jobs and industry and therefore levy a 100% tariff on goods made in other cities. Same for my neighborhood or city block.
Ultimately, it's also a tragically regressive tax. Wealthy families that regularly travel to Miami or New York don't suffer much from it -- they just buy their electronics there. They may even make some money by bringing some home and selling the goods for much more than they paid.
If you're poor and you need to buy a laptop or phone on your meager salary, you're screwed.
I grew up in Brazil near the border with Uruguay, and we’d always cross the border to buy our electronics at the duty free stores. It was massively cheaper than buying them in Brazil.
Are duty free stores only present in border areas?
Tariffs and taxes are an addiction. Extremely easy to implement, difficult to repeal. That money collected is being used by someone and they will fight to continue receiving it.
Prices of electronics are insane in Brazil. I'm Polish, so we don't have as cheap electronics as US does, but still. I tried to find a laptop for my Brazilian friend and the prices were often double the prices of here too. Not only that, but they were the older models, e.g. a laptop here with SSD and GTX 1650 would have HDD and GTX 1050 there for twice the price.
Many stores in Orlando, Florida cater to just these middle-upper class Brazilians who takes these trips. In fact, it is not uncommon to speak/respond/switch between English/Spanish/Portguese in shopping malls.
Is there a reason for that other than just tradition/history? Sometimes when things differ from our norms, there may be a reason or an advantage that we are unaware of. Just curious. Thanks in advance!
>Is there a reason for that other than just tradition/history?
Probably not. Just like the Japanese number system (as distinct from counters for objects) where 1000/10000 are special units.
Even in English, the counting was not consistent. Isn't billion supposed to be 1 million million in the UK ?
Lots of the urban population in India is adopting US millions and billions in everyday language too, so I'm sure the global American monoculture will eventually overwhelm the local counters at some point.
I don’t know anyone in England that means million million when they say billion, especially people working in finance or tech. I wonder if there even are any places that still use billion = million million.
> American English adopted the short scale definition from the French.[3] The United Kingdom used the long scale billion until 1974, when the government officially switched to the short scale, but since the 1950s the short scale had already been increasingly used in technical writing and journalism; the long scale definition still enjoys some limited usage in the UK.[4]
Recently even YouTube switched to this numbering system. For some reason I prefer old one for view count but I cannot see myself counting money in millions/billions anytime soon.
I understand taxing an optional luxury item like iPhone to encourage local manufacturing, with all the cheap phones available it won't affect the common man too much. But the government here is bent on taxing everything as much as possible. Eg: The Prime Minister keeps harping about "Digital India" but computer components and laptops have an import duty of 80-100%. Does he have the money to build a fab in India ? Hell no, but tax processors at 80%. Talks about "Artiphisial Intelligence" in his speech and annual budget, but taxes GPUs at 80-100%.
The rich and middle class have workarounds for these duties by asking friends and family to bring them things from US, but its the poor who's children suffer the most. Poverty is not a problem in India, its a design feature, keep people poor and stupid, loot them all you want.
Most people who have the resources or skill to leave India are doing it anyway. Policies like these will only serve to expedite it. This country will likely be next Venezuela.
PS: This is not a political statement against the present government, every political party here has done and will continue with this stupidity.
Govt and low cost schools have outdated or sometimes no computers at all. Internet is the best means of learning today, they are deprived of it.
Heck even top universities don't have good infrastructure in India.
Our maid's daughter wants to take up CS after high school, she saw us working on laptops from a young age I guess, but her mother cannot afford to pay for college fees + a laptop + broadband.
India's silicon valley, Bangalore, cannot provide its residents uninterrupted power 24x7 in 2020, villages are lucky to get 5 hours of power a day. Can you believe large tech parks in Bangalore run on Diesel generators ?
There are hardly a few datacenters and associated jobs in India, reason - hardware and bandwidth is prohibitively expensive, cause - taxation. Think of all the small jobs that would be created in the surrounding ecosystem (foodcarts, cafes)
When the govt only talks and doesn't walk the walk, most high skilled Indians leave country due to lack of opportunities, not only would their spending create jobs more importantly it drains the country of mentors for the young.
China is going head to head with the US in AI and world class software products, despite their handicap in English, where is India ?
I had a friend who was unemployed and really going through a shitty spell. Then the news that you could go to Miami buy a PS4 and resell here came up. He started doing this all the time, and then going to the parks and whatnot. Eventually he started living there and working in tourism. Finally, he arranged to bring the capital to open a tourism agency in Miami and stay there for good.
Last time there was a hurricane I texted him and he said "yeah, we boarded up the house; I'm living at a Disney hotel for the time being".
On a much smaller scale, this is achieved in the US by going to a no sales tax state like Oregon or Delaware.
With the sales tax in Los Angeles at 10.25%, I’ve ended up queuing up large purchases together, buying a round trip ticket to Portland ($200-300) and hitting up the Apple Store, Target, Best Buy there. And get a free trip to Portland!
I’ve read the Christiana Mall in Delaware is especially popular for people living along the I-95 corridor for this very purpose.
People will actually fly in from China to go to that mall in Delaware and buy cases of phones. They used to pay local college kids to go get them (because there was a limit), but then the store just got rid of the middle man and allowed them to buy in bulk.
Yes. But Is this still happening though. Apple has lowered iPhone prices in China, so that if you exclude any sales tax and import tax, China now has the cheapest iPhone 12. ( Or Apple is making less money per iPhone sold in China )
Part of the reason why Apple is protecting its Services Revenue.
Don't you have a "use tax" that you're legally obligated to pay sales tax locally as per the rates in force in Los Angeles even if you buy something from another location? I recognize that legal requirements and common practice are different.
Haha, I looked into doing this for an avionics upgrade for a light aircraft I used to have a share in. Apparently the taxman actually has time to chase down people who fly their aircraft around for tax reasons.
To be clear, we wound up doing the upgrade in California where the aircraft was based.
I think state governments go after large purchases, like (pricy) wedding rings, aircraft, cars, or anything like that simply because that's where they'll get the biggest return.
It might be an urban legend now, but I've heard of a soon-to-be-married couple purchasing a wedding ring in Portland, OR, and making several trips from SF to Portland. They took photos of the ring at typical Portland attractions (Mt. Hood, Multnomah Falls, food carts), and did that for several months. Doing that, after adding up all the flight/hotel tickets, was still cheaper than buying the ring straight up in California.
At least a few years ago there was some bogus California tax thing where they added some money your tax bill assuming you were buying things online and other places without paying sales tax.
Here in Brazil people think tax is theft, and that avoiding taxes is moral...
Problem is, often they are not wrong, there is massive government corruption, and taxes are often used for unethical and wrong things, meanwhile actual services are often paid by the population themselves.
For example: my family pay all our business and whatnot taxes correctly, because we don't want to get dragged into a crime spree (if you are avoiding taxes you open yourself to extortion, and from extortion to other crimes...), yet my parents paid my education until I was 18, I paid my own education after that, the street in front of our house, we bought it, literally (was crazy expensive too since our house is in a corner). The phone lines? We also paid for that, when we moved in there was no phone in the neighbourhood, but since we had a business we needed phone, so we paid people to install the cables for us. Deliveries? All done with private companies, the public service is crap. Police? We often pay private security, all times we had to call emergency, it didn't work (in one egregious case: we told the cop someone broken in violently in a neighbour house, the cop replied on the phone, literally: oh sorry, my shift today has few people, and we don't want to risk our lives, so we won't go), fire? Same shit, calling for the firefighters worked ONCE for me, and was because the road itself was on fire, all otehr attempts failed, many they didn't even picked up, my parents house did got damaged because of it (someone tried to burn trash in a field behind the house, it burned our backyard that was full of fruit trees, and burned a neighbour house down, and damaged a ton of other houses). Health? Well, that is one thing that works more or less right... still most of my healthcare I paid for it, the government healthcare is prone to make stupid mistakes and kill people for stupid reasons (for example the hospital nearest my house killed a guy by giving him insulin AFTER he warned them he was allergic, they didn't believed him and though he was some kind of conspiracy anti-vaccer nut and was using allergy as excuse).
And the list goes on, and on, and on.
Whenever I argue against taxes, people reply with a list of: "Oh, you don't use X?" and then I reply: "Yes, I use it, and pay it as a private service" the only thing I don't pay a private service for, is the military.
Sorry but asking people to pay sales tax on something you bought out of state is just ridiculous to me. There was a transaction between me and state A, not state B. Just because I live in state B doesn’t mean they’re entitled to the sales tax. They were never a party to the transaction, they’re just of the belief that I _would have_ bought it in state B if I didn’t have the option of going to state A. This isn’t a morality issue, it’s the state government being mad that I have options to cut them out of the loop.
In California it's gotten so ridiculous that almost every city has its own sales tax [0]. This leads to some mild arbitrage where if I live on the border of LA County, I can go over to any city in Orange/Ventura/San Bernardino County and immediately save 3% off the purchase price.
To expect every taxpayer to keep track of where they've purchased items and pay a use tax so that taxes are going to the right places should not be on the burden of the tax payer. I'm a happy taxpayer and willingly will do so to fund our civic services and public goods, but not when the sale never occurred in the area where I purchased the item. People will find and exploit loopholes the minute they are revealed.
California (and some other states) have already gotten around this by requiring new cars registered to pay a tax adjustment if it was previously registered from another state. I don't think the state government just has the time or resources to do that for all purchases.
How convenient that you're an expert on the resources required to govern one of the top economies in the world. I suppose California should adopt a pay-what-you-want model, given the prevalence of such experts.
In Argentina, pre pandemic there were people that actually went shopping to Miami, because getting anything Apple - be it an iPhone or a laptop - was cheaper that way.
The iPhone 12 is not for sale here, but let's use the iPhone 11 as an example. In the only "official" store I could find it [0], the price is 184.299 pesos (yes, 184 thousand). If you check the "official" US dolar rate [1] it is around 80 pesos.
But hear me out: The country has so little reserves, that officially buying dollars is limited to 200 dollars per person per month. If you buy something using your credit card outside of the country - be it online or in person - this limit does not apply, but in both cases you have "extra" taxes to pay (Buying or spending dollars is called "dolar turista"). the final rate for this is around 137 pesos (again, [1])
Let's use 140 as the CC rate, for rounding. Considering the same iPhone 11 is around 630 dollars in Amazon, the price in "dolar turista" is 88.060 pesos.
that still leave us around one hundred thousand pesos left to the current street price of the phone. considering I can currently get tickets to Los Angeles [2] for around 60K pesos, that more or less gives me ample room for having a short US holiday when getting the phone (Supposing I can get the VISA to enter the country ;) ).
BTW the reason for this phone to be so expensive is that there's a black market rate for the US dollar (Called the "blue" dollar) and it's rate is currently around 180 pesos. Using this rate, plus the normal taxes and stuff when importing things, we get close to the street price.
I have often heard the anecdote of Argentinians flying to North America for shopping. But why is Chile not used for these purposes? Chile doesn’t have the import-substitution policies of Argentina, and in my visits to Chile I didn't feel that the country was not significantly more expensive than the USA.
Argentinians do go to Chile to get electronics. We just hear more often about them going to the US. Perhaps more go to the US for tourism, with a side benefit of cheaper electronics.
AS pradn stated, there was as well "shopping turism" going to Chile. Actually I just did a cursory search, and there was something posted an hour ago [0] about this.
South American countries bend over backwards in order to not tax income, so consumption gets taxed to ridiculous levels and these absurd situations arise.
And a foreign reserves crisis doesn't help either.
In Argentina thats not true. In fact you need $44.000 for a family to dont be considered poor. But if you earn more than $50.000 you start paying income taxes.
Does this tax work actually work? Surely the amount of people who actually pay the tax is near 0 and they'd get far more tax revenue from a lower tax rate right? I'd actually bet that this tax in particular not only doesn't raise money, but is a net-negative tax-wise as you're forcing people to spend their incomes on flights/hotels out of the country they otherwise wouldn't and they probably buy other things on their trip too.
From living in Chicago these forms of taxes seem so counter-productive. The pattern seems to be that a budget needs to be balanced, so they come up with a new consumption tax that conveniently assumes that the level of consumption stays the same with the new tax in place, but it never ever does.
It's so frustrating because once a tax gets extreme enough that almost no one pays it, lowering/removing it would benefit everyone including the government. It's one of those rare things that can be fixed instantly at no effort/cost with only positive results, yet it won't get done.
I think taxes are utterly broken in this country. For starters this one "supposedly" is a tax for a special group of people (That is, those that for whatever reason spend money in foreign countries) but the reality is that a large group of Argentinians do shop outside of the country.
Besides that there's a huge discussions since a lot of years ago, because the amount of money you have to earn in order to start paying taxes is rather low, and they don't get updated often. Add to that inflation and the end result is a lot of people paying a lot of taxes (And the government being very lazy catching up updating those taxes).
This is not a tax issue, but induced by existence of dual exchange rates. I'm guessing due to the limits, most phone resellers have to obtain their US dollars from the black market at higher rates, resulting in higher local pricing. Only those who are well-connected or buy dollars in low volumes can get adequate sums at the official rate, and even then, the arbitrage opportunity may be too good to miss out on, which results in prices close to black market rates, regardless.
People have been doing this since before dual exchange rates were (re-)introduced a year ago. There's a bit of everything, really.
- Some shops operate at the "blue dollar" value, out of necessity because they buy the products they sell at that rate, or trying to obtain a bigger profit from the things they bought at the official rate.
- Some shops operate at the official rate, but their products just get crazy high taxes (cars, for example).
- Some shops operate at the official rate and sell their products at that rate approximately. Some big tech manufacturers fall under this category, Apple products being the biggest exception as shown above (but there are many others). Fun fact: the inflation and the option to pay these products in no-interest instalments sometimes make products cheaper than in the US, accounting for the future devaluation of the peso.
The article excludes the cost of import duty, and other taxes (see daedalus's comment). It is a false argument to say that if I didn't pay tax things could be cheaper eg. if I break the law I can get a cheaper iPhone.
Getting caught for breaking the law is a stochastic system, but the expected value is lower than most people think.
Edit: How far are people willing to take this? Should we share an article saying someone got a free iPhone by buying a machine gun and stealing a truck full of iPhones? Where is the efficient frontier of breaking the law vs cheaper goods?
I don't know what the actual rates are in India, but I remember some 10-15 years ago I bought a bunch of camera gear from the US because it was much cheaper than buying it locally in France.
The delivery was via UPS or Fedex so they handled the customs. In the end, paying VAT and taxes (which were levied on the whole price, including shipping!) it was still cheaper than buying locally.
One of the products was a heavy tripod and head. Another fun fact about this: the tripod was actually made in Italy by an Italian brand...
I tried declaring a $3k server equipment once at Mumbai airport. Exceptionally difficult to pay the correct amount ($1k or so - it was 7 years ago so amount might be off) and get a receipt, they wanted me to pay $50.
True, but they often put stipulations on it. I know for Singapore, you had to have owned the item for at least 3 months. Otherwise it was considered to be a new item imported and duty needed to be paid.
Property is theft from the commons - and here this is doubly untrue: the taxes are a reasonable level on a global mega-corporation with millions of people in near-slave conditions.
I wish the article went into the cause of the price difference. Is it high import taxes/sales taxes/etc., restrictions that make the phone harder to produce or sell for the Indian market, or just Apple deciding to charge a sizably higher markup in India than elsewhere?
Its mostly taxes and duties, though Apple products are generically costlier in India. When Apple used to charge for OS updates, if you paid in Indian Rupees it would be somewhat more expensive than you would expect for exchange rate considerations.
Apple still does some ridiculous differential pricing cherades. As a developer, you don't get to set the price for your product and in app purchases for the global market, you give them a price in dollars for US, and Apple will adjust the price as they see fit for each market you pick.
In Pakistan, to prevent this, you either can only buy a cellphone whose IMEI was registered with our regulatory authority (when it was imported via official means), or you can register a personally imported phone with absurdly excessive taxes, which makes the whole point moot.
(btw you can only buy a SIM that's linked to our national identity card, so the sim will just not work. There is a six months grace period for foreign visitors)
This means that device options are very limited and prices are absurd. You can buy a small car for the price of an iPhone, for example. We easily pay atleast 20%-50% premium on the same device from india, despite having similar economics.
Similarly but without COVID-suppressed airline prices, I remember back before Creative Cloud reading that it was cheaper to fly from Australia to the US to buy Creative Suite
Decent article explaining the prices, and also the influences of taxes and import duties. But the author kinda makes it sound like it’s Apples fault for their price ing in India.
Really the government’s fault for imposing such high duties and taxes. I just don’t understand it from a morality perspective .
Semi-related story: I flew to Uzbekistan through Dubai last year for vacation. Waiting for my backpack, I saw something that blew my mind: locals who arrived with me taking all kinds of TVs, ovens etc. from the conveyor belts.
It never occurred to me that you can fly somewhere, buy big stuff and have them checked in as your baggage. It's not something I ever saw in Europe's airports.
(Not sure if reason was more the price, or lack of availability of goods; probably a mix of the two.)
Since the article lists prices in INR: The price of the iPhone 12 Pro in India in USD today is $1,615.22, and the price in Dubai is $1,140.15. So it must be possible to fly round-trip to Dubai for less than about $475, which seems plausible.
There are actually quite a few regularly scheduled flights to Dubai from India that can be acquired cheaply - a not-insignificant amount of the area’s migrant workers originate from India.
The calculation is not as simple as that. Any imports above INR 50K (about USD 676), while traveling back to India by Indian citizens, attract import duties (of 35% or so, IIRC). So the $1140.15 device, when it lands in India, would attract a duty on the excess amount. Of course, people may not declare it at customs or may try to claim it's a used device (while not having any other phone), but this is the official law.
This goes for many products and services, because of different tax and import rates.
From Europe it is often still cheaper to fly to a different country to buy clothes, electronics, etc. Problem is that you still have to pay the import tax once you cross the border back into your own country.
Hence why many airline crew ran (run?) side hustles of buying and selling luxury goods, since they were (are?) rarely checked at the border of their home country.
Can't you just buy some electronics, throw away all receipts and such and simply claim to customs that you had it already for a while?
For example, when I bought my Audio Technica ATH-M50X in the US for about $100 (while in my country they were about twice as expensive) I just had it around my neck as I was listening music through it. No one asked a thing.
In all fairness, I went to the US for fun and got a chance to use them at a demo and was immediately sold.
illegal doesn't mean very much when customs is about shaking you down, stealing your stuff, and making you pay bribes. Every time I've traveled to Africa for example, I've had to give customs officers some stuff and money. It got so bad that I was buying Bluetooth speakers and duty free gin just for them.
Unless you are willing to get arrested or beat up, or worse, for your beliefs, then yes.
If you are not willing to play the game, you will not just be systematically disadvantaged, you will be crushed.
In such a situation, you play the game. You play it because you have no choice.
I've been kidnapped by the police, I've bribed perhaps dozens or even hundreds of people. I've paid off government officials, I've gotten offers to kill my enemies (haven't crossed that line fortunately), etc etc. When the inmates run the asylum, you have no choice in becoming crazy.
This one hits me close to home, it was the same way back then in Turkey.
To describe how bad it is: Recently a popular politican tweeted Playstation 5 costs 8299₺ in Turkey, which is more expensive than booking a flight to Bulgaria, having a modest stay and buying Playstation there. This is a country where minimum wage is 2300₺ ($290) and around half the country is being paid that amount. iPhone 12 Pro? Base model rumored to be $1900.
Oh, and cars cost around 4 times more expensive, so a second hand 2007 Ford Fiesta costs around 15 times the minimum wage.
But hey, voters were happy and they've been happily voting for the same guy for 20 years. There must be some 'folk wisdom' there but I certainly missed what it is.
This sort of thing is quite common in a lot of places.
Years ago I remember that I wanted to buy one of those Rock Band sets for Playstation that came with the whole band. But they were so expensive back in Brazil, that I did the math and it was the same price to fly to Miami, book a hotel for the weekend, buy the set, and come back.
The author has made this too simplistic and avoided the point about customs duty on imported goods brought in person. The duty free limit for returning Indian citizens for travels longer than three days is INR 50K (about USD 676). Anything excess of that amount will be taxed (edit: import duty applied) on entry at around 35% (IIRC). People may avoid declaring items or may bribe customs officials to get away with this, but the numbers put forth by the author are incorrect.
Consumer taxes are supposed to be applied only once, so if you are going to go the legal route and pay them on arrival, in many (all?) countries you can also claim the tax money back when leaving the original country with the ticket at the airport.
I'm not talking about the taxes paid in Dubai, in this instance. Whether one can claim it in Dubai or not depends on Dubai's laws. I've seen countries with VAT or GST have this provision for tourists. On the other hand, countries like the U.S. don't have such provisions.
I'm talking about import duties payable in India for goods above a certain value, even if they're brought in person by someone who has traveled abroad.
The price difference are huge, even when you compare from Germany, however, it’s important to note that iMessage and FaceTime are most likely disabled on iPhones bought from UAE. At least that was the case back in the time.
Not only healthcare costs, but also national pension costs. I remember a study was done a long time ago (20 years ago) and smokers were a net contributor to the gov't coffers.
They paid a lot in cigarette taxes (even when the taxes were lower).
Those that got lung cancer didn't cost that much to treat because, well, there weren't great treatments. Lung cancer progressed fast enough that they might spend their last week in the hospital, but that was it (versus say Alzheimers where they might require a handful of years of institutional care).
They contributed to their national pension their entire life and then either died before collecting it or died less than a decade in.
Not being specific to NY or the US. This is not good when illegal/fake cigarettes are readily available. With these cigarettes, none of the entities(tobacco farmers, the government, smokers) will benefit from smoking.
Cigarette taxes are overwhelmingly paid by the poor, and impact them disproportionately. They do not have a significant impact on the smoking rates (people who would have quit due to the price already have) and there’s no data on how that tax money is spent to offset the externalities.
Yes, perhaps raising the taxes wouldn't stop more people, but lowering the taxes may encourage more people. One could imagine that having no taxes may make it easier for teenagers to start smoking, for instance.
While I can squint and say that iPhones are probably a luxury item, and hence worthy of higher taxes, these exorbitant taxes extend to laptops as well. I'm again not talking about Macbooks, just a cheap ASUS I might need for work or study. This I think is indeed counterproductive, considering that bulk of India's GDP comes from the services industry.
Enabling the populace to acquire computing resources cheaply will help if the powers that be want to establish a knowledge economy.
Is the author sure that he wouldn’t be subject to taxes when re-entering with something bought elsewhere? Pretty sure that this is the case for at least some cases.
I don’t understand the difference in the pricing between the base iPhone and iPhone pro. It’s 50000 Rupees which is about $700, although in the US it’s only $300.
Even $300 is a big premium for what you get. Basically just an extra camera and a LIDAR sensor that nobody knows what to do with yet. Oh, and a shiny stainless-steel band around the edge.
I think what Apple has realized is that a certain subset of their customers will always want the best model, no matter how little sense the price makes compared to the regular model. For some people, it will always be a status symbol (or an enthusiast's obsession). Or they're of the economic class where $300 just doesn't even register on their budget. As one reviewer put it, the 12 Pro is "the shiny one", and for some people that's all it takes.
What this amounts to is that these whales can subsidize things like the $400 SE model, which is an incredible value. And I'm completely fine with that arrangement personally.
I would add to that a brighter screen, the base has twice the storage and the pro has better camera capabilities (that could actually be claimed to be 'pro'). When you equalise the storage, the price differential is about $200.
Across the board, companies seem to be willing to accept lower margins in the US (perhaps it doesn't matter as much because of scale and competition).
And on the other hand, other countries tend to have higher corporate taxes and higher cost of doing business, and that gets passed on to customers in the form of higher prices.
Note that the UAE restricts most VoIP, so devices purchased in Dubai will not have FaceTime.
This piece of taxation engendered tidbit is getting too much attention in India. Now it’s on HN front page.
It’s seems unlikely but I wouldn’t put it past Apple.
OTOH I don’t mind these high taxes, for a country like India an iPhone is indeed a luxury, if only the tax money didn’t go directly to party funds and offshore accounts one way or the other.
US tariffs tend not to be on consumer goods though, right? Also, I'm curious how much that number has changed over the last 4 years. Were we also at the top in 2016?
Many decades ago, macintosh prices were so high in Brazil that it was cheaper for me to fly to Miami for a weekend, (regretfully) watch the phantom menace, cheerfully watch the mummy, buy the damn mac, fly back, and pay duties at the airport, than it was to buy it in the country.
I remember when I lived in Germany, it was cheaper to fly to US and buy the highest end MacBook there, and fly back, instead of buying in Germany. The price was the same number in USD and EUR, and this was when EUR was strong.
If people were willing and able to fly, the free market would close this arbitrage by ... driving up the cost of flying to Dubai. The other prices are controlled.
The article assumes you will not be paying the import duty charged in India i.e. you're bringing an open box/you own the iPhone you bring from Dubai. If you were to start a business bringing in phones in bulk you would have to pay the import duty after transportation and logistics cost which would leave a negligible margin for you. It can only be viable if you choose not to pay the import duty in which case it's smuggling (if you're bringing in with intention to sell).
people flying to dubai on different days across different flights to buy a couple iphones for themselves, or even as speculators, would not make a big enough dent
Apple will more likely correct the pricing discrepancy to sell more iphones in India themselves
At least with Brazil, in practice you're allowed a single personal computer and phone. If you come back to the country with both your old phone and new phone you'll have problems. But if you leave without a phone or laptop, and come back with both, without packaging, with apps and files loaded and everything, and claim you'd brought them in Brazil originally, you're fine. So that's what people do.
If you have a legitimate need to bring multiple devices to and fro, at one point there was a form you'd fill out at the airport when leaving where you'd put down serial numbers and they'd verify on return.
With something like a PS4 it might be a little riskier, but you could probably spin some kind of story they'd accept, as long as it appears similarly used and not in packaging. ("I was visiting family and my nephew wanted to play PS4 so I brought mine for the week!")
>With something like a PS4 it might be a little riskier, but you could probably spin some kind of story they'd accept, as long as it appears similarly used and not in packaging. ("I was visiting family and my nephew wanted to play PS4 so I brought mine for the week!")
Or you could say that you run Linux on that PS4 and that's your main PC.
You have an allowance for "personal goods", such as a phone [0]. In this case it's probably borderline illegal (IANAL), but I suppose people would throw away the box and everything while abroad.
Whenever I flew in France from outside the EU no one asked me where I bought my phone, laptop or camera. Anecdotally, several times I was carrying camera gear bought from the US because it was cheaper to pay for shipping + VAT + taxes than buying locally...
Which country? My friend just told me that the stuff they ordered in bulk from China to Europe entered the customs area in Hungary. In theory the customs rules are the same wherever you enter the EU, but I guess these companies have found a "port" where the checks are more lenient or less rigorous (saving time and money, not go to around the law).
From anecdotes only, German customs are thorough, they check every parcel, and this is not the case all across the EU.
I'm sorry but other than brand value, what do Apple products get Indian users that simply cannot be got from other companies?
If the price from a trillion dollar company is this costly, then vote with your wallets for god's sake. Simply don't buy. There are (fortunately) plenty of viable alternatives to Apple that are more reasonably priced.
It's cheaper, but not by much. I checked apple's canadian and US site, and iPhone 12 128GB unlocked is only ~$40 cheaper when factoring in currency rates. That advantage probably evaporates once you factor in currency conversion costs, customs brokerage costs, and shipping costs.
And then all those exorbitant taxes and duties will end up in hidden swiss banks and in the hands of lowly fascists that control India. It's a well-oiled machine if you ask me!
TBH, I am a big fan of taxes, I am happy to pay even 50-60% in taxes if that means my fellow human is not left hungry or without healthcare or without a roof on their head. In India this is not the case, high taxes, with no benefits to anyone (except the government and their friends).