Base taxes on net worth only.

Tell me about the taxes you pay wherever you are and describe how tax law directly impacts you.
Anyone can answer this one

 

Or the complex is in a great school district post the US housing crash. Then high rent is not just profitable, but something many potential renters are looking for. Can you explain why?

 

Buying land usually requires a loan, a down payment, a steady income history, and a good credit score.
Your reasoning tells me you know nothing about buying a home or land or financing any substantial purchase.

 

I asked why a unit might be worth even more post US housing crash. Any guesses?

 

Excellent!
In the US? First home?
What are your terms and apr?

 

What made me say that was your post suggesting property at lower prices would sell more expediently.
In the US, I can assure you, the price of things-be it land, a home, a studio apartment, a Coach purse, some Juicy purfume, or a Starbucks coffee, has very little to do with sales.

 

Taxes on land bring land prices down and make the market for land more liquid by drastically reducing transaction costs. In fact – if land value taxes are high enough – people with land that doesn't have improvements won't even bother with selling the land, they will simply abandon the land when they are done using it -- exactly like tenants do under the current system. The next user doesn't have to put up a lot of money up front, he just takes over paying the land taxes, and realtors are out of the picture entirely.

You can't lump land in with the rest. Supply and demand does not apply to land, because the supply of land is fixed. Unlike the other items in your list, land has no cost of production, it is a free gift from nature to all of earth’s creatures. The price of land is therefore determined strictly by demand, which is measured by sales (rents).

 

It is not just about the taxes which you pay directly. It is just as important to consider the tax BURDENS which indirectly lower wages and/or increase consumer prices. If you tax home builders, then fewer homes will be built, until the price of homes increases enough (or labors wages decrease enough) to pay the tax and still provide sufficient profit for producers. So, even if I am not a home builder, a tax on home builders would have a direct impact on me, because the tax increases the cost of building homes, making them more expensive, and I need shelter.

 

Wow.
Come back when you start working and paying for housing, fuel, utilities, groceries, and such.
Copy and save your last couple of posts and read them again in about 20 years.

 

Long term leasing completely changes the character of your proposal, somewhat defeats its stated purpose, and is not much different than the current state of affairs.

30, 50 and even 100 year leases are common in the commercial world and a lot of land under long term lease stays idle for long periods. Long term leasing can create circumstances similar where it is in the best interest of the lease holder to leave some land idle in order to create a shortage relative to demand, thereby raising rents and generating greater revenue from other nearby developed land that they also own.

It would be easy enough for a consortium to outbid all others for the undeveloped land around and within a city. They could also buy up leases for developed properties within the city. Over time as the city grew increased demand would increase the revenues they will get from their developed properties. They could then develop their idle land at a pace that would not cause rents to go down. The revenue from a scheme like this would more than offset the cost of leaving large areas undeveloped for decades. Singapore and Hong Kong do this.

Singapore is also the largest provider of subsidized housing in the world per capita and does not evict people willy nilly just because some higher bidder shows up. Market rate Singapore government owned residential properties are let out on long term leases, usually 30 or 50 years. Commercial properties are leased for 10, 30, 50, or 100 years. It is much the same in Hong Kong.

 

So if I earned $5 million per year, and I invested all of my extra cash outside of the USA, building my wealth everywhere in the world except in the USA, I would basically pay no taxes?

Sounds to me like a great incentive to force cash out of the USA and into other nations and investments...

 

Now there is a better question. Under the system I propose the tax would be paid for assets within the United States for that time they were in the United States. If they moved to a country like Germany where we have a military presence a lesser tax would be paid. If they moved to a country we we have no treaties to protect that country in case of invasion, etc. there would be no taxes. Using import and export fees for moving assets for trade and investment would go back to an older model like we had in the fifties to keep our trade deficit from occurring. For a period of time other countries that allowed themselves to be embezzled from the way we are now would see more investment, until the resources ran out. Our local smaller companies would grow and see the demand vacuum left by the companies who where poor citizens to begin with. Instead we are learning this lesson from other countries who's taxes mimic what this model would do. Granted, there are specific strategies that have not yet been explored. This is because no one has investigated it as a holistic model independent of the current one. Far too ready to stay in a dysfunctional family than to play scientist and discover anything "too different". Peck it to death piece by piece instead of research it as a new and different "organism".

 

Total private wealth in the US is about $52Trillion. A 4.25% tax on that wealth would result in about $2.2Trillion in revenue. Current government revenues are about $3.2Trillion and spending about $3.8Trillion. The tax rate appears woefully inadequate

 

Interesting...if people paid 4.25% of their net worth every year, if they don't have additional income to acquire more net worth, in about 20 years you will have taxed all of their net worth away and they are left with nothing. A retired couple who have a house with no debt and a value of $250K will have no house or asset after about 20 years...

 

You are creating a tax system that has loopholes and lies and is so complex it will cost billion$ to administer and enforce!

What is the reason for taxation...to pay for government. First, make sure government is not costing the taxpayers more than necessary. Next question is who will pay for government...a head-tax on every citizen, tax on earned income, tax on un-earned income, tax on business, tax on consumption? And none of these questions can be answered until the nation decides if people can live in the USA for free or if they must pay their fair share to support government? Keep in mind that all taxation has a negative economic component so how it is applied directly impacts where it is applied. In this regard, it seems logical that taxation is spread over the largest quantity of taxpayers and in many different areas in order to minimize the impact on single taxpayers. Logically a flat tax rate on all consumption is the most equitable way to tax as long as there are no credits and deductions, etc. ALL US citizens and others pay the identical consumption tax...

 

Beneficial government spending always makes the land near that spending more valuable by at least the cost of the spending. As long as government spending increases land rents by more than the cost of the spending, government is being efficient. For example, if government spends a million dollars building a new road, the landowners along that new road should be able to collect a million dollars more in rents over the next 20 or 30 years. Just because landowners collect the higher rents near public infrastructure and services doesn't mean they should be allowed to keep those rents.

Government spending only makes landowners richer so only landowners should pay taxes. When government builds a new road or bridge the landowners near that infrastructure suddenly see their incomes increase, sometimes dramatically. If government spending makes the landowner richer, but doesn't make the hamburger flipper any richer, doesn't it seem more fair to ONLY tax the guy who got richer because of the spending?

Every tax you listed just transfers money from producers to landowners. Why do you only want to use taxes that make the hamburger flipper poorer and the landowner richer? If government improves the roads near the hamburger flippers apartment, the hamburger flipper's landlord will increase the rent on the apartment. Why should the hamburger flipper pay taxes to build public infrastructure and then have to pay more rent to his landlord in order to live near that infrastructure that he already paid for? Doesn't it make more sense that the landowner – the guy who gets to charge more rent because of the infrastructure – should be the only one paying for the infrastructure.

This is absolutely not true. Land value tax does not have any negative economic components. Land value taxation has positive effects on the economy because it makes landowners become more efficient in the use of land, but absolutely no negative effects. Unlike other taxes land value tax has no dead-weight losses, it does not lower wages or make anything more expensive.

Why should working people pay taxes to provide infrastructure and services and then have to pay more rent to landowners in order to live where that infrastructure and those services are provided. You are basically advocating that people pay for government TWICE, once to the government in taxes and then to landowners in increased rent. You can measure who is benefiting from government activities by who is made richer because of government activities, and studies have shown that only landowners are made richer because of government's activities. This is why under the current systems of taxation the landowners keep getting richer even in their sleep, but workers keep getting poorer. We need to stop using taxes which burden production and consumption just so landowners can get richer off the increased rents that infrastructure and services allow them to collect.

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"The striking result is that a tax on rent will lead to no distortions or economic inefficiencies. Why not? Because a tax on pure economic rent does not change anyone's economic behavior. Demanders are unaffected because their price is unchanged. The behavior of suppliers is unaffected because the supply of land is fixed and cannot react. Hence, the economy operates after the tax exactly as it did before the tax—with no distortions or inefficiencies arising as a result of the land tax." – Paul Samuelson, Nobel laureate in Economics (1970)

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"Economists are almost unanimous in conceding that the land tax has no adverse side effects.” — William Vickrey, Nobel laureate in Economics (1996)

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"In my opinion the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago." — Milton Friedman, Nobel laureate in Economics (1976)

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"What gives urban land its value, apart form the few cents per square foot which the developer has to spend on roads, water and sewage connection, is its proximity to opportunities for employment, shopping, education, etc. In other words, the seller of urban land is mainly selling the fruits of other people's labour. The requirements of social justice would therefore indicate that heavy taxes should be imposed on land." – Colin Clark (Oxford)

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"Both ground-rents and the ordinary rent of land are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own. Though a part of this revenue should be taken from him in order to defray the expences of the state, no discouragement will thereby be given to any sort of industry.” – Adam Smith

 

There are those who think that infrastructure should not be provided by the government and paid for through taxes.

 

Governments could turn over all infrastructure to private enterprise and people could then deal with tolls for every road, bridge, park, etc. that they use every day. This way, people who currently don't fund the government can be enlightened by forking over uncontrolled prices to the private sector to use the infrastructure. The motto then becomes 'no pay no way'!! People should think some before bashing the government on infrastructure...

 

Right … and then all the profit goes to landowners.

You have run out of logic, you are just saying anything now.

Right, after they pay taxes to build the infrastructure they don't have pay taxes to government to use it, but they do still have to pay rent to a landowner in order to live or work near it … that way the landowner can get something for nothing.

No, most people are impoverished because of government spending, because they have to pay for it through tax burdens but the financial benefits all get pocketed by landowners. If government spending makes a location more desirable, then the nearby landowners get more money in rent, hence the benefits are absorbed by the landowners and nobody else.

Again you are wrong. High quality infrastructure (roads) bring more competition for employment, so the landowner can find labor as well as consumers at lower costs. The employee uses the roads to get from his apartment to the job-site. If the roads are good he will pay more for the apartment and get less for his work – if the roads are bad he will get more from work and pay less for the apartment. Therefore, good roads are not a financial benefit for the employee, if he wants to live and work near them, he has to work for less and pay more in rent for living quarters … but the good roads are a huge money maker for the landlords on both ends of his commute.

That is impossible. You don't know anything about land economics. Land taxes make land cheaper to buy. If the land taxes are high enough the price of buying land falls to zero ($0). The reason land taxes cause land prices to go down in lockstep with higher tax rates is precisely because land taxes cannot be passed to land users. The higher the land tax, the lower the lands exchange value … because land taxes cannot be passed to workers, consumers tenants or anyone else … they are specifically a burden to the landowner at the time the land tax is levied. Land taxes are not a burden on future landowners because future land buyers discount the cost of the tax out of the price they pay for the land. Therefore, land taxes are completely burdenless after they are established … they are the only burdenless tax available for governments to use.

Bulldoze all the public roads near your land back into donkey trails and see what what happens to the value of that land. Government spending is a huge giveaway to landowners … Las Vegas wouldn't even exist if not for government spending.