The Most Despotic Taxes Known to Mankind

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bobevenson
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Re: The Most Despotic Taxes Known to Mankind

Post by bobevenson » Tue Apr 19, 2016 3:55 pm

People have a right to buy what they want, where they want, and companies have a right to manufacture what they want, where they want. Regardless, most taxes will come from capital goods taxation, existing property that isn't going anywhere. And since taxation isn't based on profitability, unprofitable companies will still have to pay taxes even if they have to sell their property or go out of business. And don't forget, the zillions of so-called nonprofit organizations will also have to start paying taxes on their property. An important function of government is the protection of property, and the cost of this protection is properly paid for by taxation of property based on its value.

FlashDangerpants
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Re: The Most Despotic Taxes Known to Mankind

Post by FlashDangerpants » Wed Apr 20, 2016 4:33 am

Taxes are paid from incomes.
If you derive much of your tax base from property that is not a basis for income, everyone has to sell it.
If they have to sell their houses prices fall.
If prices fall your tax income falls.
It doesn't matter that the property you taxed was going nowhere - it lost market value so it lost taxable value.

That is why it is more sensible to tax incomes (capital gains is an income tax).

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Arising_uk
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Re: The Most Despotic Taxes Known to Mankind

Post by Arising_uk » Wed Apr 20, 2016 11:24 am

Hmmm... would this also apply to the idea of a Land Tax? As I can see that it might but might this not be a 'good' thing as the land would be freed up to be used by those who think they can improve it(although I can see this could be a problem) and make a profit(given that the improvement would not be taxed other than the increase in the land value).

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Re: The Most Despotic Taxes Known to Mankind

Post by FlashDangerpants » Wed Apr 20, 2016 12:00 pm

Residential land in cities usually has property taxes levied at a fairly nominal levels to pay for local government spending anyway. A recent proposal to make big expensive houses in the UK liable for quite a low "mansion tax" (calculated on market value) caused a huge furore without even getting close to legislation because of all the widows who would been forced out of their houses for it.

Local authorities in most of Europe can charge developers extra money when they build new houses, in the UK, central government steals that money. No idea what the US does. In that case the Euro way is probably better as the result of our silly policy is that local authorities refuse planning permissions all over the place, and then sell school playing fields for redevelopment because that way they keep the cash.

In context though, it is a bit irrelevant. If the government can null the value on currency and bonds, they can also refuse to register land transfers which instantly makes the market value of land $nill.

Therefore charging tax on land value under Evenson's terms is just as tyrannical as any other tax (not that he actually covered what the tyranny was, he probably was been using that word with just as little thought as he put into 'intrinsic').

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Re: The Most Despotic Taxes Known to Mankind

Post by bobevenson » Wed Apr 20, 2016 12:45 pm

FlashDangerpants wrote:Taxes are paid from incomes.
No, since money is a medium of exchange of property, that's what taxes are paid with.

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Arising_uk
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Re: The Most Despotic Taxes Known to Mankind

Post by Arising_uk » Wed Apr 20, 2016 1:32 pm

FlashDangerpants wrote:Residential land in cities usually has property taxes levied at a fairly nominal levels to pay for local government spending anyway. A recent proposal to make big expensive houses in the UK liable for quite a low "mansion tax" (calculated on market value) caused a huge furore without even getting close to legislation because of all the widows who would been forced out of their houses for it. ...
Wasn't thinking of a house property tax but a Land Value tax.
http://www.landvaluetax.org/
What I wondered was would it drive the price of land down to worthless in the way you describe his 'property' tax would or, given it is land, would it reatin enough value to be worth the tax. As it'd be 'easy' to gather and if enough raised we could maybe do away with a large-chunk of income tax.

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Re: The Most Despotic Taxes Known to Mankind

Post by FlashDangerpants » Wed Apr 20, 2016 1:42 pm

bobevenson wrote:
FlashDangerpants wrote:Taxes are paid from incomes.
No, since money is a medium of exchange of property, that's what taxes are paid with.
Form Bob, not with.

If you are a worker, you gain an income from your work. If you are an investor, you receive an income from your investments. If you are a landlord you receive an income from your property. If you are a bank you receive an income from your lending. And so on.

Very few of us pay our taxes by forking over part of our stored wealth to the government, we mostly fork over part of our income.

If you tax people's property, they will still pay from their income. They will only sell their property to pay the tax if you tax them so much their income is not sufficient. Or, in this case, if you tax stored material wealth while granting an exception to all their financial assets as well as any incomes that accrue from such.

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Re: The Most Despotic Taxes Known to Mankind

Post by FlashDangerpants » Wed Apr 20, 2016 2:10 pm

Arising_uk wrote:
FlashDangerpants wrote:Residential land in cities usually has property taxes levied at a fairly nominal levels to pay for local government spending anyway. A recent proposal to make big expensive houses in the UK liable for quite a low "mansion tax" (calculated on market value) caused a huge furore without even getting close to legislation because of all the widows who would been forced out of their houses for it. ...
Wasn't thinking of a house property tax but a Land Value tax.
http://www.landvaluetax.org/
What I wondered was would it drive the price of land down to worthless in the way you describe his 'property' tax would or, given it is land, would it reatin enough value to be worth the tax. As it'd be 'easy' to gather and if enough raised we could maybe do away with a large-chunk of income tax.
That would depend on the level. If set at X% of market value per annum, a high value for X would definitely cause big problems, a tiny value would fail to have any useful effect, and the value that lies in between would vary tremendously.

If set at X% of the land value including any houses, shops airports, factories or whatever then you can consider the original X to be squared or possibly cubed. Land value is ultimately tied to the potential income from its use or development, if nobody wants to develop land because only the most extremely successful developments could provide sufficient return on investment (and nobody wants to lend for the same reason, and those who do lend demand higher interest rates), then demand craters. Basic laws of supply, demand & price tell us what happens next. (And then all the banks go bust).

Even without that silliness, a number that might force a useful proportion of people to stop using empty land with planning permission as just collateral for loans (supposedly a bit of a problem in house bubbly London) would kill the value of rural land stone dead and bankrupt farmers who would no longer have any collateral for any loans. A workable plan would (presumably) only be applied to land for which no other tax was being paid (business rates, council taxes), probably within city limits, variable by region, and ultimately still subject to exclusions on any number of grounds I haven't thought of yet.

One caveat though - whatever other taxes might be displaced, shouldn't include income taxes or sales taxes. I wasn't being dickish to Bob, it is a fact that taxes are ultimately paid out of incomes and that levying them against anything but incomes causes problems. The ultimate problem is Tax Incidence - the very thorny question of whose income the tax ultimately comes out of if you don't just collect it directly from a person's income. We're probably about 20 pages away from getting Bob to consider something as conceptually challenging as that though.

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Re: The Most Despotic Taxes Known to Mankind

Post by bobevenson » Wed Apr 20, 2016 2:14 pm

It doesn't matter where the money comes from, taxes are paid with money, and it is the government's responsibility to see that the total amount of money equals the total value of property, avoiding either inflation or deflation.

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Re: The Most Despotic Taxes Known to Mankind

Post by FlashDangerpants » Wed Apr 20, 2016 3:07 pm

That's insane. The overwhelming majority of property isn't for sale at any particular time, so providing enough cash to purchase all said property would cause hyperinflation.

There's enough money and credit in circulation to keep a reasonable balance between the goods and services that people wish to buy and the goods and services they can supply, imbalances are reflected in prices. That's why money supply is variously tightened and relaxed. Suddenly printing 8x as much money as currently exists would cause a price spiral so huge you should just issue it all in million dollar notes because that is what you'll need by the end of the week anyway.

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Re: The Most Despotic Taxes Known to Mankind

Post by FlashDangerpants » Wed Apr 20, 2016 3:09 pm

If Bob is blessed with heavenly guidance in this thread, I demand recognition for the saintly patience I have been granted also.

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henry quirk
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Post by henry quirk » Wed Apr 20, 2016 3:26 pm

How about this...

Scrap the tax code.

At the end of the year: every one pays ten percent on income, with any one making $20,000 and under not payin' diddly.

So, Joe, making $30,000 as a teacher pays his ten, and Eloise, makin' $3 million by way of multiple investments, pays her ten, and Warren, making $25,000 as ladder-back chair maker, pays his ten, and Louis, who digs ditches and only brings home $15,000, pays nuthin'.

No exemptions, exceptions, loopholes, reimbursments, or refunds...just one rate for everyone with a cutoff for those below a (barely) living wage.

Simple, direct, transparent, easy to track...so?


And: Flash, yer a saint.

bobevenson
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Re: The Most Despotic Taxes Known to Mankind

Post by bobevenson » Wed Apr 20, 2016 3:40 pm

As I said, it is the government's responsibility to ensure (which, by the way, it doesn't) that there is no inflation, and that can only be accomplished by controlling the supply of money. Anyway, since money is a medium of exchange (of property, of course) taxation of property is paid for by that money, and it doesn't make any goddamn difference where the money comes from, and please, don't make me go over this bullshit again!

FlashDangerpants
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Re: The Most Despotic Taxes Known to Mankind

Post by FlashDangerpants » Wed Apr 20, 2016 4:15 pm

bobevenson wrote:As I said, it is the government's responsibility to ensure (which, by the way, it doesn't) that there is no inflation, and that can only be accomplished by controlling the supply of money.
The Fed already issues more currency when inflation slacks and reduces money supply when inflation high. Money supply is controlled, and there's nothing like enough money in the system for what you describe.

If you print an extra 80 Trillion dollars, you are repeating what the Germans did in the 30s, and what Zimbabwe did a few years ago. The result is well known, the word for it is Hyperinflation.
bobevenson wrote:AAnyway, since money is a medium of exchange (of property, of course) taxation of property is paid for by that money, and it doesn't make any goddamn difference where the money comes from, and please, don't make me go over this bullshit again!
It does matter though. It matters because you have decoupled taxes from incomes without compensating by reducing your tax burden. That means that lots of high incomes will pay very little tax. And that in turn means that lots of smaller incomes have to make up the difference.

It does actually matter for lots of other reasons too. But I am trying to keep this within your range possible understanding.

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Re:

Post by FlashDangerpants » Wed Apr 20, 2016 4:29 pm

henry quirk wrote:How about this...

Scrap the tax code.

At the end of the year: every one pays ten percent on income, with any one making $20,000 and under not payin' diddly.
10% doesn't cover it I'm afraid. GDP is a rough measure of all the incomes in an economy (based on the principle that all the money sloshing around eventually becomes a wage for somebody). The numbers for GDP are in effect the best available estimate for this -even though it is by a proxy. So we can sort of use the world's least impressive equivalence formula to arrive at GDP = Collected wages of the nation (but in this instance "=" means 'very roughly, sort of in principle' ).

According to figures cited at Wikipedia that don't seem entirely right to me...
The US govt spends 41% of GDP per year. With a tax burden is rated at 25% of GDP.
I thought the balance was roughly 35 and 30, so I'm not presently minded to stick with Wikipedia... but I'm about to go to the pub, which is better than the internet, so I am accepting it at face value for now!

Either way, if other taxes are dropped, and if the US is to continue to meet its inescapable obligations (i.e. non-discretionary spending + debt repayments), I would estimate you couldn't do this with less than 30%, and that would require pretty savage cuts to spending. If you keep the no taxes for low earners bit, your other number goes up.

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