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Transfer payments don't need to be in the tax code. You can e.g. tax land at a higher rate and write all people a check for the same number. Sweden and Denmark

Transfer payments don't need to be in the tax code. You can e.g. tax land at a higher rate and write all people a check for the same number. Sweden and Denmark and the Netherlands have less progressive income taxes than the US. Rather than encoding transfers in the tax code, they perform them via programs, leaving them with a more redistributive system. > A wealthier person in a city could pay for an expensive skyscraper apartment or a taller or higher quality home on a narrow footprint and not pay significantly more tax than someone in a shorter house or lower apartment. Sounds like pro-social behavior. Today the rich buy shops in Manhattan and turn them into garages, lowering the value of the property and thus the tax revenue that New York gets. Rather than being rewarded for squandering, folks should be incentivized to make good use of the space they're taking up. If someone wants to turn a productive business into storage for their toys, that's fine, but we shouldn't be giving them a discount for doing it.

dan-robertson 5y ago
> Sounds like pro-social behaviour I don’t want to get sidetracked on whether or not the incentives are good, or even whether a regressive tax is bad. (Though I admit I sidetracked with my comment above.) The question is why a land value tax is progressive in a modern industrialised country with a services-based economy?
- caturopath 5y ago
  Who cares if a tax is progressive? There's no reason to care if a tax is progressive. The thing to care about is whether the government is redistributing wealth in a desired way. Progressive taxes are one way to redistribute wealth to the less wealthy. Payments are another. If you want a more progressive system in a LVT world, double the tax rate and then send people checks.
  - marcosdumay 5y ago
    Regressive taxes coupled with payments are a very powerful way to squeeze the lower ranks of the middle class, while preserving the rich and the higher middle class.
    - caturopath 5y ago
      You can just structure the payments however you like to prevent that.
      - marcosdumay 5y ago
        You can structure the rates however you like to place the squeeze at any place you want. If you structure it to completely get rid of the squeeze point you have just created a proportional or progressive tax.
        caturopath 5y ago
        You've created a progressive transfer system. Whether those transfer payments are via taxes, payments, or services is not essential for the goal. If you encode it in tax rates, you are subsidizing behavior that you are trying to deincentivize via taxes, which is unfortunate. The idea of LVT or other taxes on externalities is to tax behavior you want to prevent. That's why we should tax the capture of land, the pollution of the environment, adding traffic to a transportation system, etc. That's why it's unfortunate to tax things like "making your house nicer" or "converting a parking lot to a veterinarian office" or "hiring another employee". You wouldn't sent checks to someone because they let their house decay or they fired someone, so why would you give them a tax break? The point of the transfer system is to help people who need help, right? Not to discourage things we want to happen.
  - dan-robertson 5y ago
    Whether a tax is progressive or regressive tends to be quite a fundamental question economists ask. Lots of proponents of a land value tax claim the tax is progressive. So either they think that is a good argument in favour of it (in which case shouldn’t their argument be weakened if the tax is not progressive? Surely one should care about that?) or they think it is immaterial, but then why mention it at all?

dan-robertson 5y ago

> Sounds like pro-social behaviour I don’t want to get sidetracked on whether or not the incentives are good, or even whether a regressive tax is bad. (Though I admit I sidetracked with my comment above.) The question is why a land value tax is progressive in a modern industrialised country with a services-based economy?

caturopath 5y ago
Who cares if a tax is progressive? There's no reason to care if a tax is progressive. The thing to care about is whether the government is redistributing wealth in a desired way. Progressive taxes are one way to redistribute wealth to the less wealthy. Payments are another. If you want a more progressive system in a LVT world, double the tax rate and then send people checks.
- marcosdumay 5y ago
  Regressive taxes coupled with payments are a very powerful way to squeeze the lower ranks of the middle class, while preserving the rich and the higher middle class.
  - caturopath 5y ago
    You can just structure the payments however you like to prevent that.
    - marcosdumay 5y ago
      You can structure the rates however you like to place the squeeze at any place you want. If you structure it to completely get rid of the squeeze point you have just created a proportional or progressive tax.
      - caturopath 5y ago
        You've created a progressive transfer system. Whether those transfer payments are via taxes, payments, or services is not essential for the goal. If you encode it in tax rates, you are subsidizing behavior that you are trying to deincentivize via taxes, which is unfortunate. The idea of LVT or other taxes on externalities is to tax behavior you want to prevent. That's why we should tax the capture of land, the pollution of the environment, adding traffic to a transportation system, etc. That's why it's unfortunate to tax things like "making your house nicer" or "converting a parking lot to a veterinarian office" or "hiring another employee". You wouldn't sent checks to someone because they let their house decay or they fired someone, so why would you give them a tax break? The point of the transfer system is to help people who need help, right? Not to discourage things we want to happen.
- dan-robertson 5y ago
  Whether a tax is progressive or regressive tends to be quite a fundamental question economists ask. Lots of proponents of a land value tax claim the tax is progressive. So either they think that is a good argument in favour of it (in which case shouldn’t their argument be weakened if the tax is not progressive? Surely one should care about that?) or they think it is immaterial, but then why mention it at all?