6 ms·

What would happen if we shifted away from income tax to property taxes and import tariffs at the federal level? (adjusted as needed to be "revenue neutral")

douche 10y ago
a.k.a the way things worked before the First World War (OK, 1913, but close enough). The size and cost of government has increased so astronomically beyond the levels that existed under that earlier taxation regime that it's hard to imagine.
RUG3Y 10y ago
I personally would prefer some kind of flat tax. Property tax is despicable. In effect, you rent your own property from the government. Can't pay the taxes? Then they take it from you. It happens to people on fixed incomes often enough.
- twblalock 10y ago
  Your property costs the government money. Did you think your electricity, power, water, natural gas, roads, garbage collection, schools, police, and firefighters don't cost anything to maintain?
  - RUG3Y 10y ago
    I pay for most of the things you mentioned out of my own pocket. My kids go to private school. Currently, property tax pays for some of those things, but only because our system is structured to work that way. Without getting into a long, drawn out discussion, I believe that there could be better ways to pay for those things.
    - gumby 10y ago
      My kid went to private school as well but I benefit from free public education the same way I benefit from a good public health system: other people are somewhat educated and healthy meaning.
      - twblalock 10y ago
        If people were to pay only for the government services they actually used, we would need some way to determine which ones they used. How would that be accomplished? The only way to do it would be to evaluate everyone's usage of government services. Some kind of bureaucracy would need to do that, and it would be large, because there are a lot of people to evaluate. How would we pay to run that bureaucracy? More taxes. So, even if public education didn't benefit society as a whole, there is still a pretty good reason everyone should pay for it.
        RUG3Y 10y ago
        It's not taxes I object to. I think taxing income is much better than taxing property. I believe that we should have a right to our own property - I don't believe we should have to "rent" the right to keep what belongs to us from any government.
        twblalock 10y ago
        In what way is taxing income any more fair or just? After all, our income belongs to us just as our property does. It seems odd to object to one but not the other on this basis.
        gumby 10y ago
        In order to "own" something you need to be able to control it. That is, you could in theory build a huge wall, have appropriate armaments etc to keep people from stealing your stuff. Or you can outsource most of that to the government to do things like maintain the ground book, have a police force etc. You don't have to dispute a lot line with your neighbour because you have common resource that records that. Someone can't come and claim you didn't pay for it (or come in and claim they did) because those records are maintained. They also manage the stuff that's harder, not simply more expensive, to maintain such as that paint factory upstream that wants to dump their waste into the water. Sure, in theory you could try to do that all on your own but then you'd have no time to read hn.
  - logfromblammo 10y ago
    This dead horse has been well-beaten in countless libertarian-friendly discussion forums. "How will you pay for the roads?" has been posed to libertarians as a rhetorical question so frequently that it is now a warning flag that means your discussion counterpart has never bothered researching the opposing position even one iota before judging against it. Generally speaking, the problem with this variety of debate is that the unstated premises of the opposing positions are completely irreconcilable. A large fraction of all libertarians believe that taxation is not necessary to provide vital services usually provided by governments, and that any service that cannot be supported by any means other than taxation is, by definition, not necessary to provide at all. Beyond that large problem with your post, I should also mention some anecdotes. My electricity, water, and garbage removal are provided by private businesses. I have no natural gas service. My local public schools are cash strapped, because one of the two counties that the school district spans won't transfer an appropriate portion of their property taxes to the school district. The local police engage in enforcement-for-profit. The town I lived in previously had a volunteer fire department with facilities and equipment paid for largely by private donations and fundraisers. One of the roads I drive on daily has been a construction zone for more than two continuous years, just so that the city can install a sidewalk to nowhere. Besides that, property does not attend public school. Children attend school, and the number of children per hectare is not a fixed ratio. The unmetered, non-utility services that governments actually do provide are largely dependent on absolute population size and population density, not on acreage. I would think that a capitation would be more appropriate, but capitations are usually considered regressive taxes, and disproportionately burdensome to the poor. You don't provide services to property, but to the people that live on it. Why not just tax the people directly?
    - twblalock 10y ago
      > "How will you pay for the roads?" has been posed to libertarians as a rhetorical question so frequently that it is now a warning flag that means your discussion counterpart has never bothered researching the opposing position even one iota before judging against it. I'm familiar with the libertarian arguments. There is no need for me to mention them every time I make an argument of my own. Omission does not imply ignorance -- I know the libertarian arguments, but I just don't take them seriously enough to mention them every time I talk about taxes.
  - Broken_Hippo 10y ago
    Property itself doesn't cost the government much: Improvements do. But there are many other ways to pay for the same sorts of services without the same sort of financial burden. I'd much rather someone be able to live in their home (or stay in their business) once it is paid for than risk losing it over property taxes. Some folks pay for their own garbage collection, btw, and still pay for property tax. Some places only have volunteer firefighters, which don't get public funding for equipment outside of donations. If you need ideas on how to tax folks without property taxes: 1. Income taxes without so many deductions, and a simple tax code. It is perfectly acceptable to give allowances for dependents, for example, or having a smaller rate for folks that earn less. Similar could be done for businesses. 2. Automatic sales tax, preferably included in the shelf price. Including it in the price makes it easy for folks to forget and easier to increase: Exemptions are OK at times (groceries, for example). This could be extended to include many business supplies. 3. A different sort of luxury tax for non-necessary services and items - such as fast food and convenience services, jewelry, and other such things. In addition, you could extend this tax to make tiers for some sorts of things: vehicles, for example: More sales tax upfront for vehicles that are over the median price, that are less fuel efficient, newer than x years, or other such things. 4. Higher fuel tax and vehicle fees coupled with improved public transportation, increased taxes on vehicles that are harder on roads (heavier vehicles, etc). Realistically, folks in cities with mass transport could pay a higher price because it is less of a necessity. In addition, some things could change to make the services more cost-effective. Police, for example: Indiana has 3 levels of police: State, county, and city. You could combine these and make better use of resources and have less waste. Same can be said with schools, especially funding schools. As it is, poorer areas have less money for schools when it could be pooled statewide and distributed fairly instead. Property-tax funded schools don't save us from this underfunding, and neither will other district-based taxation. The difference in these sorts of taxes is that they depend on your income and consumption. They are a bit unfair to poorer folks, but if the welfare system is fair, it can account for these sorts of things (by giving money to cover taxes instead of expecting businesses to take away the tax). I know this list isn't perfect or all that well thought out, but gives examples around the stuff.
    - twblalock 10y ago
      > As it is, poorer areas have less money for schools when it could be pooled statewide and distributed fairly instead. Property-tax funded schools don't save us from this underfunding, and neither will other district-based taxation. I'm very much in favor of redistributing school funding, but that's not a tax decision -- it's a spending decision. If something like that ever happens, the money is likely to come from property taxes, as it currently does -- it will just be distributed in a different way.
  - ovulator 10y ago
    only the last three things are covered by my property taxes. Everything else is handled by private companies who I pay separately (yes even roads where I live). Regardless, the property tax could be moved to an income or sales tax instead, so if your income drops and you can't pay your taxes you don't risk losing your home.
- Roboprog 10y ago
  Imagine if every 50 years or so all the land was seized and redistributed among the people/families. How diabolical! https://en.wikipedia.org/wiki/Jubilee_(biblical) https://en.wikipedia.org/wiki/Jubilee_(biblical) Of course, this doesn't actually happen. (Rabbis don't like being lynched, I'm sure)
twblalock 10y ago
Vastly reduced government income, as well as reduced trade leading to recession. There is simply no way to make it revenue-neutral unless the tariffs are so high that foreign trade is almost entirely eliminated.
cptskippy 10y ago
Property taxes are usually the county's way of generating revenue. Assuming the Federal Government could come up with mileage rates for the entire country and survive the huge backlash from the transition... Businesses with small footprints would see a tax benefit. Businesses would probably start implementing mandatory work from home policies and reduce their office space. Most businesses rent so property holders would feel the tax burden and rents would go up significantly. Businesses would also start moving to locations with cheaper mileage rates. Businesses would start downsizing their office spaces at the detriment of employees. Businesses have already started the practice of selling their property assets and then renting them for other reasons, this would only increase. In the end you'd be penalizing businesses that need store fronts to operate and encouraging more teleworking. Tariffs would only affect a small portion of business and you might see an increase in manufacturing in the US but that would depend on the property taxes. With both you'd be missing large business segments. Service providers that don't need physical locations or produce products would have to pay no taxes? That's basically a potential free ride for any call center operator, software development firm, or any other company that can outsource or telework it's staff.
- random28345 10y ago
  > Most businesses rent so property holders would feel the tax burden and rents would go up significantly. Property holders would feel the tax burden, decreasing the net revenue from rent, and decreasing property values. Rents are already at "market rates", and property values adjust to reflect the return on renting property. There might be some short-term price fluctuations as property owners try to maintain their existing margins, but an efficient market for real estate will stabilize rents close to the existing prices. The real losers would be those who purchased real estate assets expecting a consistent future return.
  - dragonwriter 10y ago
    > Rents are already at "market rates", Rents are at market rates given current market conditions. Increasing costs to hold property by imposing new taxes on property holders decreases supply of rental property -- that is, it reduces the quantity supplied at any given price point -- which, with a normally-shaped demand curve, decreases the quantity traded and increases the market clearing price. Market prices aren't independent of market conditions.

douche 10y ago

a.k.a the way things worked before the First World War (OK, 1913, but close enough). The size and cost of government has increased so astronomically beyond the levels that existed under that earlier taxation regime that it's hard to imagine.

RUG3Y 10y ago

I personally would prefer some kind of flat tax. Property tax is despicable. In effect, you rent your own property from the government. Can't pay the taxes? Then they take it from you. It happens to people on fixed incomes often enough.

twblalock 10y ago
Your property costs the government money. Did you think your electricity, power, water, natural gas, roads, garbage collection, schools, police, and firefighters don't cost anything to maintain?
- RUG3Y 10y ago
  I pay for most of the things you mentioned out of my own pocket. My kids go to private school. Currently, property tax pays for some of those things, but only because our system is structured to work that way. Without getting into a long, drawn out discussion, I believe that there could be better ways to pay for those things.
  - gumby 10y ago
    My kid went to private school as well but I benefit from free public education the same way I benefit from a good public health system: other people are somewhat educated and healthy meaning.
    - twblalock 10y ago
      If people were to pay only for the government services they actually used, we would need some way to determine which ones they used. How would that be accomplished? The only way to do it would be to evaluate everyone's usage of government services. Some kind of bureaucracy would need to do that, and it would be large, because there are a lot of people to evaluate. How would we pay to run that bureaucracy? More taxes. So, even if public education didn't benefit society as a whole, there is still a pretty good reason everyone should pay for it.
      - RUG3Y 10y ago
        It's not taxes I object to. I think taxing income is much better than taxing property. I believe that we should have a right to our own property - I don't believe we should have to "rent" the right to keep what belongs to us from any government.
        twblalock 10y ago
        In what way is taxing income any more fair or just? After all, our income belongs to us just as our property does. It seems odd to object to one but not the other on this basis.
        gumby 10y ago
        In order to "own" something you need to be able to control it. That is, you could in theory build a huge wall, have appropriate armaments etc to keep people from stealing your stuff. Or you can outsource most of that to the government to do things like maintain the ground book, have a police force etc. You don't have to dispute a lot line with your neighbour because you have common resource that records that. Someone can't come and claim you didn't pay for it (or come in and claim they did) because those records are maintained. They also manage the stuff that's harder, not simply more expensive, to maintain such as that paint factory upstream that wants to dump their waste into the water. Sure, in theory you could try to do that all on your own but then you'd have no time to read hn.
- logfromblammo 10y ago
  This dead horse has been well-beaten in countless libertarian-friendly discussion forums. "How will you pay for the roads?" has been posed to libertarians as a rhetorical question so frequently that it is now a warning flag that means your discussion counterpart has never bothered researching the opposing position even one iota before judging against it. Generally speaking, the problem with this variety of debate is that the unstated premises of the opposing positions are completely irreconcilable. A large fraction of all libertarians believe that taxation is not necessary to provide vital services usually provided by governments, and that any service that cannot be supported by any means other than taxation is, by definition, not necessary to provide at all. Beyond that large problem with your post, I should also mention some anecdotes. My electricity, water, and garbage removal are provided by private businesses. I have no natural gas service. My local public schools are cash strapped, because one of the two counties that the school district spans won't transfer an appropriate portion of their property taxes to the school district. The local police engage in enforcement-for-profit. The town I lived in previously had a volunteer fire department with facilities and equipment paid for largely by private donations and fundraisers. One of the roads I drive on daily has been a construction zone for more than two continuous years, just so that the city can install a sidewalk to nowhere. Besides that, property does not attend public school. Children attend school, and the number of children per hectare is not a fixed ratio. The unmetered, non-utility services that governments actually do provide are largely dependent on absolute population size and population density, not on acreage. I would think that a capitation would be more appropriate, but capitations are usually considered regressive taxes, and disproportionately burdensome to the poor. You don't provide services to property, but to the people that live on it. Why not just tax the people directly?
  - twblalock 10y ago
    > "How will you pay for the roads?" has been posed to libertarians as a rhetorical question so frequently that it is now a warning flag that means your discussion counterpart has never bothered researching the opposing position even one iota before judging against it. I'm familiar with the libertarian arguments. There is no need for me to mention them every time I make an argument of my own. Omission does not imply ignorance -- I know the libertarian arguments, but I just don't take them seriously enough to mention them every time I talk about taxes.
- Broken_Hippo 10y ago
  Property itself doesn't cost the government much: Improvements do. But there are many other ways to pay for the same sorts of services without the same sort of financial burden. I'd much rather someone be able to live in their home (or stay in their business) once it is paid for than risk losing it over property taxes. Some folks pay for their own garbage collection, btw, and still pay for property tax. Some places only have volunteer firefighters, which don't get public funding for equipment outside of donations. If you need ideas on how to tax folks without property taxes: 1. Income taxes without so many deductions, and a simple tax code. It is perfectly acceptable to give allowances for dependents, for example, or having a smaller rate for folks that earn less. Similar could be done for businesses. 2. Automatic sales tax, preferably included in the shelf price. Including it in the price makes it easy for folks to forget and easier to increase: Exemptions are OK at times (groceries, for example). This could be extended to include many business supplies. 3. A different sort of luxury tax for non-necessary services and items - such as fast food and convenience services, jewelry, and other such things. In addition, you could extend this tax to make tiers for some sorts of things: vehicles, for example: More sales tax upfront for vehicles that are over the median price, that are less fuel efficient, newer than x years, or other such things. 4. Higher fuel tax and vehicle fees coupled with improved public transportation, increased taxes on vehicles that are harder on roads (heavier vehicles, etc). Realistically, folks in cities with mass transport could pay a higher price because it is less of a necessity. In addition, some things could change to make the services more cost-effective. Police, for example: Indiana has 3 levels of police: State, county, and city. You could combine these and make better use of resources and have less waste. Same can be said with schools, especially funding schools. As it is, poorer areas have less money for schools when it could be pooled statewide and distributed fairly instead. Property-tax funded schools don't save us from this underfunding, and neither will other district-based taxation. The difference in these sorts of taxes is that they depend on your income and consumption. They are a bit unfair to poorer folks, but if the welfare system is fair, it can account for these sorts of things (by giving money to cover taxes instead of expecting businesses to take away the tax). I know this list isn't perfect or all that well thought out, but gives examples around the stuff.
  - twblalock 10y ago
    > As it is, poorer areas have less money for schools when it could be pooled statewide and distributed fairly instead. Property-tax funded schools don't save us from this underfunding, and neither will other district-based taxation. I'm very much in favor of redistributing school funding, but that's not a tax decision -- it's a spending decision. If something like that ever happens, the money is likely to come from property taxes, as it currently does -- it will just be distributed in a different way.
- ovulator 10y ago
  only the last three things are covered by my property taxes. Everything else is handled by private companies who I pay separately (yes even roads where I live). Regardless, the property tax could be moved to an income or sales tax instead, so if your income drops and you can't pay your taxes you don't risk losing your home.
Roboprog 10y ago
Imagine if every 50 years or so all the land was seized and redistributed among the people/families. How diabolical! https://en.wikipedia.org/wiki/Jubilee_(biblical) https://en.wikipedia.org/wiki/Jubilee_(biblical) Of course, this doesn't actually happen. (Rabbis don't like being lynched, I'm sure)

twblalock 10y ago

Vastly reduced government income, as well as reduced trade leading to recession. There is simply no way to make it revenue-neutral unless the tariffs are so high that foreign trade is almost entirely eliminated.

cptskippy 10y ago

Property taxes are usually the county's way of generating revenue. Assuming the Federal Government could come up with mileage rates for the entire country and survive the huge backlash from the transition... Businesses with small footprints would see a tax benefit. Businesses would probably start implementing mandatory work from home policies and reduce their office space. Most businesses rent so property holders would feel the tax burden and rents would go up significantly. Businesses would also start moving to locations with cheaper mileage rates. Businesses would start downsizing their office spaces at the detriment of employees. Businesses have already started the practice of selling their property assets and then renting them for other reasons, this would only increase. In the end you'd be penalizing businesses that need store fronts to operate and encouraging more teleworking. Tariffs would only affect a small portion of business and you might see an increase in manufacturing in the US but that would depend on the property taxes. With both you'd be missing large business segments. Service providers that don't need physical locations or produce products would have to pay no taxes? That's basically a potential free ride for any call center operator, software development firm, or any other company that can outsource or telework it's staff.

random28345 10y ago
> Most businesses rent so property holders would feel the tax burden and rents would go up significantly. Property holders would feel the tax burden, decreasing the net revenue from rent, and decreasing property values. Rents are already at "market rates", and property values adjust to reflect the return on renting property. There might be some short-term price fluctuations as property owners try to maintain their existing margins, but an efficient market for real estate will stabilize rents close to the existing prices. The real losers would be those who purchased real estate assets expecting a consistent future return.
- dragonwriter 10y ago
  > Rents are already at "market rates", Rents are at market rates given current market conditions. Increasing costs to hold property by imposing new taxes on property holders decreases supply of rental property -- that is, it reduces the quantity supplied at any given price point -- which, with a normally-shaped demand curve, decreases the quantity traded and increases the market clearing price. Market prices aren't independent of market conditions.