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So why tax physical property? :)

by md_ 5y ago

teakettle42 5y ago
Why indeed? I think increasing property taxes based on unrealized gains estimated by tax assessors is fundamentally unjust.
- md_ 5y ago
  Maybe. This guy Arnold seems to take the position that the ProPublica piece is somehow invalid because…you can’t tax unrealized gains? 1. I don’t understand how the latter follows from the former. 2. Of course you can. Property taxes are just that. 3. Wealth taxes are also just that, though elsewhere in this thread I see Arnold has argued that they aren’t really that. Whether you should tax unrealized gains is a policy debate, but it’s not an outlandish or ignorant position to say you should—though ProPublica doesn’t say that, so I’m still not sure the relevance.
- whakim 5y ago
  While I disagree that property taxes are unjust, most date back 200+ years to a time when almost all wealth was in the form of land. If a state wanted to tax wealth, they taxed land. (Though this sounds progressive in theory, such taxes were almost universally levied at very low rates. Combined with very low inflation, this meant was it was very easy for the wealthy to accumulate capital by living off the rents of their land.)
makomk 5y ago
The way the US taxes physical property based on its current market value is pretty unusual these days, and I'm not sure it's a good idea. It seems to have all kinds of weird distortive effects on the market like encouraging train companies to rip up serviceable track to reduce their tax, incentivizing manufacturers to keep the bare minimum supply of components and materials in stock, and either causing increases in paper wealth due to a house price boom to mean people can no longer afford to keep a roof over their heads or leading to Proposition 13-like measures to prevent this that have their own negative effects. Everyone ultimately seems to pay the price for all these consequences of the US tax structure.
- DennisP 5y ago
  I may be wrong but I don't think the US taxes companies on the value of their inventory.

So why tax physical property? :)

by md_ 5y ago

So why tax physical property? :)

Why indeed? I think increasing property taxes based on unrealized gains estimated by tax assessors is fundamentally unjust.

md_ 5y ago
Maybe. This guy Arnold seems to take the position that the ProPublica piece is somehow invalid because…you can’t tax unrealized gains? 1. I don’t understand how the latter follows from the former. 2. Of course you can. Property taxes are just that. 3. Wealth taxes are also just that, though elsewhere in this thread I see Arnold has argued that they aren’t really that. Whether you should tax unrealized gains is a policy debate, but it’s not an outlandish or ignorant position to say you should—though ProPublica doesn’t say that, so I’m still not sure the relevance.
whakim 5y ago
While I disagree that property taxes are unjust, most date back 200+ years to a time when almost all wealth was in the form of land. If a state wanted to tax wealth, they taxed land. (Though this sounds progressive in theory, such taxes were almost universally levied at very low rates. Combined with very low inflation, this meant was it was very easy for the wealthy to accumulate capital by living off the rents of their land.)

makomk 5y ago

The way the US taxes physical property based on its current market value is pretty unusual these days, and I'm not sure it's a good idea. It seems to have all kinds of weird distortive effects on the market like encouraging train companies to rip up serviceable track to reduce their tax, incentivizing manufacturers to keep the bare minimum supply of components and materials in stock, and either causing increases in paper wealth due to a house price boom to mean people can no longer afford to keep a roof over their heads or leading to Proposition 13-like measures to prevent this that have their own negative effects. Everyone ultimately seems to pay the price for all these consequences of the US tax structure.

DennisP 5y ago
I may be wrong but I don't think the US taxes companies on the value of their inventory.