Leftists wake up, lower taxes equal more revenue

When the rich fat cats finally start paying 33%, then come back and talk.

Right now the Buffets, Romneys, etc... all pay way less than 33%.

The GE's, Boeings, and most other large corporations are paying nothing most year, sometimes they even get money back.

I think a true flat tax with zero loopholes, and some breaks for those at poverty level is all we need. Clear out the loopholes that allow the Rich to profit off the rest of us, and we've got the problem licked.

 

... Please go read up on the double taxation of capital gains.

BTW the LVT is NOTHING more than a redistribution of wealth scheme. Period.

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Rich people would love a flat tax. They've been begging for one for years. It's the left that doesn't want the flat tax.

 

How can capital gains be taxed twice when corporations pay no taxes on their income?
Anyway, most capital gains come from gambling in the markets so even if the corporations did pay taxes on their income almost all capital gains would still be taxed only once.

 

Uhhhh corporations do have to pay income tax. The Corporate Income Tax rate as of 2012:

First $50,000 15%
$50,000 to $75,000 25%
$75,000 to $100,000 34%
$100,000 to $335,000 39%
$335,000 to $10,000,000 34%
$10,000,000 to $15,000,000 35%
$15,000,000 to $18,333,333 38%
Over $18,333,333 35%

So they get taxed on that income. The capital gains then gets taxed at ~15%. So they're paying close to 45-50% on their capital gains.

 

Those are the tax rates but that is irrelevant because very little personal capital gains income is from dividend payments and many of the largest corporate capital gains distributors pay zero corporate income tax. REITs pay out more capital gains than all other companies combined. They pay zero corporate income tax. The largest corporations that do pay dividends pay zero corporate income tax. Also, many people who receive dividends are retirees and they pay no tax on their capital gains if their income is less than $66,000. A lot of the rest ends up in retirement accounts, where it is not taxed.

The amount of personal capital gains income that is taxed at the corporate income level and again at the personal income level is a drop in the bucket compared to all capital gains income.
The argument that personal capital gains taxes and corporate income taxes are some sort of double tax on all capital gains is the conflation of a minor tax anomaly into a serious misrepresentation of tax policy.

It is easy enough to fix, an exemption for income received as dividends from corporations that actually paid taxes on that income is certainly a reasonable position to take. However, a reduced or eliminated personal income tax on all capital gains because some tiny amount of personal capital gains are from corporate profits that were already taxed is a completely unreasonable tax dodge.

 

You'll need to substantiate your claim that most capital gains comes from REIT's.

Regardless, even IF your claim is true, you wouldn't need to raise taxes on all capital gains. You could simply remove the ability for REIT's to deduct dividends paid to owners.

 

That would result in the massive disruption of a multi-$Trillion sector of the real estate market as REITs dissolve and restructure.

It would be far easier to just exempt personal capital gains taxes from capital gains that taxes have already been paid at another level.

That way all individual capital gains income can be taxed at the same level as other income while alleviating any concerns over double taxation.

 

So let me get this right. Forcing REIT's to pay taxes on the profit they pay out as dividends would result in the "massive disruption of a multi-$Trillion sector of the real estate market as REITs dissolve and restructure".

But increasing the taxes on REIT's EVEN FURTHER to the same level we tax income tax AND THEN raise taxes on every other capital gains tax except for the double taxed wouldn't result in a "massive disruption of a multi-$Trillion sector of the real estate market as REITs dissolve and restructure" let alone the consequences that it would have on all other aspects of the financial sector?

Your logic is absurd. It would be far easier to simply take away the exemption that the REITs receive by being able to writeoff dividends.

ETA: You still didn't source your claim that most capital gains comes from REITs in the first place.

 

Once rates get to a certain level, further reductions in rates have a negative impact. This is from a 2005 CBO study entitled "Analyzing the Economic and Budgetary Effects of a 10 Percent Cut in Income Tax Rates"

 

Your comparing Romney and Obama's as both being "millionaires" is like comparing apples and oranges. . .it is also very different in terms of the tax rate they both paid! (15/% for Romney, 23% for Obama).

Obama is at the bottom of the "1%" while Romney is close to the top. . .and THAT is where the difference in taxation is the greatest and where it should be changed!

I believe that incomes of ANY KIND over $2 millions a year should be taxed at 60%. History has shown that IT WORKS!

 

Sure. I was just going with what the video says and then construing it in a different way than was being stated about what it says. If 33% is the best rate, then logically cap gains being taxed at 20% max may be too low or 39.5% being the top bracket might be too low depending on what the end result is that gets your top earners to an effective 33%. The rates don't bother nearly as much as the deductions and credits though and the totally bogus accounting tricks corporations get to play. If corporations were actually forced to cough up a reasonable effective rate, then we could probably go even lower wih rates across the board to hit the optimal combination.

 

The video claimed that the Laffer curve applied to “taxes”, and didn't rule out any form of taxation. Land value taxation is one of the forms of taxation, therefore it is automatically included in any statement about the nature of “taxes”. That means that the video is inaccurate … downright false … because land value taxation, which is one type of the “taxes”, does not follow the Laffer curve at all.

 

LVT would eliminate an existing and unjust redistribution of wealth scheme.

 

That I cannot argue with.

 

Can you offer some proof for this statement?

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

 

First let me ask this. One issue I would like clarification on is who determines the value of land? In some methods of the LVT the person who owns the land determines its taxable value by stating how much he would sell the land for and he has to pay taxes on that amount. That property is then up for sale at that price for anyone to buy, including the government.

Is this your idea or are you advocating for all land to be owned by the state and essentially leased out.

Who controls the land and who determines that lands value?

 

In the system I advocate the local county government would have an appraiser who would give a risk free appraisal of the lands value and send out a tax bill based on that appraisal. If the landowner pays that bill in full, his tenure is secure, no questions asked. If the landowner chooses to pay a lesser amount of tax than is stated on his tax bill, then his title number would be placed on a publicly available sale sheet that would allow competing offers to be placed against his tenure. Here is an example: Suppose you have a home which is appraised by your insurance company at a value of $100k. Also, suppose that the local government sent you a tax bill for the year, and the tax bill on the land is $5k. If you decide that the tax bill is too high, and you choose to only pay $4k in land tax, then your home will go on a sale sheet along with all others who chose to pay a lesser amount. Other people in the community can shop for homes off this sheet, all they have to do is pay the homeowner (in this case, $100k) for the home, and out bid his payment of $4k per annum in tax payment.

So, paying less tax than the county billed you for, will not threaten your immediate tenure, but it would place your property on a sale sheet. If others value your land more, and offer more in taxation to the county, then they can pay you for your improvements ($100k for the home), pay the county the higher rate of taxation that was agreed upon, and then they will take tenure over the property. One advantage to this system should be immediately obvious, if you want to move to a different location, just don't pay your land tax bill and the county will sell your property for you, at no cost, and your tenure will remain secure until someone comes forth with a greater offer.

I certainly do not support government ownership of land. In fact, I support that government agencies which use land also pay the land value tax, which will force those agencies to economize on land usage. I also support an equal, individual LVT exemption, which would exempt the first portion of land value from taxation. So land value taxation wouldn't kick in until you own more than a specified amount of land by value.

The taxpaying owner would control the land, and the market would determine the lands value. Legally, a land value tax doesn't change anything about the current system of land tenure, but allowing the market to set the rate of taxation on land parcels would result in land taxes being substantially higher than they are now levied. But you must also remember that land value taxation is always advocated as a replacement for other taxes, so even though the taxes on land will go up, the taxes on everything else will go down.

 

If the government is going to send appraisers out... isn't that an expense on everyone else? And what happens if we disagree with the government on the appraisal their appraiser gives? Also, are you still going to have this land up for sale in perpetuity? If so, the only people you are screwing over are landowners who are relatively poor. The rich will be more than capable of paying their tax but the relatively poor land owners who go through an economic downturn risk losing everything and are CONSTANTLY living their lives worried about whether or not their land will get bought out from under them.

Also... I'd like to ask another question. Someone pointed out to the another individual that there's many, many people who rent property... from apartments to trailers to houses. If you are putting a massive tax on EVERY landowner, what stops the landowners from passing those taxes down to their renters? For instance, I own land that an apartment complex is on. You increase my taxes by 10%. What stops me from charging the apartment complex that is leasing my land an extra 10% along with every other landowner that's leasing to apartments? What then stops all of those apartment complexes from increasing rents on every renter? Same concept for landowners that own land that malls and businesses are on. What stops that from happening?

The truth is, the land value taxation idea is nothing more than another redistribution of wealth scheme but in reality the only people it's going to hurt are the poor/middle class.

Lastly... I question LVT proponents (many of which claim that this would be the ONLY necessary tax and we could remove all others) on whether or not we would have enough money from simply taxing land to pay for the size of government and socialism we have now. You would have to tax the land at such a high rate that no one would be able/willing to afford it and it would lead to land abandonment. This has already happened in Pittsburgh. For much of the last century Pittsburgh has been instituting a land value tax. A study by the Finance department in Pittsburgh came to this conclusion... Changing from a land value tax to the single tax increased the property taxes in the wealthiest neighborhoods and decreased the tax in poorer neighborhoods. In other words, under the land value tax Pittsburgh's poor citizens subsidized the real estate tax of wealthier citizens.

Like most socialist programs, they use propaganda to get the poor, disenfranchised morons to support their idea by telling them how much better their lives will be and in the end the socialist elite are better off and the poor get screwed.

 

You can look that up yourself, you seem to have plenty of free time.

I am not the one who proposed that REITs be subject to income tax, you are. Let's get something clear, REITs pay zero tax on their income and I have no objection to that so your outrage at "raising" the taxes on REITs and then raising the taxes on capital gains is just you misrepresenting your own position that REITs should be taxed and conflating that into the outrageous lie that I have taken the position that REITs should be taxed and the income from them should be taxed again.

Your are a troll, get back under your bridge where you belong.

 

It has been known for over two hundred years that land value taxation is the most fair and efficient form of taxation. You act like this is just some idea that has been recently cooked up.

– Adam Smith was the first advocate of taxing land rent (ground rent he called it) in his book The Wealth of Nations.

– John Locke also advocated that all taxation be placed on land rent.

– The founding fathers (Thomas Jefferson, Thomas Paine and Benjamin Franklin) also advocated that all taxation be paid by the privileged landowners.

– The original constitution of the United States stated that all federal revenue should come from land value taxation

– Winston Churchill, Albert Einstein and Henry Ford were also land value tax advocates.

– The founder of the Libertarian Party (David Nolan) and libertarian minded economist Milton Friedman favored land value taxation as the “least harmful” tax.

– At least eight Nobel Prize winning economists have shown their support for land value taxation as being superior to other forms of taxation. – http://www.wealthandwant.com/themes/quotable_nobels.htm

And there are many more, simply too many to list. Do you really believe that all these great thinkers were actually just plotting a tax system to be used against the middle class and the poor? Doesn't it seem more likely that you are just wrong. Well, I'll let you in on a secret, YOU ARE WRONG.

I will not take the time to answer your questions, because I know that you are not listening anyway. If you really want these questions answered you can do some reading on your own, you can start here: http://en.wikipedia.org/wiki/Land_value_tax

 

If you're incapable of defending your position and can only point to people who agree with you as evidence for the efficacy of your idea.... then perhaps you should go back to the kiddy table and stop responding to the adults. Once you're able/willing to defend your position then come back and talk to me.

 

You should be happy he's such a well mannered fellow and went easy on you. Some of the stuff you dreamed up, and, yes, literally dreamed up, is almost not worthy of addressing (like the accusations of it being socialism, for one).

Though I'll bite on your wrong opinion that the tax would simply be passed on to tenants. If landowners were able to pass on a 10% tax increase on land value to their tenants, then why don't they already charge that much more anyways, regardless of the tax? What stops them? The laws of supply & demand. They already charge the highest the market wants to pay for the land. The market is not going to just give you more money because you want more money due to a 10% tax increase on land value. Supply of land is fixed, you cannot alter it, thus landowners can either bite the bullet and take what the market bears or miss out on money trying to charge more for it. That's the simple explanation.

 

I would agree with you, but for tax preferences that benefit the wealthiest the most.

 

WTF are you talking about? LVT is essentially asserting that the land (read "means of production") belongs to the collective or community as a whole and it's value is determined by the government.

Because if they did it now their competitor who has another piece of land that wants the same tenant would undercut his price if he increased it by 10%. However, if the government hits them ALL with a 10% tax, they can ALL safely increase their rents 10% and stay in the exact same competitive position. Would there be some who would undervalue their land by that 10%? Absolutely, but that's a business decision they would have to make at the expense of losing profit because of increased costs (taxes). He would probably only do that if he was having trouble renting the property in the first place. He would be willing to take the cut in profit to have the rent. The MAJORITY of them, however, would choose to raise rents on tenants and take back that 10% that the government stole... especially if those costs became prohibitively expensive. This would impact renters FAR more than it would impact landowners.

 

What a terrific OP!

Superb in a number of ways.

Use of the language. Metaphors. Visual aids. Casual and not too preachy or condescending. Humorous. Gets right to the point. Interesting fact(s).

Seems longer than it actually is. (In a good way.)

Great post!