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I always wonder how the farmer would deal with a wealth tax. Farmland, for example, is worth an incredible amount of money (where I live, at least), but cashflo
by randomdata 6y ago
I always wonder how the farmer would deal with a wealth tax. Farmland, for example, is worth an incredible amount of money (where I live, at least), but cashflow is marginal, and net incomes are often negative.
That would mean that the farmers would often have to sell off their land to cover a wealth tax on the land. Severing farmland is rarely permitted, so it would have to be entire parcels.
It seems like soon you'll find yourself without any land on which to farm. Which means that we'll start to carve out exemptions, like we already do with existing wealth taxes, and then the race to find loopholes begins.
- francisofascii 6y agoIf done properly, the tax would never be more than the annual net return of the farming activities. In theory, if the net gain is low, then the value of the land should also be low. If the land is worth an incredible amount, but not as a farm, well, that is a different problem worth solving. It will always be a never ending races to cover up new loopholes and create proper incentives.
- randomdata 6y ago> the tax would never be more than the annual net return of the farming activities. Doesn't that end up being nothing more than an income tax? Presumably the intent of a wealth tax is to capture from the benefits people have from holding things that do not normally return an income, such as housing. In fact, housing property is already taxed in many jurisdictions for that reason, so maybe not the best example of where a new wealth tax would benefit, but you get the idea.