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I'm going skiing this weekend. I own my car, skis and the rest of the equipment I'll need to get there and enjoy a couple days on the slopes, but if I were to r

by curun1r 11y ago

I'm going skiing this weekend. I own my car, skis and the rest of the equipment I'll need to get there and enjoy a couple days on the slopes, but if I were to rent those items, there would be taxes paid, both in sales tax and on the profits made by the rental companies. So, if I were in the NL should their government require me to pay taxes on the items I own due to it depriving the government of the taxes I'd be generating by renting everything? Would that tax vary depending on how many times I used my equipment? That seems nonsensical and creates an ad absurdum situation...would someone be taxed for cooking their own meals since restaurants pay taxes? > Economically there is no good reason to distinguish between these two cases The good reason is property rights. The ability for people to own things and use them as they see fit is almost a requirement for a free society. Governments have established that by creating rules and an environment where commerce can take place, they can collect taxes on that commerce. But I agree with the post you're replying to...creating fictional commerce and then taxing it doesn't seem right. If you're looking for a difference between the two cases you present, it's that the government is willing to act as an arbiter in any dispute that would result between landlord and tenant. When the landlord and tenant are the same person, there's no need for the government to be involved. Note that this shouldn't preclude governments from collecting property taxes, just from differentiating between landlords and people who occupy their own homes.

yummyfajitas 11y ago
Governments have established that by creating rules and an environment where commerce can take place, they can collect taxes on that commerce. This implies that things like dividends should not be taxed, since no commerce occurs. All that happened is a piece of property split into two. Would you favor this outcome? If not, why not? Now personally, I'm in favor of eliminating all taxes on capital income (and capital, e.g. property taxes). Economically, the best tax is a consumption tax; you live in a home, you pay taxes on the value of living in it. No property tax, no income tax, etc. Potentially such taxes could also be levied at the time of purchase, as they would be with a pair of skis. But that's a political non-starter; our western systems of taxation are built around the lie that the rich benefit disproportionately from our society. A consumption tax, which taxes people based on the benefits they receive rather than the value they create for others, would automagically reveal that lie.
- curun1r 11y ago
  > This implies that things like dividends should not be taxed, since no commerce occurs. All that happened is a piece of property split into two. Would you favor this outcome? If not, why not? I'm fine with that, so long as the corporate tax side of the equation balances...companies use dividends to reduce their income and the taxes they pay. If a dividend is just splitting an asset in two, it shouldn't be deductible.
  - yummyfajitas 11y ago
    Dividends are paid with after-tax income. You might be confusing them with distributions paid by pass-through entities (where corporate income is treated as personal income by the owners).
- tomp 11y ago
  > the lie that the rich benefit disproportionately from our society Why do you consider that a lie? There's a reason why kidnappers try to target rich people's kids... because rich people are willing to pay much more to gave their kid back - they literally value the kid's life more (in money terms). Another perspective is, a geting injured/killed will deprive a rich person of a lot of consumption, but a poor person of just a little consumption. Therefore, by protecting rich people, governments provide more value than by protecting poor people. > Now personally, I'm in favor of eliminating all taxes on capital income (and capital, e.g. property taxes). Economically, the best tax is a consumption tax; you live in a home, you pay taxes on the value of living in it. No property tax, no income tax, etc. What about income tax? What about corporate tax (personally, I think it makes sense, because it's a choice - you don't need to pay corporate tax, but they you don't get the privileges of the corporation being a separate entity)?
  - yummyfajitas 11y ago
    For the most part, rich people produce far more than they consume. Poor people consume far more than they produce. Consumption inequality is vastly lower than income inequality. I'm opposed to income tax as well. A consumption tax is the best tax, since it's both a) hard to dodge, b) transparent and c) doesn't penalize investment. In principle an income tax is equivalent to a consumption tax, but in practice taxing labor income but not capital income induces all sorts of tax avoidance schemes that treat labor income as if it were capital income.
jackcosgrove 11y ago
"creating fictional commerce and then taxing it doesn't seem right" The ACA case that decided the legality of the individual mandate also had the effect of prohibiting the government from instigating commerce for the purpose of regulating it. Note that the tax-penalty (can it be both at the same time? Can light be a wave and a particle at the same time?) over not having health insurance is not a tax on commerce in health insurance; it is a penalty for violating the individual mandate. So the court has ruled that it can penalize people for violating the law under its taxing power, but also that the government cannot instigate commerce. The only way then to tax imputed rent would be to mandate that property owners rent their dwellings out. This in turn would be a violation of government instigation of commerce. A catch-22. So not only does it not seem right, it doesn't seem legal.

by curun1r 11y ago

yummyfajitas 11y ago

Governments have established that by creating rules and an environment where commerce can take place, they can collect taxes on that commerce. This implies that things like dividends should not be taxed, since no commerce occurs. All that happened is a piece of property split into two. Would you favor this outcome? If not, why not? Now personally, I'm in favor of eliminating all taxes on capital income (and capital, e.g. property taxes). Economically, the best tax is a consumption tax; you live in a home, you pay taxes on the value of living in it. No property tax, no income tax, etc. Potentially such taxes could also be levied at the time of purchase, as they would be with a pair of skis. But that's a political non-starter; our western systems of taxation are built around the lie that the rich benefit disproportionately from our society. A consumption tax, which taxes people based on the benefits they receive rather than the value they create for others, would automagically reveal that lie.

curun1r 11y ago
> This implies that things like dividends should not be taxed, since no commerce occurs. All that happened is a piece of property split into two. Would you favor this outcome? If not, why not? I'm fine with that, so long as the corporate tax side of the equation balances...companies use dividends to reduce their income and the taxes they pay. If a dividend is just splitting an asset in two, it shouldn't be deductible.
- yummyfajitas 11y ago
  Dividends are paid with after-tax income. You might be confusing them with distributions paid by pass-through entities (where corporate income is treated as personal income by the owners).
tomp 11y ago
> the lie that the rich benefit disproportionately from our society Why do you consider that a lie? There's a reason why kidnappers try to target rich people's kids... because rich people are willing to pay much more to gave their kid back - they literally value the kid's life more (in money terms). Another perspective is, a geting injured/killed will deprive a rich person of a lot of consumption, but a poor person of just a little consumption. Therefore, by protecting rich people, governments provide more value than by protecting poor people. > Now personally, I'm in favor of eliminating all taxes on capital income (and capital, e.g. property taxes). Economically, the best tax is a consumption tax; you live in a home, you pay taxes on the value of living in it. No property tax, no income tax, etc. What about income tax? What about corporate tax (personally, I think it makes sense, because it's a choice - you don't need to pay corporate tax, but they you don't get the privileges of the corporation being a separate entity)?
- yummyfajitas 11y ago
  For the most part, rich people produce far more than they consume. Poor people consume far more than they produce. Consumption inequality is vastly lower than income inequality. I'm opposed to income tax as well. A consumption tax is the best tax, since it's both a) hard to dodge, b) transparent and c) doesn't penalize investment. In principle an income tax is equivalent to a consumption tax, but in practice taxing labor income but not capital income induces all sorts of tax avoidance schemes that treat labor income as if it were capital income.

jackcosgrove 11y ago

"creating fictional commerce and then taxing it doesn't seem right" The ACA case that decided the legality of the individual mandate also had the effect of prohibiting the government from instigating commerce for the purpose of regulating it. Note that the tax-penalty (can it be both at the same time? Can light be a wave and a particle at the same time?) over not having health insurance is not a tax on commerce in health insurance; it is a penalty for violating the individual mandate. So the court has ruled that it can penalize people for violating the law under its taxing power, but also that the government cannot instigate commerce. The only way then to tax imputed rent would be to mandate that property owners rent their dwellings out. This in turn would be a violation of government instigation of commerce. A catch-22. So not only does it not seem right, it doesn't seem legal.