Let's see.... Fewer people would invest in property because of the increased tax burden, making property owners a minority in the electorate. Then non-taxpaying voters would notice that they can vote in officials who give them free stuff. Then taxpaying property owners would declare a tax strike.
At that point the system would be reformed, peacefully or not. Either the burden of taxation would be shared more evenly across the electorate, or a new electorate would consist entirely of taxpaying property owners.
My only question is: why does Reihan Salam want to start a civil war?
All this brings up an interesting point: the saving grace of the USA's hideously complex tax code is that practically everyone complains about paying taxes. Maybe that's what holds the country together.
All costs are transferable. So, whether you rent or own, you will pay property tax -- just like today. In my hometown, one prominent landlord sent out letters to his tenants telling them that, if an upcoming school levy passed, their rents would be raised. The same transfer goes for commercial property as well. If the "single tax" was levied, one conceivably could compute the portion of the cost of a gallon of milk attributable to the cumulative taxation through the supply chain.
My issue with property taxes is that the government gets into the estimation business. I'd prefer a sales tax because it seems less likely to distort market behaviors and is less susceptible to political manipulation.
Regarding renting, there is a huge problem with that in many eastern states: rent control.
As for estimation, we can create good incentives. If the government estimates the value at X, and you can't sell it for at least 95% of X (lets say in 6 months), then the government must buy it at X.
At that point the system would be reformed, peacefully or not. Either the burden of taxation would be shared more evenly across the electorate, or a new electorate would consist entirely of taxpaying property owners.
My only question is: why does Reihan Salam want to start a civil war?
All this brings up an interesting point: the saving grace of the USA's hideously complex tax code is that practically everyone complains about paying taxes. Maybe that's what holds the country together.
(I'm joking, but only a little bit).