4 ms·

Land taxes are one of the few taxes that don't disincentive productive activity. Are there any others like it (aside from externality taxes)?

Ericson2314 5y ago
They really are excellent taxes. If you are a Keynsian though, other distributive are also good as they "unlock" more demand which is the bootstrapping tension for the everything else.
- deleted 5y ago
  [deleted]
minikites 5y ago
Taxes on financial transactions, e.g. https://en.wikipedia.org/wiki/Tobin_tax https://en.wikipedia.org/wiki/Tobin_tax
- fighterpilot 5y ago
  I'm not sure I agree. This only doesn't disincentive productive activity if you think that secondary financial markets (including speculation and market making on those markets) aren't contributing anything productive. I'm of two minds about this but I lean towards the notion that speculation is a net value add. Think about the trillions raised in the secondary market, which is all contingent on valuations set by supply and demand, where these valuations are determined by speculators. The more accurate the speculators are, the more productive the capital is that's injected into the secondary market. So I think we definitely don't want to disincentive the institutional speculation that happens, which is what a tax would do. On the other hand we want to disincentive retail hype bubbles like GME, which lead to the opposite to the above - capital going the wrong way. However it's not clear to me that the tax would achieve that. Retail hype seems rather price inelastic. The bitcoin craze in late 2017 was good evidence of this, since fees for trading crypto are very high.
everybodyknows 5y ago
Luxury goods Progressivity on residential structure value i.e. “mansion tax”
- deleted 5y ago
  [deleted]
- nostrademons 5y ago
  Taxes on luxury goods actually discourage economic activity more than income taxes, because the elasticity of luxury goods is very high. It's just that the average voter doesn't care that this economic activity is discouraged because they never partake in it anyway.
nostrademons 5y ago
Anything that's a monopoly good whose supply is fixed & unchangeable. Things like the electromagnetic spectrum, satellite orbitals, fisheries, carbon emissions, rights-of-way, drilling rights, etc. Note that there's a bit of a continuum between "natural resource" and "externality" - on one hand you have something like land, on the other carbon emissions, but those are just two sides of the same concept. If we moved to a system where data about a person was owned by the person rather than the corporate entity that collected the data, then usage of that data is another good candidate for taxation.
- snidane 5y ago
  The reason why these "taxes" are efficient is really because they are payments for privileges the monopolists get from the government on behalf of the community. They are perfect pay-per-use scheme, the more privilege you consume, the more you pay. One can argue whether these are really taxes or just privilege fees. That's why groups such as single-tax or zero-tax propose that society can be run efficiently without taxes, because really the only "taxes" you need are those monopoly based ones.
dcolkitt 5y ago
Theoretically, any good with a perfectly inelastic supply.

Ericson2314 5y ago

They really are excellent taxes. If you are a Keynsian though, other distributive are also good as they "unlock" more demand which is the bootstrapping tension for the everything else.

deleted 5y ago
[deleted]

minikites 5y ago

Taxes on financial transactions, e.g. https://en.wikipedia.org/wiki/Tobin_tax https://en.wikipedia.org/wiki/Tobin_tax

fighterpilot 5y ago
I'm not sure I agree. This only doesn't disincentive productive activity if you think that secondary financial markets (including speculation and market making on those markets) aren't contributing anything productive. I'm of two minds about this but I lean towards the notion that speculation is a net value add. Think about the trillions raised in the secondary market, which is all contingent on valuations set by supply and demand, where these valuations are determined by speculators. The more accurate the speculators are, the more productive the capital is that's injected into the secondary market. So I think we definitely don't want to disincentive the institutional speculation that happens, which is what a tax would do. On the other hand we want to disincentive retail hype bubbles like GME, which lead to the opposite to the above - capital going the wrong way. However it's not clear to me that the tax would achieve that. Retail hype seems rather price inelastic. The bitcoin craze in late 2017 was good evidence of this, since fees for trading crypto are very high.

everybodyknows 5y ago

Luxury goods Progressivity on residential structure value i.e. “mansion tax”

deleted 5y ago
[deleted]
nostrademons 5y ago
Taxes on luxury goods actually discourage economic activity more than income taxes, because the elasticity of luxury goods is very high. It's just that the average voter doesn't care that this economic activity is discouraged because they never partake in it anyway.

nostrademons 5y ago

Anything that's a monopoly good whose supply is fixed & unchangeable. Things like the electromagnetic spectrum, satellite orbitals, fisheries, carbon emissions, rights-of-way, drilling rights, etc. Note that there's a bit of a continuum between "natural resource" and "externality" - on one hand you have something like land, on the other carbon emissions, but those are just two sides of the same concept. If we moved to a system where data about a person was owned by the person rather than the corporate entity that collected the data, then usage of that data is another good candidate for taxation.

snidane 5y ago
The reason why these "taxes" are efficient is really because they are payments for privileges the monopolists get from the government on behalf of the community. They are perfect pay-per-use scheme, the more privilege you consume, the more you pay. One can argue whether these are really taxes or just privilege fees. That's why groups such as single-tax or zero-tax propose that society can be run efficiently without taxes, because really the only "taxes" you need are those monopoly based ones.

dcolkitt 5y ago

Theoretically, any good with a perfectly inelastic supply.