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Can you please tell the supposedly low tax state of Texas that these wealth taxes are a bad idea? I've got to pay mine to them in a few days.

AnthonyMouse 5y ago
Texas has a wealth tax? When did this happen?
- dragonwriter 5y ago
  > Texas has a wealth tax? Every US jurisdiction has at least one; it's called “property tax”, a wealth tax that has very broad exceptions (i.e., everything except real estate.) Texas has the 6th highest of the 50 states + DC.
  - AnthonyMouse 5y ago
    Taxing land is kind of different because the owner didn't create it and it's not possible for anyone to cause more to exist. See discussion of Georgism etc. Taxing buildings is a bad idea for the same kinds of reasons as a wealth tax is a bad idea, but an actual wealth tax doesn't have exceptions. Or if it does, that makes it even worse, because whatever the exceptions are will create a powerful arbitrage opportunity. Which, in the case of property tax, is one of the reasons we under-invest in housing construction and have high housing costs. (Restrictive zoning is an even larger factor, but might not be if property tax mill rates were higher.)
    - dragonwriter 5y ago
      > Taxing land is kind of different because the owner didn't create it and it's not possible for anyone to cause more to exist. Neither one of those things is categorically true of land (artificial land is a thing.) > Taxing buildings is a bad idea for the same kinds of reasons as a wealth tax is a bad idea. Whether or not it's a bad idea, it in fact exists, which was the question. > but an actual wealth tax doesn't have exceptions That's an unusual definition and doesn't seem like it matches any actual proposals that have been discussed with that name. > Or if it does, that makes it even worse, because whatever the exceptions are will create a powerful arbitrage opportunity. Why is this unconditionally a bad thing? > Which, in the case of property tax, is one of the reasons we under-invest in housing construction and have high housing costs. It’s really not, if it was, that problem would be inversely correlated with property tax rates, since those would determine the strength of that incentive.
      - AnthonyMouse 5y ago
        > Neither one of those things is categorically true of land (artificial land is a thing.) "Land" is the surface of the planet. You can make "artificial land" in the sense that you e.g. cover the ocean with something that passes for ground, but that's just a type of building. It doesn't change the size of the earth. The ocean has land under it that was there before you showed up. > Whether or not it's a bad idea, it in fact exists, which was the question. There is obviously a meaningful difference between a "property tax" and a "wealth tax" or else people would not be talking about instituting a wealth tax instead of just adjusting the rate (if desired) on the existing "wealth tax." > Why is this unconditionally a bad thing? Suppose you have a wealth tax that applies to everything except precious metals. Stock market immediately crashes to the level that risk adjusted returns match those of holding metals while not paying the wealth tax, and metal prices skyrocket. Insert whatever you like as the exception, same thing happens. How is that not unconditionally a bad thing? And you get something similar even if there are no formal exceptions, because there will be types of property which are harder to measure and wealth will pour into them with high inefficiency in order to avoid the tax. > It’s really not, if it was, that problem would be inversely correlated with property tax rates, since those would determine the strength of that incentive. Measuring this is confounded by several other strong forces, zoning being the main one, but also just differences between housing markets in different areas. So it's hard to measure above background noise with low absolute differences in property tax rates. But what makes you think this doesn't happen? If rents are $2000/month and you can build a new unit of housing for a risk-adjusted net present cost equivalent to $1999/month, it's profitable to do so. If the new unit will have $100/month worth of property tax due, now the rent has to be $2100/month before it's profitable to do so, and less housing is constructed causing rents to remain higher. What would cause this not to be true?
AnimalMuppet 5y ago
I'm pretty sure you're trying to relabel property tax as a "wealth tax". Which it is in fact a tax on a subset of wealth. But it's not what all the rest of us are referring to when we say "wealth tax" in this thread. Your post therefore looks like a deliberate attempt at distraction. To the best of my knowledge, Texas does not have a wealth tax in the sense that is under discussion.
- hotpotamus 5y ago
  I would say it's less a deliberate attempt at distraction and more of an impotent expression of annoyance at the discussion.
imtringued 5y ago
Yeah and it would be much better if land value was taxed instead because that is effectively equivalent to paying for the share of society that you own, instead of taxing the wealth you created. Right now the tax system is basically designed to make humans do as little work as possible. I don't mean that in a positive light. Employers don't want to hire people, they would rather hire machines because they are taxed less. Homeowners don't want to improve their home because they fear higher property taxes.

AnthonyMouse 5y ago

Texas has a wealth tax? When did this happen?

dragonwriter 5y ago
> Texas has a wealth tax? Every US jurisdiction has at least one; it's called “property tax”, a wealth tax that has very broad exceptions (i.e., everything except real estate.) Texas has the 6th highest of the 50 states + DC.
- AnthonyMouse 5y ago
  Taxing land is kind of different because the owner didn't create it and it's not possible for anyone to cause more to exist. See discussion of Georgism etc. Taxing buildings is a bad idea for the same kinds of reasons as a wealth tax is a bad idea, but an actual wealth tax doesn't have exceptions. Or if it does, that makes it even worse, because whatever the exceptions are will create a powerful arbitrage opportunity. Which, in the case of property tax, is one of the reasons we under-invest in housing construction and have high housing costs. (Restrictive zoning is an even larger factor, but might not be if property tax mill rates were higher.)
  - dragonwriter 5y ago
    > Taxing land is kind of different because the owner didn't create it and it's not possible for anyone to cause more to exist. Neither one of those things is categorically true of land (artificial land is a thing.) > Taxing buildings is a bad idea for the same kinds of reasons as a wealth tax is a bad idea. Whether or not it's a bad idea, it in fact exists, which was the question. > but an actual wealth tax doesn't have exceptions That's an unusual definition and doesn't seem like it matches any actual proposals that have been discussed with that name. > Or if it does, that makes it even worse, because whatever the exceptions are will create a powerful arbitrage opportunity. Why is this unconditionally a bad thing? > Which, in the case of property tax, is one of the reasons we under-invest in housing construction and have high housing costs. It’s really not, if it was, that problem would be inversely correlated with property tax rates, since those would determine the strength of that incentive.
    - AnthonyMouse 5y ago
      > Neither one of those things is categorically true of land (artificial land is a thing.) "Land" is the surface of the planet. You can make "artificial land" in the sense that you e.g. cover the ocean with something that passes for ground, but that's just a type of building. It doesn't change the size of the earth. The ocean has land under it that was there before you showed up. > Whether or not it's a bad idea, it in fact exists, which was the question. There is obviously a meaningful difference between a "property tax" and a "wealth tax" or else people would not be talking about instituting a wealth tax instead of just adjusting the rate (if desired) on the existing "wealth tax." > Why is this unconditionally a bad thing? Suppose you have a wealth tax that applies to everything except precious metals. Stock market immediately crashes to the level that risk adjusted returns match those of holding metals while not paying the wealth tax, and metal prices skyrocket. Insert whatever you like as the exception, same thing happens. How is that not unconditionally a bad thing? And you get something similar even if there are no formal exceptions, because there will be types of property which are harder to measure and wealth will pour into them with high inefficiency in order to avoid the tax. > It’s really not, if it was, that problem would be inversely correlated with property tax rates, since those would determine the strength of that incentive. Measuring this is confounded by several other strong forces, zoning being the main one, but also just differences between housing markets in different areas. So it's hard to measure above background noise with low absolute differences in property tax rates. But what makes you think this doesn't happen? If rents are $2000/month and you can build a new unit of housing for a risk-adjusted net present cost equivalent to $1999/month, it's profitable to do so. If the new unit will have $100/month worth of property tax due, now the rent has to be $2100/month before it's profitable to do so, and less housing is constructed causing rents to remain higher. What would cause this not to be true?

AnimalMuppet 5y ago

I'm pretty sure you're trying to relabel property tax as a "wealth tax". Which it is in fact a tax on a subset of wealth. But it's not what all the rest of us are referring to when we say "wealth tax" in this thread. Your post therefore looks like a deliberate attempt at distraction. To the best of my knowledge, Texas does not have a wealth tax in the sense that is under discussion.

hotpotamus 5y ago
I would say it's less a deliberate attempt at distraction and more of an impotent expression of annoyance at the discussion.

imtringued 5y ago

Yeah and it would be much better if land value was taxed instead because that is effectively equivalent to paying for the share of society that you own, instead of taxing the wealth you created. Right now the tax system is basically designed to make humans do as little work as possible. I don't mean that in a positive light. Employers don't want to hire people, they would rather hire machines because they are taxed less. Homeowners don't want to improve their home because they fear higher property taxes.