The Most Despotic Taxes Known to Mankind

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henry quirk
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Re: The Most Despotic Taxes Known to Mankind

Post by henry quirk » Mon Apr 11, 2016 10:51 pm

Good questions.

Bob, the floor is yours...I gotta go.

bobevenson
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Re: The Most Despotic Taxes Known to Mankind

Post by bobevenson » Mon Apr 11, 2016 11:02 pm

FlashDangerpants wrote:So a telemarketing firm which has assets amounting to desks, phones and chairs in a cheap office but makes high returns against equity would pay very little tax.

But a struggling automotive parts firm that has expensive machinery, thousands of employees and a hefty factory plus a large inventory of speicalist steels and ceramics and so on would pay a huge amount - and go bust?

What about a software firm whose major asset is an algorithm (Google's PageRank for instance)?

And what about a company that owns a hugely valuable trademark (Apple, Coca Cola), but manufactures all their stuff abroad (outside your tax jurisdiction) and only really has people and intellectual property in your country?
If you can make a billion dollars of profit with no property at all, no taxes are due. If a hospital catering to the poor and indigent is on the brink of bankruptcy, it still has to pay taxes on its building, equipment and other property, just like it has to pay its electric bill. Does that answer your question?

FlashDangerpants
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Re: The Most Despotic Taxes Known to Mankind

Post by FlashDangerpants » Mon Apr 11, 2016 11:10 pm

bobevenson wrote:Money, stocks, bonds and other financial instruments don't have intrinsic market value beyond paper and ink, and are therefore not taxable.
Intrinsic market value is a self contradictory concept. If the value of something is intrinsic, then the value of that thing is entirely determined by its being that thing - and therefore cannot change. If the value of something is derived from a market, then it necessarily alters according to supply and demand - and therefore must change.

You probably just mean market value and you added the other bit to sound special. The market clearing value (which is a real concept) is exact the price at which the right number of buyers can be found for the exact number of a given product on sale. This is true of gold whether it is bullion for investment (non taxable in your scheme) or jewellery (completely taxable). It is true of cows, which are more valuable when there has been a bad winter and high feed prices than in other years. And it is true of bonds and shares and diamonds and yachts and houses too. When there are too many of anything in circulation, prices fall (like oil did).

Your plan can either become completely decoupled from actual prices very quickly. Or you can hire a huge number of people to keep track of actual prices. Choose wisely - if you take one option the cost of maintaining your tax infrastructure itself is ruinous. If you take the other your taxe will become hugely distorting and the economy will be needlessly harmed.

How are you planning to take into account the PPP difference between Alabama and NYC by the way?
If you get that choice wrong, the dollar will no longer be Optimal Currency Area and then all sorts of bad stuff will happen to rural and southern states.
But if you take the problem seriously enough to make the necessary amendments, that will hugely increase your admin costs again.
So you might want to just let states like Mississippi and Alabama go bust and just depopulate them.

You think your numbers are small, but you need to take in 35 - 40% of GDP with only a single tax. That's going to seriously screw some stuff up if there is anything you haven't thought of.

FlashDangerpants
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Re: The Most Despotic Taxes Known to Mankind

Post by FlashDangerpants » Mon Apr 11, 2016 11:12 pm

bobevenson wrote: If you can make a billion dollars of profit with no property at all, no taxes are due. If a hospital catering to the poor and indigent is on the brink of bankruptcy, it still has to pay taxes on its building, equipment and other property, just like it has to pay its electric bill. Does that answer your question?
Well. I guess we finally have the start of a philosophical problem at least.

I don't think your plan sounds very fair.

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Re: The Most Despotic Taxes Known to Mankind

Post by bobevenson » Mon Apr 11, 2016 11:32 pm

It's absolutely fair, unlike any other tax system. The only proper functions of government are social integration, defense, protection of personal rights, and the protection of property. The intrinsic market value of property is the ultimate resource of funds for doing these things, and a uniform tax rate on all property is what makes the system absolutely fair. You can determine your own tax by the amount of property you own. If all you're interested in is making a lot of money and paying no taxes, you can do so by living in a cave.

FlashDangerpants
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Re: The Most Despotic Taxes Known to Mankind

Post by FlashDangerpants » Mon Apr 11, 2016 11:38 pm

bobevenson wrote:The intrinsic market value of property is the ultimate resource of funds for doing these things
No it isn't. Economies grow by taking property and making it more valuable thus generating incomes and greater wealth. That's why we mostly take taxes from value add and (personal and corporate) incomes.

It's also why we offer tax breaks for investments (because investments are used to make property more valuable thus generating more income and adding greater value). It's the virtuous circle that increases the wealth nations, and your grand plan is to break that.

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Re: The Most Despotic Taxes Known to Mankind

Post by bobevenson » Sat Apr 16, 2016 7:08 pm

FlashDangerpants wrote:
bobevenson wrote:The intrinsic market value of property is the ultimate resource of funds for doing these things
No it isn't.
I'm sorry, but there's no way to argue against a person who insists that 1 + 1 = 3.

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Re: The Most Despotic Taxes Known to Mankind

Post by FlashDangerpants » Sat Apr 16, 2016 7:16 pm

The value of goods changes (i.e. is not intrinsic). An investor makes some goods more valuable and then sells at a profit. The accumulated added value is what provides the profits that are the source of the incomes and wealth we tax (and that is why we tax them mostly when value is added).

This is very basic shit, and you really ought to know it if you are going to reinvent a tax system.

bobevenson
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Re: The Most Despotic Taxes Known to Mankind

Post by bobevenson » Sat Apr 16, 2016 7:46 pm

You are simply quite wrong. Property always has intrinsic market value that is subject to change. It is the only fundamental basis of taxation. Taxing money or other certificates of non-intrinsic value is improper by definition.

FlashDangerpants
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Re: The Most Despotic Taxes Known to Mankind

Post by FlashDangerpants » Sat Apr 16, 2016 8:11 pm

You can have an intrinsic vale, a current market value, a net present value, a market clearing price, among others (there's so many). None of these its the same thing, and you don't know which you are talking about. But intrinsic value is definitely not the same as any form of market value.

Obvious Leo
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Re: The Most Despotic Taxes Known to Mankind

Post by Obvious Leo » Sat Apr 16, 2016 9:14 pm

For fuck's sake, Flash, what are you trying to do? Reason with him??????

bobevenson
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Re: The Most Despotic Taxes Known to Mankind

Post by bobevenson » Sat Apr 16, 2016 9:39 pm

Mr. Oblivious, do yourself a favor and not look naïve by supporting the views of somebody less knowledgeable than yourself. Money or other legal certificates have market value, but their intrinsic market value is limited to paper and ink. Again, it is only property with intrinsic market value that forms the ultimate basis of taxation.

FlashDangerpants
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Re: The Most Despotic Taxes Known to Mankind

Post by FlashDangerpants » Sat Apr 16, 2016 10:36 pm

bobevenson wrote:Money or other legal certificates have market value, but their intrinsic market value is limited to paper and ink.
That doesn't mean anything.

The Net Present Value of an asset is a complex calculation used mainly for accountancy purposes, and as such is limited to paper and ink. It would be both impossible and weird to use this for a tax calculation.

The Intrinsic Value of an asset is based on perceptions of intangible values and is used by investors to determine whether the market price is too high or low - so that is limited to paper and ink, but it is not a price you can use to actually sell, buy or account for an asset with. So you can't use it to collect taxes either.

The Open Market Value of a property is what you can sell it for right now. That's only calculable by selling it and booking that price, there is no point in describing that as a limited to paper and ink. This, more or less, is used to collect property taxes.

The Market Clearing Price is a whole other thing entirely, although some argue it is the correct price for any commodity. You wouldn't be able to levy a tax based on it anyway.

These all exist. The Intrinsic Market Value does not.

So the thing you are struggling to describe is probably the Open Market Value. It is not intrinsic, but that is just a word you threw into the process simply in hopes of looking smarter. It failed. Maybe God let you down.

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Re: The Most Despotic Taxes Known to Mankind

Post by bobevenson » Sun Apr 17, 2016 12:15 am

FlashDangerpants wrote:
bobevenson wrote:Money or other legal certificates have market value, but their intrinsic market value is limited to paper and ink.
That doesn't mean anything.
Jesus Christ, if you want to sell your fucking car, it better have an intrinsic market value or you won't know what to ask for it, and the prospective buyer won't know what to offer. Unfortunately, this forum does not require a minimum IQ.

FlashDangerpants
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Re: The Most Despotic Taxes Known to Mankind

Post by FlashDangerpants » Sun Apr 17, 2016 2:23 am

A buyer and a seller negotiating a price that suits each party is merely fair market value.

Intrinsic value would be a completely different number based on long term depreciation of cars as assets, some form of assumption about future gas prices, some further assumptions about the future direction of the second hand car market, and some more still regarding costs and availability of spare parts and so on.

It's impossible to buy and sell at intrinsic value. You buy and sell at market value. Or more accurately, you set market value by buying and selling, whereas intrinsic value is a subjective judgment about how far under or over priced the current fair market value is.

That's very, very, very basic economics.

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