Base taxes on net worth only.

well not to defend the person you were responding to... but to think nobody would buy property is silly too... even people who rent an apartment are paying property taxes, but they don't tell you, they just charge you rent... that rent is based on the cost to purchase their asset, and the cost to maintain that asset, including the annual property taxes in states that have them... so people would still be paying, it would just be done by their landlord who owns it, and the cost passed along to them... why do you think rents go up almost every year for people, property taxes and cost of maintaining the asset go up annually...

now you could argue, some property would decrease in value, especially in areas where they currently don't have property taxes, however in some areas values would go up as well... there would be many changes as the entire system adjusts to this guys wacky concept... (I disagree with his arguments this method would work or solve any issues so I'm not trying to support it, just point out the flaw in your argument as well as his)

 

don't forget to mention...

all while on a fixed income that leaves no extra money to afford the annual taxes on their net worth... so they would be forced to liquidate their asset (home) and move into someone elses property just to be able to pay their taxes... (simple reasons like this are why I often wonder if people think through their ideas)

 

Soooooo your solution, is the government, who we pay taxes to, should buy the home for the appraised value that nobody else is willing to pay for it, and then what, sell the property for a loss? in which case they will have to raise taxes to cover all the losses that will occur annually... so its a downward spiral... as more homes lose value and they hot sell them at a loss, it lowers the property values of all the other homes in the neighborhood, making more people sell at appraised price, forcing more homes to be sold for a loss... down and down we go... where we stop nobody knows...

you see how thats an awful solution?

why did home values drop on average 50% during the last financial crisis... because there was nobody willing to shell out the money for them... you would create this mortgage crisis on a regular basis repeated over and over again if the government bought homes at appraised values and then dumped them on the market to get rid of them... this coincidentally is the entire reason we have unemployment insurance... because eons ago people learned if people buy homes, and then lose their ability to pay for them because a factory closes or they were laid off, home values of all the neighbors would quickly suffer as more and more sold below value... so they created unemployment to make sure mortgages and basic needs could be covered and keep the stored value of homes in neighborhoods... you're basically be undoing the entire purpose behind that program...

so many pitfalls with this idea...

 

when was the last time the government did something the way it should be done... when was the last time you saw a government budget or revised budget or proposal that was anywhere near accurate???

like I said... the spirit behind what you say is well meaning and good, however the application of it in the real world would be disastrous... if I had a nickel every time the government was wrong with estimates, I'd have every nickel they ever made... and they'd still owe me one more for being wrong about estimating that...

 

Why don't we just tax the money that people do not need to pay their bills and stuff?
Why give tax breaks to people who have more money than they could ever possibly spend while making poor people pay tax on their food?
How is that fair?

 

Property tax is actually two different taxes lumped together. You have the tax on the land and then you have the tax on the improvements (if there are any). Taxes on land cannot be passed to the tenant or to anyone else, they are strictly a burden on the landowner at the time the tax is levied. After land value taxes are levied they become burdenless, and nobody is made poorer because of them. Taxes on improvements can be passed in accordance to the elasticity of supply and demand. Land value taxes (which are a part of property taxes) can't be passed to tenants because the supply of land is fixed. Taxing land even up to its full value cannot reduce the supply of land and therefore doesn't create increased scarcity. No increased scarcity means no higher prices to tenants. Land value taxation just reduces the exchange value (price) of land.

Taxes on improvements (such as a house) do cause scarcity which will likely lead to increased prices/rents. Taxes on land value do not cause scarcity (because land is fixed in supply) and therefore do not lead to increased prices/rents.

 

Those "pensioners" have an extremely unstable economy right now due to speculation with property and other asset. Defending the rights of those speculators through the current tax system and forcing the middle class to pay for the protections afforded only the wealthy who practice conspiracy to embezzle with law makers, bankers and brokers prevents a more stable system to be tested based on piecemeal presuppositions rather than a holistic model. The question is; Would more pensioners have a higher retirement income to insure that their properties are protected if the property and asset values were stable, prices were not inflated,etc. Face it, the current system is a "flim-flam" structure that facilitates a boom/bust cycle for the benefit of warmonger fascists. Researching an alternative in depth and using computer modeling to work out the details is a worth while exercise. The more people that test the theory(particularly skeptics)the better quality the outcome.

 

clearly you've never own many different lands... when commercial land I owned was near a new stadium built, it went up dramatically in value while the building itself maintained its usual annual increases (ironic the stadium land was sold to them for $1 heh, normally land that cheap would drag down my values in practice)... and residential land I owned on a lake, dramatically went up as rich folks started building mcmansions and began paying insane prices for vacant farmland around the other side of the lake... causing my land value to dramatically rise once again while the building didn't gain any value, I mean it was just a summer cottage for crying out loud...

so use all the fancy words you want from some first year economics book, reality is, land value can go up dramatically, and that increase can and will get passed along to tenants... happens every day... sorry to burst the theory of whatever book you read this year, just wait till 4th year economics, everything you learned in 1st year is worthless, will make you wonder why you paid for that year... heh...

land is a great investment, because its so expensive to make more of it... just ask china how much its costing to build all those new islands! or mnahattan when they filled in all those shoreline spots... buy it and plant some crops to get take breaks until its worth selling off... at least it'll keep neighbors far enough away from you!

 

So you realize the near impossiblilty of determining the net worth of every citizen and confirming that net worth each and every year? How would I determine the worth of all my guitars, works of art, my computers and TV's, my cars, my dog, etc etc etc. What about differentials in propety vaules across the country.

What about my privacy rights?

We don't tax property at the federal level in only real property at the state and local levels and even there face difficulties in those assessment.

 

Geofree will agree with you that the landowner greedily expects a free ride as the community makes land valuable for him.

You failed to address, however, the fact that land value taxes cannot be passed on.

An increased property tax amount is an indicator that market value has gone up, but that doesn't mean the property tax has been passed on to the tenant/buyer.

 

how can you say taxes can NOT be passed on to tenants?

there is no law stating I can't raise rent because my property taxes increase, or more specifically the land portion of that property tax...

so when I raise rent annually to adjust for property taxes, increased water rates, increased electrical facility rates, increased everything... and I pass that along to my renters... whats logic are you trying to use to say its not being passed along to them? I pass ALL COSTS along to them... thats how I keep making money and keep my property... because I pass the costs along to them so I can continue to afford it, and make a profit at the same time...

 

You're able to charge more annually because the market rent has goes up, not because you are pass on the property tax.

 

I don't know if it's been mentioned, but a net worth tax is impossible. Most people don't keep their wealth in cash, so they'd have to sell off their possessions in order to pay their taxes. You guys want to be taxed 15% of what your house is worth? You'd have to sell your house to pay it off.

 

That proposal will never pass. President Trump will veto it.

 

Okay, what about a guy that owns a business? Let's say you try taxing a guy who owns a pizzeria that is worth a million dollars. A 10% tax means 100 grand. If he doesn't have that 100 grand in cash, he has to sell his business. And just what small business owner keeps 100 grand in cash just lying around? Inflation would eat you alive.

But let's say he actually has 100 grand in the bank. He takes that money out of the bank and gives it to the government. That's not helping the bank any, now is it?

And what about anybody that wants to bring money into the states? As soon as they invest it, they're gonna get taxed on their investment? That's not the greatest incentive you could come up with. There wouldn't be any toyotas being made in kentucky if Reagan had come up with this hairbrained idea. There wouldn't be anything being made anywhere in the states because a wealth tax is telling people "don't bring your money to America!"

- - - Updated - - -

That idiot is the one that came up with the idea of a wealth tax.
http://edition.cnn.com/ALLPOLITICS/stories/1999/11/09/trump.rich/index.html?_s=PM:ALLPOLITICS

 

"Simple" sounding reasons that delete basic truths are either just as, or more, ill considered or are intentionally misleading. First, all taxes can be framed as "punitive" to someone. Second, introducing one exemption, say for the first $200,000.00 of one(the primary residence) to all would address this problem without need of the current burdensome tax code. Third, I find it both disingenuous and short sighted to have someone deny out of hand a view that is founded on an equitable principle while holding up as an alternative, a "long con", that they are themselves benefiting from and/or can only expect to be the victim of in the long run. Now please, share with us how you "think that through."

 

Anyone who has bought home owners insurance or renters insurance has valued the property in their home and depreciated it over time. With today's computing capabilities the tables would not be difficult. People who claim deductions for tax write offs keep receipts and inventories all the time. If a citizen finds this unfamiliar or burdensome then they have no property to deduct in the current system anyway and may have to learn some basics, but would do well to have those things insured anyway.

 

This would be moot with this model. The current tax code and all it's nuances would be replaced with the simplicity of "no other taxes, no deductions or exemptions" unless voted into place by a two thirds majority popular vote. Taxes currently being paid to sales, income, school, added value this, cigarette that, etc. would all disappear. Those moneys would then be available for protecting property, the net worth tax. This would raise rental prices, but since overly inflated property values will have been adjusted to their true and more stable value the change may be the same or lower in relation to income. The number of people willing to invest in rental properties may reduce some based on initial perception but then as land values correct to their non-inflated state this will be less of a deterrent. Holding on to resources in the anticipation of price increases and other forms of speculation will minimize and resource efficiency will skyrocket. Prices and true values of all products will stay as close to a state of oneness as is possible with any system. The decision to improve your rental property or sell it will be a very cut and dried decision that the owner and his/her banker can determine with some simple tables and little or no speculation.

 

Placing a minimum dollar/quantity(a quantity of some asset valued below a certain threshold but owned in quantity, making it taxed) or other standardized criteria may make this more practical in terms of calculation but if it is not kept simple it opens doors to inequity.

 

Not 15%. 4.25% And no, you would not have to sell your house because you will have saved in many other ways in relation to income. Such as 10.75% in taxes, provided you were only paying 15%. Inflated prices. Other taxes above and beyond the income tax. This is a whole different picture that warrants some consideration and is very easy to tweak equitably.