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If people really wanted to tax the rich the majority of taxes would come from sales taxes and minority from property taxes. Eliminate income taxes including cap

If people really wanted to tax the rich the majority of taxes would come from sales taxes and minority from property taxes. Eliminate income taxes including capital gains taxes. Capital gains taxes are at a laughable rate anyways. Income taxes primarily tax the upper middle class not the rich or poor who either make no employment income or an insufficient amount. Everybody buys things though. To be fair to the poor eliminate food and water from sales taxes, which are not candy and soda. To be fair to everybody else eliminate deductions. Wealthy people who throw away money NFTs for $50 million should be charged a sales tax just as poor people who thrown away $100 per month on television packages. The argument against sales taxes is that they are a barrier to transaction frequency which is the heart of economic health, but they would cover everybody far more fairly. The only escape is to not purchase things. For most people wealth is tied to property, but just about everybody pays property taxes even if they don’t own property. For renters the expense of property taxes is indirectly passed to them as a basis of the rent. Higher property taxes burden more expensive property owners (and renters) disproportionately so it does tax the wealthy more, but not that much more since those expenses are redistributed in various ways through costs of living.

ainiriand 6y ago
Are you sure that you are thinking on a system that is fair to everyone and not just what is best for you? The core idea of taxes is that, to try and devise a system fair to everyone. The current system is not.
- kgwgk 6y ago
  Depends a lot on the definition of fair.
ajuc 6y ago
> If people really wanted to tax the rich the majority of taxes would come from sales taxes and minority from property taxes Why not the other way around? If you can't sell but can hold - people will hold and rent to others. We all played monopoly and know what the endgame is, right? If you want to tax the rich simply tax the rich - let's say 5% tax on any property over 1 000 000 USD.
- austincheney 6y ago
  Home ownership is living. Property rental is a business with risks not present in just ownership and is not always profitable. Property taxes effect home owners and landlords just the same, except landlords have to pass those expenses into rental prices if they wish to be in the green. > If you want to tax the rich simply tax the rich - let's say 5% tax on any property over 1 000 000 USD. You must be in California where the taxes are weird. Everybody already pays much more than 5% where I live.
  - ajuc 6y ago
    I'm in Poland :) I meant cumulatively. If you own 200 things worth 10 000 usd each you should still pay 5% for 100 of them. > Home ownership is living. If you really need to live in a million dollar house you should be able to pay for it. It's not living it's luxury.
    - austincheney 6y ago
      I completely agree. Property taxes determine who can live where in my area more than any other factor including property price. There are pros and cons to that. For example if you want to turn a poor area into an incredibly wealthy area, cough cough Southlake, you raise the property taxes every year until poor people can no longer afford to live there and are forced to sell.
  - yellowapple 6y ago
    > except landlords have to pass those expenses into rental prices if they wish to be in the green. Except they can't, because (barring artificial price ceilings like rent control) they're almost certainly already charging the optimal rent for maximum profit; if they could actually charge higher without losing money as a result, they already would have, property tax or no. The actual reason property tax increases rental prices is because it penalizes development, meaning developers are less likely to build denser housing, meaning less housing supply, meaning higher housing prices. That is what is happening when landlords hike up prices in response to property tax increases; they are responding to the shifting intersection of supply and demand. Replacing property tax (and every other tax, for that matter, but that's a good starting point) with a land value tax would alleviate this problem, since it inverts the penalties - namely, by penalizing those who don't develop, meaning developers are more likely to build denser housing, meaning more housing supply, meaning lower housing prices. In this case, landlords are locked in; they still have to respond to the shifting intersection of supply and demand in order to maximize profit, and in this case that intersection results in a lower optimal price point. Literally zero opportunity to price LVT into apartment rentals this way; any attempt to do so results in the landlord losing profit.
danpalmer 6y ago
Sales taxes aren't a particularly balanced way of taxation. Someone living paycheck to paycheck essentially spends all of their income, which means that they pay the full amount of sales tax possible for someone with that income. Compared to someone saving or investing who doesn't pay as much tax as they could. A little simplified because sales taxes typically don't apply to things like rent, but the point still stands. The best way to tax the "rich" is normally a wealth tax – taxing the retained wealth rather than income or outgoings (sales tax). This could be a direct wealth tax, a property tax, inheritance tax, all sorts of options but they all have similar effects, outsized on the rich, small on the poor.
- cameronh90 6y ago
  Sales taxes aren't the most balanced, but they are very easy to enforce and don't distort the economy very much. Standard wealth taxes are easy to avoid and have weird effects - but land value tax would probably be great. Unfortunately, people tend to vote against it.
  - sam_lowry_ 6y ago
    VAT is much easier to enforce than sales taxes, and as much as I dislike VAT, one can use it to enforce sustainable living and environmental policies. Think of 66% VAT applied to all products. Suddenly, repairing and extending lifetime of existing stuff becomes economically viable.
    - kgwgk 6y ago
      You would pay 66% VAT on repairs as well.
      - sam_lowry_ 6y ago
        Only on the added value, e.g. a new smartphone glass. Work will be relatively cheaper. One of the most reasonable proposals for UBI is to finance it through VAT. Some 15 years ago there was a party in Belgium that lobbied for UBI and they calculated that VAT should increase from 21% to 33% to finance UBI.
ivalm 6y ago
This is very backwards. As percentage of income poor people pay more than rich. If you want to tax über wealthy just tax wealth directly (let’s say 3% on all US citizens and residents on all things values above $10mil).
- JumpCrisscross 6y ago
  Wealth taxes basically guarantee that within a decade most wealth will be held in hard-to-value assets. It then becomes an arms race between lawyers and accountants. Given history, adding complexity to the tax system will benefit the rich at the expense of e.g. those of us with cash and stock and real estate. It would be a levy on the middle class.
  - bildung 6y ago
    Wealth taxes basically guarantee that within a decade most wealth will be held in hard-to-value assets. Why isn't this a problem in countries that already tax wealth, like France or Norway?
    - JumpCrisscross 6y ago
      > Why isn't this a problem in countries that already tax wealth, like France or Norway? The literature I’ve seen shows it is [1]. Anecdotally, France’s wealthy have more illiquid holdings and bespoke financial exposures than their American counterparts.(Counterfactual: There are many jurisdictions with wealth taxes [2].) [1] https://faktasiden.com/dokumenter/SSRN-id1268381.pdf https://faktasiden.com/dokumenter/SSRN-id1268381.pdf [2] http://qed.econ.queensu.ca/pub/cpp/Sept1991/Bird.pdf http://qed.econ.queensu.ca/pub/cpp/Sept1991/Bird.pdf
      - bildung 6y ago
        That first paper doesn't talk about about changes in asset allocation due to the ISF. It's main argument is losses due to capital flight.
  - 6y ago
dragonwriter 6y ago
> If people really want anted to tax the rich the majority of taxes would come from sales taxes and minority from property taxes. No, if people really wanted to tax the rich, it wouldn’t be by consumption taxes, as the rich have a lower marginal propensity to consume. That makes as much sense as taxing the rich via progressive income taxes, but making capital gains taxed at a lower top marginal rate with a less-progressive structure and labor income subject to special additional taxes. Both are tax-the-rich theater. If you want to tax the rich, use a progressive income tax and also: (1) treat capital income as normal income, not some specially favored category. (2) treat gifts and inheritances received as normal income, not some special category with exemptions that no non-rich person will ever exhaust. (3) treat labor income as normal income, not some special disfavored category with additional taxes on both the recipient and the provider of the income.
- austincheney 6y ago
  > If you want to tax the rich, use a progressive income tax and also: That sounds good in theory but it never works in practice, historically speaking. In practice there are exceptions, deductions, and compromises. It always disadvantages the non wealthy who are not in a position to argue for their special cases.
  - dragonwriter 6y ago
    > That sounds good in theory but it never works in practice, historically speaking. That’s because people in practice don’t do the “and also” part, but instead do something like the tax-the-rich theater of “‘taxing the rich’ via progressive income taxes, but making capital gains taxed at a lower top marginal rate with a less-progressive structure and labor income subject to special additional taxes.” Because, in practice, the wealthy write the laws, and use control of the mechanisms of mass communication to focus attention on the parts that sound good favorable to the common man (progressive structure) and then distract from the impact of the bits that let the rich off and soak the working and middle class (preferential treatment of capital, gifts, and inheritances and anti-preferential treatment of labor income.) Hence my focus and the “and also” bits that need to be part of a progressive income tax system for it to work properly.
Marazan 6y ago
Sales tax are a terrible, regressive, way of raising money.
- austincheney 6y ago
  Kind of like democracy is the worst form of government except for all the others. The issue here is fairness and ensuring the wealthy pay their share.
  - yellowapple 6y ago
    Except in this case quite literally every tax other than maybe sin taxes are leaps and bounds better than a sales tax. Even terrible taxes like income and payroll taxes are vastly preferable to sales tax when it comes to not disproportionately hurting low-income households. If you want to ensure the wealthy pay their fair share, a sales tax is about as counterproductive as it gets. Tax things with inelastic supply that rich people and large corporations are more likely to hoard. Land in particular is about ideal for this.
    - austincheney 6y ago
      Judging from all the comments here people don’t know what they want. They claim to want fair but then they make a bunch of unfair exceptions for poor people. They claim to want to tax the wealthy but not unless it’s full of exceptions that ultimately benefit the wealthy. > are leaps and bounds better than a sales tax. Define better. What should be the goal of taxation in only a numerical and objective way? From most of these comments the answer is something about land and wealth but void of any mention of taxable assets or specifically how to unfairly punish only certain persons.
      - yellowapple 6y ago
        > What should be the goal of taxation in only a numerical and objective way? To force the internalization of otherwise-externalized opportunity costs. > From most of these comments the answer is something about land and wealth but void of any mention of taxable assets or specifically how to unfairly punish only certain persons. From my comments in particular, the taxable assets would be things with inelastic supply, land being the most notable and prevalent and universally-understood example. Land ownership inherently externalizes opportunity costs onto every other individual member of society, so a tax on land ownership proportional to the rental value of that land (i.e. the value which can be derived from that land, and which others who would use that land are missing out on by being excluded from it - a.k.a. the opportunity cost thereof) would internalize those externalized costs, to everyone's benefit. As for the "unfairly punish" part, none of what's proposed here is unfair at all. If you're going to claim an area of land for your own exclusive use, then it's only fair that you pay the rest of society your due rent. That is, to distill the point here a bit: the idea is to penalize behaviors, not persons. For example, the behavior of hoarding land as an investment and speculating upon it is arguably one of the main drivers of skyrocketing housing costs, said costs being especially high for lower and middle class households relative to their income. Taxing the value of land penalizes hoarding land as an investment (indeed, it instead becomes a liability), thus resolving that particular housing cost driver and improving things considerably for the lower and middle classes.

ainiriand 6y ago

Are you sure that you are thinking on a system that is fair to everyone and not just what is best for you? The core idea of taxes is that, to try and devise a system fair to everyone. The current system is not.

kgwgk 6y ago
Depends a lot on the definition of fair.

ajuc 6y ago

> If people really wanted to tax the rich the majority of taxes would come from sales taxes and minority from property taxes Why not the other way around? If you can't sell but can hold - people will hold and rent to others. We all played monopoly and know what the endgame is, right? If you want to tax the rich simply tax the rich - let's say 5% tax on any property over 1 000 000 USD.

austincheney 6y ago
Home ownership is living. Property rental is a business with risks not present in just ownership and is not always profitable. Property taxes effect home owners and landlords just the same, except landlords have to pass those expenses into rental prices if they wish to be in the green. > If you want to tax the rich simply tax the rich - let's say 5% tax on any property over 1 000 000 USD. You must be in California where the taxes are weird. Everybody already pays much more than 5% where I live.
- ajuc 6y ago
  I'm in Poland :) I meant cumulatively. If you own 200 things worth 10 000 usd each you should still pay 5% for 100 of them. > Home ownership is living. If you really need to live in a million dollar house you should be able to pay for it. It's not living it's luxury.
  - austincheney 6y ago
    I completely agree. Property taxes determine who can live where in my area more than any other factor including property price. There are pros and cons to that. For example if you want to turn a poor area into an incredibly wealthy area, cough cough Southlake, you raise the property taxes every year until poor people can no longer afford to live there and are forced to sell.
- yellowapple 6y ago
  > except landlords have to pass those expenses into rental prices if they wish to be in the green. Except they can't, because (barring artificial price ceilings like rent control) they're almost certainly already charging the optimal rent for maximum profit; if they could actually charge higher without losing money as a result, they already would have, property tax or no. The actual reason property tax increases rental prices is because it penalizes development, meaning developers are less likely to build denser housing, meaning less housing supply, meaning higher housing prices. That is what is happening when landlords hike up prices in response to property tax increases; they are responding to the shifting intersection of supply and demand. Replacing property tax (and every other tax, for that matter, but that's a good starting point) with a land value tax would alleviate this problem, since it inverts the penalties - namely, by penalizing those who don't develop, meaning developers are more likely to build denser housing, meaning more housing supply, meaning lower housing prices. In this case, landlords are locked in; they still have to respond to the shifting intersection of supply and demand in order to maximize profit, and in this case that intersection results in a lower optimal price point. Literally zero opportunity to price LVT into apartment rentals this way; any attempt to do so results in the landlord losing profit.

danpalmer 6y ago

Sales taxes aren't a particularly balanced way of taxation. Someone living paycheck to paycheck essentially spends all of their income, which means that they pay the full amount of sales tax possible for someone with that income. Compared to someone saving or investing who doesn't pay as much tax as they could. A little simplified because sales taxes typically don't apply to things like rent, but the point still stands. The best way to tax the "rich" is normally a wealth tax – taxing the retained wealth rather than income or outgoings (sales tax). This could be a direct wealth tax, a property tax, inheritance tax, all sorts of options but they all have similar effects, outsized on the rich, small on the poor.

cameronh90 6y ago
Sales taxes aren't the most balanced, but they are very easy to enforce and don't distort the economy very much. Standard wealth taxes are easy to avoid and have weird effects - but land value tax would probably be great. Unfortunately, people tend to vote against it.
- sam_lowry_ 6y ago
  VAT is much easier to enforce than sales taxes, and as much as I dislike VAT, one can use it to enforce sustainable living and environmental policies. Think of 66% VAT applied to all products. Suddenly, repairing and extending lifetime of existing stuff becomes economically viable.
  - kgwgk 6y ago
    You would pay 66% VAT on repairs as well.
    - sam_lowry_ 6y ago
      Only on the added value, e.g. a new smartphone glass. Work will be relatively cheaper. One of the most reasonable proposals for UBI is to finance it through VAT. Some 15 years ago there was a party in Belgium that lobbied for UBI and they calculated that VAT should increase from 21% to 33% to finance UBI.

ivalm 6y ago

This is very backwards. As percentage of income poor people pay more than rich. If you want to tax über wealthy just tax wealth directly (let’s say 3% on all US citizens and residents on all things values above $10mil).

JumpCrisscross 6y ago
Wealth taxes basically guarantee that within a decade most wealth will be held in hard-to-value assets. It then becomes an arms race between lawyers and accountants. Given history, adding complexity to the tax system will benefit the rich at the expense of e.g. those of us with cash and stock and real estate. It would be a levy on the middle class.
- bildung 6y ago
  Wealth taxes basically guarantee that within a decade most wealth will be held in hard-to-value assets. Why isn't this a problem in countries that already tax wealth, like France or Norway?
  - JumpCrisscross 6y ago
    > Why isn't this a problem in countries that already tax wealth, like France or Norway? The literature I’ve seen shows it is [1]. Anecdotally, France’s wealthy have more illiquid holdings and bespoke financial exposures than their American counterparts.(Counterfactual: There are many jurisdictions with wealth taxes [2].) [1] https://faktasiden.com/dokumenter/SSRN-id1268381.pdf https://faktasiden.com/dokumenter/SSRN-id1268381.pdf [2] http://qed.econ.queensu.ca/pub/cpp/Sept1991/Bird.pdf http://qed.econ.queensu.ca/pub/cpp/Sept1991/Bird.pdf
    - bildung 6y ago
      That first paper doesn't talk about about changes in asset allocation due to the ISF. It's main argument is losses due to capital flight.
- 6y ago

dragonwriter 6y ago

> If people really want anted to tax the rich the majority of taxes would come from sales taxes and minority from property taxes. No, if people really wanted to tax the rich, it wouldn’t be by consumption taxes, as the rich have a lower marginal propensity to consume. That makes as much sense as taxing the rich via progressive income taxes, but making capital gains taxed at a lower top marginal rate with a less-progressive structure and labor income subject to special additional taxes. Both are tax-the-rich theater. If you want to tax the rich, use a progressive income tax and also: (1) treat capital income as normal income, not some specially favored category. (2) treat gifts and inheritances received as normal income, not some special category with exemptions that no non-rich person will ever exhaust. (3) treat labor income as normal income, not some special disfavored category with additional taxes on both the recipient and the provider of the income.

austincheney 6y ago
> If you want to tax the rich, use a progressive income tax and also: That sounds good in theory but it never works in practice, historically speaking. In practice there are exceptions, deductions, and compromises. It always disadvantages the non wealthy who are not in a position to argue for their special cases.
- dragonwriter 6y ago
  > That sounds good in theory but it never works in practice, historically speaking. That’s because people in practice don’t do the “and also” part, but instead do something like the tax-the-rich theater of “‘taxing the rich’ via progressive income taxes, but making capital gains taxed at a lower top marginal rate with a less-progressive structure and labor income subject to special additional taxes.” Because, in practice, the wealthy write the laws, and use control of the mechanisms of mass communication to focus attention on the parts that sound good favorable to the common man (progressive structure) and then distract from the impact of the bits that let the rich off and soak the working and middle class (preferential treatment of capital, gifts, and inheritances and anti-preferential treatment of labor income.) Hence my focus and the “and also” bits that need to be part of a progressive income tax system for it to work properly.

Marazan 6y ago

Sales tax are a terrible, regressive, way of raising money.

austincheney 6y ago
Kind of like democracy is the worst form of government except for all the others. The issue here is fairness and ensuring the wealthy pay their share.
- yellowapple 6y ago
  Except in this case quite literally every tax other than maybe sin taxes are leaps and bounds better than a sales tax. Even terrible taxes like income and payroll taxes are vastly preferable to sales tax when it comes to not disproportionately hurting low-income households. If you want to ensure the wealthy pay their fair share, a sales tax is about as counterproductive as it gets. Tax things with inelastic supply that rich people and large corporations are more likely to hoard. Land in particular is about ideal for this.
  - austincheney 6y ago
    Judging from all the comments here people don’t know what they want. They claim to want fair but then they make a bunch of unfair exceptions for poor people. They claim to want to tax the wealthy but not unless it’s full of exceptions that ultimately benefit the wealthy. > are leaps and bounds better than a sales tax. Define better. What should be the goal of taxation in only a numerical and objective way? From most of these comments the answer is something about land and wealth but void of any mention of taxable assets or specifically how to unfairly punish only certain persons.
    - yellowapple 6y ago
      > What should be the goal of taxation in only a numerical and objective way? To force the internalization of otherwise-externalized opportunity costs. > From most of these comments the answer is something about land and wealth but void of any mention of taxable assets or specifically how to unfairly punish only certain persons. From my comments in particular, the taxable assets would be things with inelastic supply, land being the most notable and prevalent and universally-understood example. Land ownership inherently externalizes opportunity costs onto every other individual member of society, so a tax on land ownership proportional to the rental value of that land (i.e. the value which can be derived from that land, and which others who would use that land are missing out on by being excluded from it - a.k.a. the opportunity cost thereof) would internalize those externalized costs, to everyone's benefit. As for the "unfairly punish" part, none of what's proposed here is unfair at all. If you're going to claim an area of land for your own exclusive use, then it's only fair that you pay the rest of society your due rent. That is, to distill the point here a bit: the idea is to penalize behaviors, not persons. For example, the behavior of hoarding land as an investment and speculating upon it is arguably one of the main drivers of skyrocketing housing costs, said costs being especially high for lower and middle class households relative to their income. Taxing the value of land penalizes hoarding land as an investment (indeed, it instead becomes a liability), thus resolving that particular housing cost driver and improving things considerably for the lower and middle classes.