New, simplified geoist-style tax code..

Discussion in 'Budget & Taxes' started by DeathStar, Mar 15, 2012.

  1. DeathStar

    DeathStar Banned

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    If we eliminated all 3 of the income and sales and corporation taxes and replaced it with progressive land taxation (such that less total taxation happened but it was shifted towards discouraging greedy land occupation), what does your little mind think would be the advantages and disadvantages of that?
     
  2. Meta777

    Meta777 Moderator Staff Member

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    My little mind thinks that assuming the tax were to remain revenue neutral relative to today's tax
    and assuming that there was an accurate way to measure the value of any particular piece of land,
    that such a thing would lead to a more efficient utilization of the scarce land resources and therefor more overall productivity,
    I think that it could gradually start to slow down the increase in the wealth gap, perhaps even reverse it,
    I think that taxes overall could be made simpler simply by having fewer taxes,
    and I think that the income, sales, and corporate taxes would not be missed.

    I don't think there would be any inherent dangers in a land tax that aren't already present in today's taxes.
    I don't see how removing general taxes on income, sales, and corporations would add to the risks,
    if such taxes are replaced and assuming they weren't specifically intended to discourage a particular activity.
    I think the success of land tax would largely depend on the level of progressiveness, and more importantly, our ability to accurately assess the value of land.

    -Meta
     
  3. Roy L

    Roy L Banned

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    Here, read and learn:

    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1103567
     
  4. Meta777

    Meta777 Moderator Staff Member

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    Why does DeathStar keep getting banned? o_O
     
  5. General Fear

    General Fear New Member

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    Replacing all taxes with one national land tax has many advantages. Especially if there is a high tax on capital gains that is linked to land sale.

    < crude example alert >
    Today, if someone buys a piece of land and just sits on it, then they can sell it at a higher price later. That person has made money and has contributed nothing. Buy making real estate investment unattractive, then, people will have to put their money into more productive investments like a small business.

    Financial investment in Wall Street will sour. No more capital gains or taxes on dividends. No more double taxation.

    Productive efforts will be rewarded. Today's tax code punishes success. The more you make, the more you owe in taxes. A national real estate tax is similar to a flat tax. The more money you make, the lower the tax you owe. You basically incentivise the eoconomy to make more and more money to help pay off that tax bill. That's off course if you own land.

    People who do own land will try to squeeze out as much value as they can out of the land. A well developed piece of land will earn more money. So people will want to develop their land so they can earn money and pay the tax man.

    Government will want to own less land. The more land the government owns, the less income for them. So they will want to privatize as much as possible so people can start paying taxes.

    A tax on land is a good idea. But today's taxes is a political football that no politician wants to give up. By gaming the system, politicians use the tax code to bring home the bacon which means political contributions go up. I don't see you can do that with a real estate tax.
     
  6. dudeman

    dudeman New Member

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    That says it all. A model for total failure based upon land distribution. The USA will soon be a total failure for an analogous process (the Affordable care act, i.e. "Obamacare"). A land tax is simply another socialist/communist attempt to make farmers pay for people that are stealing from the pot (i.e. lawyers primarily along with government officials).

    Disadvantages: Those who have skills with regard to farming have no incentive to do anything because the profit margin has been decreased.

    Advantages: None.
     
  7. geofree

    geofree Active Member

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    Obviously you know nothing of economics.

    Replacing other taxes with a land value tax would increase the profit margin of farming.

    Land value taxation would decrease the profit margin of landownership&#8230;but many farmers don&#8217;t own the land they farm and would be far better off with the abolishment of other taxes.

    Land value taxes do not discourage farming or any other activity. That is why so many great economists have endorsed the tax -- it is the only tax that doesn&#8217;t distort the economy, it doesn&#8217;t raise consumer prices or reduce producer profits -- it just makes land cheaper to purchase. Cheaper land prices and fewer taxes makes it easier for people to enter into the farming occupation.
     
  8. Meta777

    Meta777 Moderator Staff Member

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    Wait...That doesn't make any sense,...
    Wouldn't there be more of an incentive for them to use their skills to be as productive as possible so as to better pay for the land they hold, or to sell it away to someone who needs it more and or to someone who is better able to use it for productive purposes?

    It seems to me that the big disincentive of a progressive land tax is to people who hold large quantities of land and don't use it to produce anything.

    -Meta
     
  9. dudeman

    dudeman New Member

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    you don't understand the concept of "inheritance". Many landowners inherit land and a tax imposed upon that land above and beyond the outrageous "property taxes" (i.e. education unions primarily) would be a burden to those that have land and grow food. Why not tax wealth and income? Or would that redistribute some of YOUR wealth?
     
  10. Meta777

    Meta777 Moderator Staff Member

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    I'm not against a wealth tax and I actually think an overall wealth tax would be preferable to a pure land tax only system, and honestly I'm not against an income tax either though I think that it would be unnecessary if either a wealth tax or a progressive/tax neutral land tax were to replace it....

    But why/how exactly would a land tax disincintivise people from farming?
    And what exactly does inheritance have to do with it???...

    -Meta
     
  11. geofree

    geofree Active Member

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    Land value taxes would nearly eliminate capital gains on land sales. As the earning potential of a particular land parcel increases, the tax also increases, which means that the land will not gain exchange value in the market.

    You might find this informative: http://chestofbooks.com/finance/economics/Outlines-Of-Public-Finance/95-Land-Taxes-Are-Often-Called-Burdenless-Taxes.html
     
  12. dudeman

    dudeman New Member

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    Let's tax those that grow lawns. Dandelions are 100 % edible (flower, root and leaf), essentially non-toxic and extraordinarily robust due to the seed dispersal system and root structure. Why should anyone grow Kentucky bluegrass for display when that land is available for harvesting? I could collect a lot of taxes from Beverly Hills, CA residents and redistribute that wealth as part of my beer fund.
     
  13. geofree

    geofree Active Member

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    Private ownership of land caused the Irish Potato Famine. The Irish farmers couldn&#8217;t keep what they produced. Read and learn:

    Land value taxation would have helped the Irish farm producers keep more of what they produced ... that is a fact.
     
  14. Meta777

    Meta777 Moderator Staff Member

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    dudeman. You're not making any sense. :(
    We aren't talking about a tax on plants here, but on the land itself.
    Though it could be said that certain plants might add value to a piece of land, some might even be said to take value away.
    Either way, what exactly is the issue that you have with land taxation, especially if it replaces another type of taxation?
    Is it that it will somehow cause people not to farm as much?
    Or is it that individuals who own only small insignificant plots of land will be taxed?

    -Meta
     
  15. dudeman

    dudeman New Member

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    Keep in mind, I don't own any large acreage of land. However, how will this tax be applied? Is it based upon topsoil content, area (i.e. length squared)? What about land in the desert that can not support crops? What about hilly land that isn't as effective at supporting crops? What is the basis of the tax? To punish those that do not use their land? From a capitalist perspective, it is their land - they can do what they want with it. If a group of thieves want to steal assets to redistribute, there are plenty of other targets (i.e. Beverly Hills millionaires) to try to steal from. Why not try stealing from someone who will punch you in the face back instead of stealing from the poor and victimized?
     
  16. geofree

    geofree Active Member

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    The rates of land value taxation is based on whatever individuals offer the state to exclude others from a parcel of land. Land near public infrastructure (such as a paved roadway) often times has more earning potential, so individuals will offer more tax to the state for excluding others from that land. As you move to less desirable land, usually further from public infrastructure and services, the amount individuals will offer drops off considerably, all the way to nothing. If you are the only person who wants to use a parcel of land (meaning you don’t need to forcefully exclude others) then you can use that land free of taxation, i.e., that taxes levied on that land would be zero. Even if you use land that isn’t taxed, the government would still protect your rights to whatever you produced on that land.

    Conversely, if you see some land outside of town that you feel you have a better use for than the current user, you can go to the courthouse and make an offer to pay slightly more taxes for that land. The county government would then raise the taxes on that land to meet your offer, the current user could either pay the higher tax rate or he would sell that land to you.
     
  17. Meta777

    Meta777 Moderator Staff Member

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    That's an excellent question.

    One could view it that way, but then one would also have to assume that income tax is a punishment to people for making money,
    while there may or may not be some truth and or even usefulness in that,
    it isn't the main reason for the tax.

    A more reasonable purpose is the same purpose that the majority of today's taxes have.
    To fund the government, and to try to balance the burden as fairly as possible,
    taxing more of those who are more able to pay and or who benefit the most from various government services.

    What do you mean steal from the poor and victimized?
    If the land tax is progressive, it is people who own the most land who will end up paying more.
    The poor do not own a significant amount of land, even collectively.
    They are in large part, renters.

    -Meta
     
  18. Roy L

    Roy L Banned

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    No, you just do not know any economics.
    Nonsense. How would it burden those who grow food? They would merely be paying the government for land instead of an idle landowner -- AND THEY WOULD NO LONGER BE PAYING OTHER TAXES FOR THE IDLE LANDOWNER TO POCKET.
    Because unlike land, wealth and income are not fixed in supply. Tax wealth, and there will be less wealth in society. Tax income, and people will work less and produce less in order to pay less tax on what they earn. But tax land, and the land will still all be there -- but will be used more productively.

    It ain't rocket science.
     
  19. Roy L

    Roy L Banned

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    I used to think so, too, but then I saw the cat: government spending on services and infrastructure all goes to landowners. It doesn't go to people who own factories, cars, ships, bank accounts, bonds, stocks, etc. They all have to pay landowners full market value for everything government provides. Any time you tax anything but land value, you are automatically creating a welfare subsidy giveaway to landowners.
    Income is The Wrong Thing To Tax.
     
  20. Roy L

    Roy L Banned

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    I have a better idea: let's try not to prove we are stupid.
    Were you under an erroneous impression that you were contributing something of meaning?
     
  21. Meta777

    Meta777 Moderator Staff Member

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    What form does government spending take when it reaches land owners? Usually financial wealth right?

    Sure it is. But it is acceptable in my opinion if something better is not readily available.
    A progressive wealth tax and or a progressive land tax is something better the way I see it,
    assuming that they are implemented in a way that is fair and functional.

    -Meta
     
  22. Roy L

    Roy L Banned

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    Then you would very likely be better off -- perhaps much better off -- under a land value tax system.
    Market value.
    Market value, as that is the measure of what the landowner is taking from society.
    No, to require them justly to compensate those whom they forcibly deprive of the opportunity to use it.
    And that is the problem with capitalism in a nutshell: what makes it "their" land other than forcible appropriation backed by government force?
    Oh, well, if you want to talk about thieves, read and learn:

    THE BANDIT

    Suppose there is a bandit who lurks in the mountain pass between two countries. He robs the merchant caravans as they pass through, but is careful to take only as much as the merchants can afford to lose, so that they will keep using the pass and he will keep getting the loot.

    A thief, right?

    Now, suppose he has a license to charge tolls of those who use the pass, a license issued by the government of one of the countries -- or even both of them. The tolls are by coincidence equal to what he formerly took by force. How has the nature of his enterprise changed, simply through being made legal? He is still just a thief. He is still just demanding payment and not contributing anything in return. How can the mere existence of that piece of paper entitling him to rob the caravans alter the fact that what he is doing is in fact robbing them?

    But now suppose instead of a license to steal, he has a land title to the pass. He now charges the caravans the exact same amount in "rent" for using the pass, and has become quite a respectable gentleman. But how has the nature of his business really changed? It's all legal now, but he is still just taking money from those who use what nature provided for free, and contributing nothing whatever in return, just as he did when he was a lowly bandit. How is he any different now that he is a landowner?

    And come to that, how is any other landowner charging rent for what nature provided for free any different?

    Those poor, victimized landowners! Oh, the humanity!
     
  23. Roy L

    Roy L Banned

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    Land rent and its capitalization, land value.
    Something better is not only readily available, but far cheaper to administer.
    One must be careful with progressive taxes, as people can distribute the tax base among their families, etc. to reduce their tax liabilities.
     
  24. Meta777

    Meta777 Moderator Staff Member

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    If that's what you mean by government spending,
    then why can that not be taxed in addition to other forms of wealth which also may come about from government spending?

    It seems that you are making an argument for why land should be taxed,
    but not one for why other forms of wealth should not be taxed as well. :/

    What do you mean?

    When I say progressive, I simply mean that those individuals who own more land and or wealth pay a higher percentage of the value in tax.

    -Meta
     
  25. Roy L

    Roy L Banned

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    Effectively all the value government spending on services and infrastructure creates ends up as land value, because you must pay a landowner full market value for access to the services and infrastructure government spending provides. It is true that some other types of government spending such as interest on debt, enforcing drug prohibition, and military adventures in foreign countries do not end up as land value, but they are expenses government should probably not be making in the first place.
    Government spending ends up as land value, which is identically equal to the minimum value of what the landowner expects to take from society and not repay in taxes. Once you understand why that must be so as a matter of economic law, everything else falls into place.
    Consider a man with a wife and three grown children who owns a billion dollars worth of land. If the tax is progressive, he can significantly reduce his land taxes by distributing the land titles among his wife and children.

    I favor making the land value tax progressive by extending a uniform, universal individual exemption roughly analogous to the income tax exemption, but that would not result in any significant redistribution of land to avoid the tax, as the exemption would only be for land you were living on (i.e., your address), and everyone has to live somewhere anyway.
     

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