alt Hacker NewsMost countries need both VAT and income tax to fund their budget. Importing well off immigrants means they subsidize the VAT part only and likely do not generate income from Japan salaries. This is basically same problem as with digital nomads: they use the infrastructure which they do not fund proportionally compared to regular citizens.
Am I missing something here?
Dollar multipliers and sources.
A digital nomad is still economically positive when a) their money circulates locally, eg at cafes and restaurants and b) comes from outside the region. That’s because they’re bringing wealth generated elsewhere (ie, at their employer) into the region.
While you’re correct the state misses out on income taxes, they get taxes on further spending, eg, when those digital nomad supplied dollars are used to pay wages at the cafe.
Not specifically about digital nomads, but Amazon used to estimate their salary dollars induce $2.5 of additional local economic activity — as Amazon employees bought from local stores, the store employees did in turn, etc.