Calculating and complying with current tax codes are a huge headache and costly time waster. We need one simple tax that is easy to calculate and pay. I propose to eliminate the current taxes except for one. The only tax that does not burden production and trade (two very beneficial activities) is the land value tax, which local government already calculate and collect. According to economists the land value tax is capable of funding all levels of beneficial government activities. "Not only was Henry George correct that a tax on land is non-distortionary, but in an equilibrium society ... tax on land raises just enough revenue to finance the (optimally chosen) level of government expenditure." Joseph Stiglitz, Nobel laureate in Economics (2001) "Economists are almost unanimous in conceding that the land tax has no adverse side effects. William Vickrey, Nobel laureate in Economics (1996) Land value taxation is also the most compatible with free markets. When you pay the land value tax the government gives you valuable land in return, the more taxes you pay the more land you get! "In my opinion the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago." Milton Friedman, Nobel laureate in Economics (1976) "The striking result is that a tax on rent will lead to no distortions or economic inefficiencies. Why not? Because a tax on pure economic rent does not change anyone's economic behavior. Demanders are unaffected because their price is unchanged. The behavior of suppliers is unaffected because the supply of land is fixed and cannot react. Hence, the economy operates after the tax exactly as it did before the taxwith no distortions or inefficiencies arising as a result of the land tax." Paul Samuelson, Nobel laureate in Economics (1970) I would estimate that eliminating inefficient and burdensome taxes would cause an immediate and permanent increase in wages of greater than 30%, while drastically lowering the costs of opening new businesses. So, let's talk about eliminating wasteful taxes.
In response to the underlined. 1. Not really..just takes a lil bit of 6th grade math. 2.Under what income bracket? Taxes are in your favor opening a business with less then 200k in the bank at the moment. You can lease, buy, equipment, and hire, and even gift,comp,or even travel employees pretty much for free. All that seems to help/encourage in my opinion.
Complying with existing tax codes is a multi-billion dollar a year business … all of which is a total waste. If there is an easier method to fund government – such as land value taxation – then we should seek to use that method. Under the land value tax system when you pay your taxes you get the land on which to place your business. There are no other taxes … just pay the fee for the land and you are tax free. Under a land value tax system you don't need those deductions, no matter how large or small the business, or the profits … because there are NO taxes on any of it.
1.Yes it is...no argument with that...So is alcohol, drugs an dealing with crime, or property protection. 2.Your land value thingy seems to want to bring back up the https://en.wikipedia.org/wiki/Feudalism_in_China Yea Texas wants that for some reason...dunno how that supports America.
But those wasteful things cannot be changed by simply eliminating other wasteful things, such as our tax code can. I'm not advocating a new tax, just the elimination of other wasteful taxes. I am talking about a major reduction in the machinery required to fund our government. Land value taxation is a move AWAY from feudalism, because everyone gets an equal right to land ... everyone gets some land just for being alive. John Locke only supported land value taxation Adam Smith (the father of capitalism) only supported land value taxation. Thomas Jefferson only supported land value taxation. Thomas Paine only supported land value taxation. Benjamen Franklin only supported land value taxation. Henry Ford supported heavy taxes on land values the way Henry George said. Winston Churchill gave many speeches pleading for a change to land value taxation. Milton Friedman (and at least 7 other Nobel prize winning economists) support/ prefer land value taxation above the alternatives. David Nolan (founder of the libertarian party) preferred land value taxation. For a more complete list of supporters, and supporting quotes, see the links below: http://earthfreedom.net/lvt-advocates http://wealthandwant.com/themes/quotable_nobels.htm http://wealthandwant.com/themes/quotable_notables.htm
The process and it's complexity is punishment. Which in a way is control. Which the big gov lefties all favor.
I beg your pardon, but most lefties don't support the land value tax (georgist) system, because it can only supply a limited amount of revenue. Land value taxation reduces government waste, but it cannot support a large government. Government would have to be smaller than it is today, to make it work. The land value tax argument is an argument for smaller (contained) government. It is believed that land value taxation would all but eliminate poverty, which would allow for a reduction of government spending, while retaining and improving beneficial services and infrastructure. Land value taxation is the only tax that doesn't "punish" production or trade, it only punishes those who hold valuable land idle, or put the land to inferior uses, and those who do that should be punished.
Upon further thought, I believe your comment may have been directed at the monstrosity we currently call our tax systems. If you were referring to our current tax systems, then I agree with you, and apologize for the hasty and misguided reply to your post.
In a free market, when you give government your money, you should get something of equal, marketable value in return. Taxes should not make you poorer. If you pay taxes and get nothing of value in return, then you are being robbed, simple as that.
I guess we slightly differ... I think a system that taxes land and improvements is the way to go, but we're pretty close I'm sure compared to others... but my one question and challenge I guess was how do you arrive at the conclusion it will create an increase of wages by 30% in doing so... I've run through thousands of calculations and figures and data sets with my idea, and I don't see a "wage increase" I see a "cost reduction" occurring almost immediate... so we don't make more, but life costs less... now I could make an argument, this will lead to a slow and steady increase in spending, and a slow and steady increase in employment, which would eventually deplete the work force and put pressure on wages in the long term... but I couldn't say it would have an immediate benefit, I would see this as years down the road... is that the angle you're taking with this, or could you explain how you come to the conclusion of an immediate and permanent increase in wages of greater than 30%... its quite a bold statement to make and I don't see how the mathematics gets you there as I cited above, I see it rolling out a different way under my own plan and numbers run... when we use the word immediate, I would give that a 12 month time frame... I just don't see that happening in 12 months, I see it as a 5 year goal realistically...
I will tell you but I don't think you will like the answer, at least not at first. This post will probably have to be long, so I apologize for that in advance. Also, that immediate 30% increase in wages that I spoke of would be tied to the incremental shifting of tax burdens, that would likely happen over many, many years. In other words, each incremental shift in tax burdens would immediately benefit wages but the process of shifting that tax burden will likely and unfortunately be a very long process. When you tax something you make it less valuable. We currently tax wages which makes wages less valuable. We also currently tax land (rent) very lightly which makes land more valuable. Shifting the burden of taxation off of wages and onto land value (rent) will therefore make wages more valuable and land less valuable. Using land value taxation as the primary source of government revenue implies a heavy land value tax; so heavy, in fact, that the EXCHANGE value of land will fall to near zero. Land parcels which were once worth millions of dollars, will trade in the open market for free, or very near free. The land value tax will supplant exchange prices as the pricing mechanism by which land is allocated. Land will no longer be an “investment” because it will never increase in exchange value; land prices will no longer exist, allocation will be determined strictly by who offers the most annual tax in exchange for a given parcel of land. So, trillions of dollars worth of current land wealth (privilege) will suddenly become worthless in exchange value, but with no corresponding decrease in actual societal wealth. Since land value taxation destroys all land based wealth (privilege), with no corresponding decrease in societal wealth, it is obvious that that wealth – which still exists but is no longer available to landowners – must be made available to the other factors of production (labor and productive capital). If you consider that government spending is 20% of GDP, and that wage taxes will be supplanted by land value taxes in paying that burden, then wages must rise by 20% of GDP. Note: shifting the burden of taxation onto land rent will also cause a rise in the value of productive capital, which – because of post length – I am ignoring in this argument. So, the shifting burden of taxation explains why LVT must result in a 20% increase in the value of wages. Next, taxes on labor, savings and trade create dead-weight losses within the economy, as they are extremely inefficient. The current tax systems are expensive to administer for government, and expensive to comply with for businesses. The complexity of current tax systems prevent many would-be entrepreneurs from engaging in business (self-employment). High land prices force newly created businesses to take out bank loans in order to acquire land, the interest paid to those bankers reduce the competitiveness of business. The current method of land allocation is inefficient, with “investors” buying land they do not even intend to use, many times leaving the land set idle, or under utilized. All of the above frictional costs, as well as others not mentioned, would be eliminated by switching to land value taxation. Finally, these 'frictional costs' must ultimately reduce societies ability to produce wealth. Since wealth is the reward for which labor engages in production, anything which reduces the amount of wealth society is capable of producing, must ultimately reduce the rewards which labor can receive for its effort. It is my opinion that removing these 'frictional costs' from the system would create an additional 10% increase in the amount of wealth available to labor in the form of wages. So shifting the burden of taxation will raise wages by 20% while reducing 'frictional costs' will increase wages by an additional 10%, thus my claim of a 30% increase in overall wage growth. Like it or not, this is the math I use to back my claim that switching to land value taxation would increase wages by 30%.
well you're right, I wouldn't like the answer, because its not based on any actual reality, just a presumption of how you want reality to work... I mean you still didn't prove how wages would increase by 30% other than say "wages will have to increase by 20%"... but you['re basing it all on hypothetical speculation if things worked the way you want, versus how things have worked throughout history... also you said all land would become worthless, well if it becomes worthless and has no value, how do you tax it fairly? I mean you said it would basically be an auction style of who will pay the most, whats to stop someone from coming in and taking your land out from under you, no real world security if any given year you could lose your property and everything you worked so hard for... you see where I am going with this... every result you say would happen, goes against everything a free market has already established would happen, and if we eventually reach this magical dream where land has no value, it would mean under your method we have no security but for 365 days... no years or a lifetime... are you just cutting and pasting someones blog without understanding the real world effects of things? and look I'm not trying to be nasty or mean, I'm just saying what you're suggesting would happen, is seriously unlikely when we have proven effects in some states already what happens when we only have certain types of taxes, we already know how economies respond and change, and nothing like you just mentioned above happened... and your claims of wage increase, is not wage increases in many of your examples, its an example of "cost reduction" like I eluded to in my first response... this isn't a wage increase when things cost less... ----------------- here's what I think would really happen ------------------------ taxing land (or land with improvements like I want) will not raise wages initially, things like the payroll tax will simply be absorbed by the company for their own profits, and employees will keep the same wages... people will now how an incentive to stay in poor areas longer, in order to pay lower taxes before they move to nicer areas... this will cause increased commerce in these areas as the people gradually making more money won't want to move to pay higher taxes, this is basic humane behavior... now more jobs will be created in these economic rough areas, and companies themselves will have incentive to move into these areas to lower their tax burdens as well, bringing more jobs and commerce into these areas than before, as normally they flee to where the money goes, now these areas will have viable local economies... the wealthy will still be wealthy, they will still want lake front properties, they will still want massive tracts of land for a retreat and family get-a-ways... they will pay higher taxes as these properties are worth way more than a ghetto home... they will continue to want these despite taxes increasing, especially since they have the wealth, and we've seen in history no matter how high or low the income taxes were, the wealthy managed to find excessive amounts of wealth to spend on property and keeping it, think of all the early estates of wealthy people when at some points in history they were paying close to 90% on income taxes, they still put most of their money into excessive estates and housing, I mean go no further than new york when you can live off manhattan for almost half what living on manhattan costs, yet they still live there... now that we've eliminated the need for the bulk of the IRS and a few other agencies who's entire job is to create burden, we can save hundreds of billions and lower our overall tax burden as a total nation... and now that we've gotten rid of sales taxes and gasoline taxes and utility taxes, etc etc etc the cost of living for the low and middle class americans will drop giving them more spending power, because the increase in their property tax bills, will be less than the cost reduction of the basic things they need daily just to survive and live, meanwhile the wealthy will be paying more to keep the status and amenities they want to have in their lives... this means the low and middle class who we know spend almost every penny they have, will have more spending power and buy more things and create more jobs slowly over time as companies hire to match the new demand created by them... as this hiring continues giving more people jobs and spending power, we'll reach a saturation point where its harder to get employees with so few left, which will put pressure on wages and increase them to match the supply and demand... further compounding this factor... meanwhile companies will be setting record profits because property taxes will be FAR less than all the payroll and income taxes they were paying before, they won't just raise wages to make people feel good, they'll pocket the cash or it'll end up being a stockholders dream... but now they will reach a point where competition for customers and volume drive them back to reducing costs and becoming more efficient again lowering prices further benefiting people on the lower end of the scale... companies who previously left america will be beating down the doors to come back and bring all those high wage executive and support positions with them, as they will now have access to the worlds top marketplace and all they have to do is pay property taxes... it will encourage america to become and stay the economic headquarter of the world giving us the advantage of ending up with the high-end jobs not just the low-end jobs, and all the middle-man jobs in between needed to facilitate this... but under no circumstances will land drop to zero value, it will remain expensive to live near a beach or lake, it will still remain expensive to live in popular cities, it will still remain cheap to live in city ghettos, and people will for longer periods before moving on to save themselves a lot of money giving them more economic wealth and freedom before moving along to the next and better place... and this won't upset the budget that greatly, as its all feasible and possible with todays immense budgets, we won't have to slash all government in order to make this work, we'll keep relatively the same budget minus several hundred billion being eliminated... so it won't disuprt or impact all programs and force changes or downsizing in order to make it work... and it doesn't destroy land value, it will cause adjusting by choice of people, but not destroy... but yeah this is the simplified version, it goes into far more complex math once we calculate current net worth of land, and then remove public owned land, so we can finally get down to whats owned commercially and residentially... and then apply the correct percent to meet almost the same budgetary needs we have today... and in this system it will be a top down cost style, those at the top will still be more than willing to pay for luxury, they always have in history, and those at the bottom will receive the break not just in taxes but the cost of basic living needs reduced, which will give them the power to jumpstart the economy even more... plus when a recession does occur in the future, land value will naturally be moderated and lowered, meaning there is a built-in measure that automatically reduces taxes to increase spending power of those on the lowest rung of the ladder who are often hurt the most in recessions... giving a natural rehab if you will of the economy without any lawmaker intervention needed... P.S. but yeah at least I can cite the total land value in america, then apply a set percentage, and show we can meet budgetary needs... your method claims it would reduce land value to nothing which means we couldn't tax it a set percentage based on value, which means someone who owns a block of land in the ghetto owns the same value of land someone with a million dollar home sitting on it has... and thats just seriously unrealistic and has no real world examples... if you tax those two people the same amount of land tax, people wouldn't be able to afford to live in ghettos, only the millionaires could afford to live on land... P.S.S. and further more, if you eliminate the value of the land, you will greatly impact the low and middle class economies as you erase a large portion of their net worth as nobody will want to buy land as it retains no value or growth in the future... what will all those looking to retire by selling their land do when its now worth nothing, and much of the current middle class is banking on it having value... thats a massive amount of theft of wealth you'd be committing against them... do you realize the impacts on society that would have when they finally sell that property and retire, it would disrupt a lot of their plans immensely... P.S.S.S. and to further pile on the issues... if the person who offers the most land tax gets the land, what happens when they make improvements on the land, and now have no money left and next year someone says they'll pay more, and this other person how can't pay more because they are tapped out, they are forced to give up the home they just built? you'll say something like they have to be given fair value for it? how can it be fair value when it naturally has a depreciated cost the day someone moves into it just like a car driven off a lot, so you could have wealthy people going around forcing people out of their homes simply because they have more money... is that the reality you're prepared to deal with? people being forced off land because someone with wealth wants that land instead? there are so many holes like I now remember in previous discussions we've had... now its all coming back where you didn't have any real world examples and it was all presumption and speculation based on a hope it went a certain way, versus the reality of events we have built up over centuries showing the likely results don't match...
