Taxation: The good, the bad and the ugly.

There are many tax systems and most will work at least part of the time. In some cases it is not the type of tax which is good or bad, but how it is implemented. In my opinion the system most practical in a capitalist society is a progressive income tax. Why progressive? Because those who get paid the most, through wages or investment get the most benefit from our infrastructure. I believe that property (and LVT), sales taxes and VATs are the least desirable because they can even in small amounts hurt the least able to pay taxes.

 

"Work"? What does that even mean? Most taxes are harmful.

Obviously, but implementation is a matter of local politics and even individuals. So it's not something that it's very meaningful to discuss.

A steeply progressive income tax that falls mainly on the highest incomes has the advantage that it falls largely on rent.

That's objectively false. The only people who get any benefit from government-provided services and infrastructure are landowners, because they are privileged to charge everyone else full market value for access to those services and infrastructure. Therefore, anyone who obtains a high income by benefiting from public services and infrastructure has ALREADY PAID LANDOWNERS for that benefit. What you actually advocate is that the productive should pay taxes to fund public expenditures on desired services and infrastructure, and should then be required to pay landowners for access to the same services and infrastructure their taxes just paid for. You advocate this arrangement because it ensures that the productive are required to pay for government twice so that landowners (like you) continue to be privileged to pocket the full value of the productive's taxes without having to make any productive contribution in return.

Again, that's clearly false, as those four types of tax all burden different sets of people and activities in different degrees. VAT imposes the most specific burden on production, and is therefore worst for the economy. Sales tax has the advantage of shifting some of the burden offshore (to the extent that consumption is imported), and allows exported production to go untaxed, but does have the disadvantage of being viciously regressive, as you point out. Property taxes burden different sectors depending on a number of factors -- especially the rate, because land value depends strongly on the tax rate, while improvement value depends mainly on depreciated production cost.

For example, in Detroit (which has the highest rate of property tax in the USA), land values are so low that the property tax falls almost entirely on improvements, making private investment in them all but impossible. Detroit's high property tax rate therefore bears a large part of the blame for the city's death spiral. However, as the poor tend to live in older dwellings with little value, they bear little of the property tax burden.

By contrast, thanks to Proposition 13, California has a very low property tax rate, and a consequent very high land value fraction, about 3/4. As a result, most of the (admittedly derisory) property tax burden falls on landowners. Again, the poor tend not to pay this tax, as they typically live in low-value improvements and do not own land (all competent economists agree that a tax on land value cannot be shifted off the landowner, a fact of economics that has been known for 200 years).

The economic relationship described above shows why property taxes are paradoxical: they consist of two opposite taxes whose relative importance varies with the rate. The improvement value portion taxes what the owner contributes to the wealth of the community, while the land value portion taxes what the community contributes to the wealth of the landowner. So if the property rate is high, it is harmful because it falls mainly on improvements, punishes productive investment, and should be lowered; OTOH, if the rate is low, it falls mainly on land rent, efficiently recovering publicly created value for public purposes and benefit, and should be raised. The solution of course is to tax only the land value, and at a high rate.

 

The best tax is a FairTax. There are a lot of benefits to the FairTax that I don't want to get into here. But in terms of fairness, Benjamin Franklin said it the best. It's best to tax people who take out of the system, than taxing those who put into the system.

And to take care of your concern about people who can't pay, people who advocate a FairTax recommend a Prebate. It means that the poor get money from the government to offset the the tax.

 

Especially LVT and property tax as well as sales tax and VATs.

I put up with your rudeness on the other forum but have no intention to do so here. Some, a small part, of your LVT argument is valid for immature economies, but not all or even most, especially your concept of taking land without just compensation such that it is owned in common (nationalizing)

Your arguments were weak then and I see no reason why would be any better on this new thread. As the moderator said on closing the other, the violations were rampant there and I expect you to be civil here or go elsewhere.

I will go back to recognizing you as you are, someone buzzing around making noise. So buzz off with the insults like you did in the last thread.

 

Unless your preferred system taxes those who make more than those who make less, and continue to exempt those below the poverty line, it is not a "fair tax." The "fair tax" candidates lose because most people don't want to vote for that. In addition we need to totally eliminate all regressive taxes like property tax, fuel tax, sales and VAT taxes and increase income taxes to be at most tax neutral or possible even less.

 

That would require taxing the privileged, who take but do not contribute commensurately in return. Consumers don't take. They pay full market value to the producer for what they get. The privileged, by contrast, just take.

Haven't we learned yet that money from the government is not a substitute for having rights to life, liberty, and property in the fruits of one's labor?

 

OTC, it is known that unlike other taxes, LVT is not harmful -- except to the narrow financial interests of greedy, privileged, parasitic landowners, that is.

Identifying facts that you are trying to obscure is not rudeness.

No, it is all valid for all economies, and you have never provided any factual or logical argument to the contrary.

My concept contemplates no such thing. I advocate market allocation and voluntary payment of market rent. You know this. Don't lie about what I have plainly written. As for "just compensation," what would be the just compensation for no longer paying off a protection racketeer?

I have demolished and humiliated you for the ignorance, absurdity and dishonesty of your claims, you know it, and you have no answers. Simple.

The violations were committed by you and Californicator. I simply stated the facts.

Total absence of factual content noted.

 

Evidence for this claim? "Poverty line" defined how? And why?

Why would it be fair to levy higher taxes on those who are contributing the most to society by the productive value of their labor?

Thought not.

True. And with good reason.

As already proved in my first post in this thread (in response to which you offered no factual or logical argument whatever -- none), the property tax is the most progressive tax we have because the improvement value portion falls mainly on the more affluent, while the land value portion falls exclusively on landowners. It is even more progressive than the federal income tax.

If you had ever read an introductory economics text, you would know that the two most fundamental and widely accepted principles of sound taxation policy are "ability to pay" (which is measured by assets or net worth, never income) and "beneficiary pay" (which is measured by value of government-issued privileges owned). Income is not strongly related to either ability to pay or benefits received, so income is always inherently The Wrong Thing To Tax.

 

Typical. You only say so, the same thing over and over, but you can never explain WHY it wouldn't work and never offer any refutations. All you're left with is a straw man like "nationalizing land" which nobody suggested.

You can have all the land you want provided you pay just compensation to the society you deprive of it.

In the part you quoted, he was talking about steeply progressive income taxes falling largely on rent (as in 'economic rent'), btw, nothing specific about landowning or the LVT.

Perhaps learn some terms before claiming expertise on the subject...?

http://en.wikipedia.org/wiki/Dunning–Kruger_effect

 

"...those who get paid the most, through wages or investment get the most benefit from our infrastructure."

Taxcutter says:
I don't see how that is the case.

 

You are right, of course. Only landowners get the benefit, because everyone else has to pay them full market value for any benefit they derive from government services and infrastructure (or private charity, for that matter). So the productive have to pay for government TWICE so that landowners can pocket one of the payments in return for nothing.

Are you serious about cutting taxes, "Taxcutter"? Whatever amount you think you can cut government spending to, the ONLY POSSIBLE WAY to avoid paying for it twice is to not give one of the payments to landowners for doing nothing. And the ONLY POSSIBLE WAY to do that is to require them to repay the welfare subsidy they are being given.

I dare you to live up to the name you have claimed.

 

If you want your kids to go to school you have to live near a school, landowners charge you for that opportunity. If you want to live in an area with a fire department, police department, and hospitals in the vicinity, landowners charge you for that opportunity. If you want good farmland with easy access to the nearest city, landowners charge you for that opportunity. If you want to live near convenient transport infrastructure, landowners charge you for that opportunity. Want to live near a public park, landowners charge you for that opportunity. Want to have access to a sewer system so that you don't have to take care of it yourself, landowners charge you for that opportunity. Seems pretty obvious who benefits the most from infrastructure. Whoever owns the land around it and charges you for access. Want to live near a charitable organization, landowners charge you for that opportunity. Want to live near stores so that you can use your food stamps, landowners charge you for that opportunity. Yes, landowners, through their land title privilege issued by the government, internalize the value of all these benefits others provide whether public or private. And people have the audacity to complain about people on welfare and food stamps.

Winston Churchill nailed it:

"A portion, in some cases the whole, of every benefit which is laboriously acquired by the community increases the land value and finds its way automatically into the landlord's pocket. If there is a rise in wages, rents are able to move forward, because the workers can afford to pay a little more. If the opening of a new railway or new tramway, or the institution of improved services of a lowering of fares, or of a new invention, or any other public convenience affords a benefit to workers in any particular district, it becomes easier for them to live, and therefore the ground landlord is able to charge them more for the privilege of living there.

Some years ago in London there was a toll bar on a bridge across the Thames, and all the working people who lived on the south side of the river had to pay a daily toll of one penny for going and returning from their work. The spectacle of these poor people thus mulcted of so large a proportion of their earnings offended the public conscience, and agitation was set on foot, municipal authorities were roused, and at the cost of the taxpayers, the bridge was freed and the toll removed. All those people who used the bridge were saved sixpence a week, but within a very short time rents on the south side of the river were found to have risen about sixpence a week, or the amount of the toll which had been remitted!

And a friend of mine was telling me the other day that, in the parish of Southwark, about 350 pounds a year was given away in doles of bread by charitable people in connection with one of the churches. As a consequence of this charity, the competition for small houses and single-room tenements is so great that rents are considerably higher in the parish!

All goes back to the land, and the land owner is able to absorb to himself a share of almost every public and every private benefit, however important or however pitiful those benefits may be." - Winston Churchill

 

The rich pay more because they buy big ticket items. How much tax do you pay when you buy a Royal Royce vs a loaf of bread.

I'll repeat myself. The poor will be protected from the FairTax because of a Prebate. The poor will never be clobbered by this tax.

 

Man you are clueless when it comes to economics.

 

"Our legislators are all landholders; and they are not yet persuaded that all taxes are finally paid by the land therefore we have been forced into the mode of indirect taxes, i. e., duties on importation of goods." - Benjamin Franklin

I think Benjamin Franklin knew who the real takers are.

 

Two bugs flying around, buzz, buzz, swat, both have an inferiority complex and it is fully justified.

The fact is, most land owners are decent honest people who bought their land in good faith, either to use or as an investment. They are not oppressive, greedy or evil. Their work may or may not be in the land, but the land tends to be the result of their labor.

You two destroyed one thread, are you aiming at destroying another with your rudeness? And yes, you were not "just" attempting to refute others posts, you were extremely rude about it. Buzz off bugs.

 

Were you under an erroneous impression that that constituted a contribution to the thread?

 

You should think of the landowner as an economic entity rather than an individual. True, some landowners are oppressive, greedy, and evil, and know exactly how it works, while others just try to make a living within the system they are in and not be deprived of the fruits of their labor like all other non landowners are, but that doesn't mean that as an economic entity their actions aren't oppressive, greedy, and evil. They may not even be aware of it.

BTW, land is never a "result of labor". It was there before the landowner and will continue to be there after the landowner. I think this shows that deep inside you know that landowners don't contribute that's why you need to invent such absurd imaginary contributions.

 

<yawn> Personal insult and total absence of relevant content noted. As usual.

There. Fixed it for you.

Landowners have no choice about whether landowning is oppressive, greedy and evil, any more than slave owners did.

No, that's self-evidently and indisputably false. Land can never be the result of anyone's labor, by definition. Your claims continue to be absurd and dishonest. Just as the landowner inherently relinquishes the option of not being oppressive, greedy and evil, the apologist for landowning has relinquished his option of being honest.

No, you and Californicator, with your contentless personal invective and mutual back-slapping, destroyed it.

Our posts consisted of relevant content. Yours did not. Any objective reading of the thread will confirm this.

See?

 

The rich pay less because they can just do their consuming in other countries that don't charge consumption tax.

It's "Rolls Royce," and if you buy it in a country that doesn't charge tax on the sale, you pay less tax than the guy who buys a loaf of bread in the country where it IS taxed.

The prebate is actually the only virtue of the so-called, "Fair"Tax.

 

Land it self is purchased with the fruits of labor. It amounts to the same thing. You do realize that suggesting I am inventing anything or that my opinions are absurd is the same thing as calling me a liar and insulting me? Do you intend to continue with the rudeness? If so, buzz, buzz, swat squash.

- - - Updated - - -

Buzz buzz, swat. Your typical lack of meaningful thoughts on the thread. Why don't you at least try to be civil? Objective reading of both threads will confirm you are rude and obstructive to decent discussion.

 

A Flat Tax is the best system and I support a Flat Tax rate of 10% because its fair and everyone pays a fair rate. I say everyone should pay the same amount of tax 10% across the board rich, poor, middle class. I would also support a FairTax and we need to abolish the IRS. I would never vote or support any candidate that supports raising taxes and Obamas ridiculous tax increases are beyond laughable and idiotic.

 

What do "landowners" have to do with infrastructure?

 

So were slaves. So are taxi medallions. So is any other rent collection privilege.

You are destroyed.

No, it does not. You need to re-read the story of the bandit in the pass. Having paid a previous bandit for the pass does not alter the fact that he is robbing the merchant carvans, not making a productive contribution.

Sorta like buying a slave with the fruits of labor is the same thing as buying a shovel or a backhoe...?

You need to find a willingness to know what "same" and "different" mean.

And you don't think that's rude, as well as being contentless trolling?

 

Armor for Sleep already explained that to you very clearly and simply: if you want to use infrastructure, you have to pay a landowner full market value for access to it. I'm not sure there is any clearer or simpler way to explain that to you.