Unlike nomads, tourists aren't earning income while on vacation, so there's no income tax to be paid. Nomads earn income but don't pay local income tax (hopefully they at least pay it in the their "home" jurisdiction).
Tourists tend to stay in highly taxed hotels or short-term rentals. Nomads might do that, but they also couch surf, camp, live in vans, etc.
Tourists dine out more than a typical resident, which in most places is taxed higher than groceries.
And simply based on length of stay, a nomad is more likely to consume expensive services like medical care.
With all that said, there should be a way for people to work wherever they want (and pay appropriate taxes while doing so).
Unless they're doing some shady things, it doesn't seem to me like a city/community will lose money on a nomad. They still need to pay for goods and services, housing, travel, etc. Local business makes money, and government taxes it.
Traditional tourists may spend more money, but nomads still likely spend more than locals do.
In a lower income area, that's certainly possibly.
But, in a higher income area? I doubt it. A single mid-career developer in the US is going to pay somewhere around 20% in income taxes (combined federal, state/local, FICA, after 401k contributions and taking standard deduction).
A nomad living in my area (DC metro) would have to consume a lot of stuff to make up for that tax shortfall.
This is moreso a failing of states to capitalize on remote workers. Plenty of people would just get a visa if possible. But it's very complex for most countries, and especially the USA.
edit: Estonia is the only one that I know of that explicitly considers the position of being employed by a company located in a foreign country. https://e-resident.gov.ee/nomadvisa/
This is moreso a failing of states to capitalize on remote workers. Plenty of people would just get a visa if possible. But it's very complex for most countries, and especially the USA.
Absolutely agree. I'm not anti-nomad - I'd love to do it myself. But, the hurdles of doing are too high to make the leap. Hell, even doing it within the US isn't easy because of state taxes. And I'd want to visit places for more than the typical 90-day tourist visa - probably more like a year at a time.
A nomad that isn't also a criminal tax evader doesn't have an income tax shortfall to make up in most US jurisdictions, since most US jurisdictions with an income tax levy it on all income earned while in the jurisdiction.
There may be a state or local payroll tax shortfall, because those have different standards, but usually directly fund benefit programs for which the nomad worker isn't eligible as a result of the same rules, so its a wash.
Yeah, the above posts don't make any sense. Nomads have to eat and sleep, just like everyone else. When I was in Korea I stayed at various Airbnbs owned by local Koreans and got food at local places owned by Koreans. I paid for the metro system (which I used just about every day) and for KTX bullet train tickets. I fail to see negatives here from a financial perspective.
I would gladly get a visa and pay taxes to enroll in the healthcare system... but it's quite difficult. That's another discussion, though.
> Income taxes in most areas (at least in relatively wealthy countries) far exceed any VAT/sales/consumption taxes.
Don't be so sure about this. Link?
E.g: Sweden 2020, income taxes 31% vs VAT 22% of total tax revenue.
Nomads are great. They drop by in prime productive age, stay for a bit and generate tax revenue. Only stay as long as they have money, no social security costs. Have medical insurance.
? How do you calculate to get them to be net negative to your society ?
You're proving my point. 31% of total income is quite a bit more tax than 22% of consumer spending (which is a fraction of total income).
For a resident with $100,000 income... $31,000 in income taxes. Assuming no savings and all consumption taxed at 22%, that's ~$15k in consumption taxes. Total tax burden ~$46k.
For a US-based nomad with $100k income, paying US income taxes (~20% fed/state combined), that's $80k to spend and <$18k in total taxes.
$28,000 delta. That $28k is being spent on something (military, police, whatever). Maybe the nomad isn't using any services that the $28k delta is funding. I don't know. But, just on the rough math, a nomad pays less in tax than a resident.
I guess the real question is does a nomad use services more like a short-term tourist or more like a long-term resident? And does the consumption taxes paid end up as a positive or a negative? How long does a nomad have to reside in an area to consume enough services to need to pay income tax? I don't know the answer - I only know the nomad is absolutely paying less in total tax burden than a resident.
> And simply based on length of stay, a nomad is more likely to consume expensive services like medical care.
Unlikely. Age distribution of tourists is significantly older than nomads. Younger people require significantly less medical expenditure than older. Older people also take longer than average vacations.
Regardless, both nomads and tourists are generally covered by medical insurance.
So not much different than tourists that are welcome to spend their money in countries?