Also, at the moment we only tax "land" -- meaning actual physical land, not space inhabited. Therefore, the truly rich could afford to construct difficult vertically engineered buildings, thus reducing their tax burden while simultaneously keeping a superhigh lifestyle. Meanwhile, many middle class who are wealthy enough to afford a home but not wealthy enough to afford a towering monstrosity would be taxed at a higher rate.
I am loath to use the term "wealth redistribution" because it tends to bring around the less thoughtful, but louder, segment of the population which rails against anything that remotely sounds like socialism. However, consider that this is one of the reasons for the progressive income tax. Essentially, money means less to you the more you have of it, especially considering that sustainable goods for comfortable life actually cost very little (thus meaning that taking ten percent of someone earning $35,000 dollars a year is far more likely to cut into their cost of living than taking ten percent of someone earning $500,000 dollars a year). One tax certainly introduces problems of point vulnerability, but it also brings up a problem with different taxes on different income brackets.
"Therefore, the truly rich could afford to construct difficult vertically engineered buildings, thus reducing their tax burden while simultaneously keeping a superhigh lifestyle."
If the tax rate is so high that this is a worthwhile use of a rich person's money, we've already lost.
Well, how high should we make it then? Remember, this is supposed to replace all other US federal tax, including income tax (I presume, maybe I misinterpreted the article).
In order to really answer your question, we'd need to attach some numbers to the problem, since it's all a matter of which is cheaper.
However, every time I try, I find the concept of "unimproved value of the land" coming apart in my hands. There's really no way to separate the value of the item on the land from what is on the land. Oh, we do talk about lot values, but that's ultimately an abstraction that once it actually started to matter would be subject to gaming and interpretation.
It isn't really meaningful to talk about the economic value of something that doesn't exist. You can only determine the value of something by seeing what people will actually give up to obtain the item. When you ask about something that doesn't exist, you are asking people to estimate what they might be willing to give up if the thing actually existed, and people are notoriously bad at that.
(Note that the failure is ultimately human, not economic; a being that was more rational about being able to hypothesize what they would give up might not have this problem, but we have to go to government with the beings we have, not the beings we wish we had. This metric would start game-able and get worse.)
So I guess my answer is I can't seem to wrap my head around what's actually being proposed enough to elaborate on what my point was meaningfully. Consider this a strike against this summary of the proposal. (Whether it applies to the original I don't know, and I don't care enough to go check.)
(... actually, if you want to get really meta, the problem is that even if you waved a magic wand and had this implemented, Congress would still have it mangled inside two years flat. Congress is the real problem here, or government, or special interests, etc. The tax system is more effect than cause.)
"Congress is the real problem here, or government, or special interests, etc. The tax system is more effect than cause."
We just need the Constitution, U.S. Code, and state laws on a DVCS. It wouldn't need to even be official; representatives would just essentially make the formal commit of publicly popular diffs, or lose reelection.
>> There's really no way to separate the value of the item on the land from what is on the land.
Sure there is. We know this because commercial real estate appraisers (whom I wrote software for for many years) do it all the time. The best method is to look for comparable unimproved properties, or to get a value on an improved property and then subtract the cost of the improvements. Not an exact science, but quite doable if you triangulate from several properties.
This isn't right. Property tax is almost always in proportion to the area of living space on the property.
Even anti-redistributionists acknowledge that taking 10% of the income of someone making $5e5 will reduce that person's lifestyle less than taking 10% of someone making $35k. I think the issue is more that this isn't the case -- the 500,001st dollar is taxed at a much higher rate than the 35,001st dollar.
I think it depends on the state -- certain states separate the taxes into Land Value Tax (LVT) and then actual "property" taxes, which is IIRC the improvement value of the building on the property. Both of these combined would be a real estate tax. I had assumed that they were taxing LVT, but the article is a little poor on details.
I think the issue is more that this isn't the case -- the 500,001st dollar is taxed at a much higher rate than the 35,001st dollar.
I can't quite tell if you are agreeing or disagreeing here. I was saying that the property tax is unfair in this case. There are many ways in which someone who has a high income could be taxed lower than someone with a lower income (which is what the progressive income tax is supposed to correct).
It is certainly possible for someone with a higher income to be taxed at an overall rate that's less than the overall rate of someone with a lower income. It is true that this subverts the plain-meaning intention of the tax system (though I am skeptical that at least some of those "loopholes" aren't unintended at all) but it's not obviously unfair.
I am loath to use the term "wealth redistribution" because it tends to bring around the less thoughtful, but louder, segment of the population which rails against anything that remotely sounds like socialism. However, consider that this is one of the reasons for the progressive income tax. Essentially, money means less to you the more you have of it, especially considering that sustainable goods for comfortable life actually cost very little (thus meaning that taking ten percent of someone earning $35,000 dollars a year is far more likely to cut into their cost of living than taking ten percent of someone earning $500,000 dollars a year). One tax certainly introduces problems of point vulnerability, but it also brings up a problem with different taxes on different income brackets.