4 ms·

I think one reason governments use a variety of taxes is that otherwise there is a single point of attack for people who want to game the system, and all that e

by pg 17y ago

I think one reason governments use a variety of taxes is that otherwise there is a single point of attack for people who want to game the system, and all that energy focused on one point could produce weird distortions. In this case there would be a great incentive for people to live less densely, which seems a bad thing. Someone who went off and lived in the sticks where land was practically worthless could reduce their tax bill to next to nothing. Especially if they lived in a mobile home (deluxe versions of which would rapidly appear).

Locke1689 17y ago
Also, at the moment we only tax "land" -- meaning actual physical land, not space inhabited. Therefore, the truly rich could afford to construct difficult vertically engineered buildings, thus reducing their tax burden while simultaneously keeping a superhigh lifestyle. Meanwhile, many middle class who are wealthy enough to afford a home but not wealthy enough to afford a towering monstrosity would be taxed at a higher rate. I am loath to use the term "wealth redistribution" because it tends to bring around the less thoughtful, but louder, segment of the population which rails against anything that remotely sounds like socialism. However, consider that this is one of the reasons for the progressive income tax. Essentially, money means less to you the more you have of it, especially considering that sustainable goods for comfortable life actually cost very little (thus meaning that taking ten percent of someone earning $35,000 dollars a year is far more likely to cut into their cost of living than taking ten percent of someone earning $500,000 dollars a year). One tax certainly introduces problems of point vulnerability, but it also brings up a problem with different taxes on different income brackets.
- jerf 17y ago
  "Therefore, the truly rich could afford to construct difficult vertically engineered buildings, thus reducing their tax burden while simultaneously keeping a superhigh lifestyle." If the tax rate is so high that this is a worthwhile use of a rich person's money, we've already lost.
  - Locke1689 17y ago
    Well, how high should we make it then? Remember, this is supposed to replace all other US federal tax, including income tax (I presume, maybe I misinterpreted the article).
    - jerf 17y ago
      In order to really answer your question, we'd need to attach some numbers to the problem, since it's all a matter of which is cheaper. However, every time I try, I find the concept of "unimproved value of the land" coming apart in my hands. There's really no way to separate the value of the item on the land from what is on the land. Oh, we do talk about lot values, but that's ultimately an abstraction that once it actually started to matter would be subject to gaming and interpretation. It isn't really meaningful to talk about the economic value of something that doesn't exist. You can only determine the value of something by seeing what people will actually give up to obtain the item. When you ask about something that doesn't exist, you are asking people to estimate what they might be willing to give up if the thing actually existed, and people are notoriously bad at that. (Note that the failure is ultimately human, not economic; a being that was more rational about being able to hypothesize what they would give up might not have this problem, but we have to go to government with the beings we have, not the beings we wish we had. This metric would start game-able and get worse.) So I guess my answer is I can't seem to wrap my head around what's actually being proposed enough to elaborate on what my point was meaningfully. Consider this a strike against this summary of the proposal. (Whether it applies to the original I don't know, and I don't care enough to go check.) (... actually, if you want to get really meta, the problem is that even if you waved a magic wand and had this implemented, Congress would still have it mangled inside two years flat. Congress is the real problem here, or government, or special interests, etc. The tax system is more effect than cause.)
      - maxwell 17y ago
        "Congress is the real problem here, or government, or special interests, etc. The tax system is more effect than cause." We just need the Constitution, U.S. Code, and state laws on a DVCS. It wouldn't need to even be official; representatives would just essentially make the formal commit of publicly popular diffs, or lose reelection.
- bwhite 17y ago
  This isn't right. Property tax is almost always in proportion to the area of living space on the property. Even anti-redistributionists acknowledge that taking 10% of the income of someone making $5e5 will reduce that person's lifestyle less than taking 10% of someone making $35k. I think the issue is more that this isn't the case -- the 500,001st dollar is taxed at a much higher rate than the 35,001st dollar.
  - Locke1689 17y ago
    I think it depends on the state -- certain states separate the taxes into Land Value Tax (LVT) and then actual "property" taxes, which is IIRC the improvement value of the building on the property. Both of these combined would be a real estate tax. I had assumed that they were taxing LVT, but the article is a little poor on details. I think the issue is more that this isn't the case -- the 500,001st dollar is taxed at a much higher rate than the 35,001st dollar. I can't quite tell if you are agreeing or disagreeing here. I was saying that the property tax is unfair in this case. There are many ways in which someone who has a high income could be taxed lower than someone with a lower income (which is what the progressive income tax is supposed to correct).
    - bwhite 17y ago
      It is certainly possible for someone with a higher income to be taxed at an overall rate that's less than the overall rate of someone with a lower income. It is true that this subverts the plain-meaning intention of the tax system (though I am skeptical that at least some of those "loopholes" aren't unintended at all) but it's not obviously unfair.
ivankirigin 17y ago
I think you have it exactly backwards. The more points of attack, the larger the vulnerability. There are laws passed for specific corporations to reduce tax liability. What's wrong with low density? There is a real economic value to variety and a minimum density to support certain kinds of commerce. You can't take this to a limit assuming there is no cost (if only opportunity cost) to moving to a less dense area. Also, at least in the easy coast, the least dense areas are typically already state or national parks. Wyoming is the exact opposite. 5 digit license plates are common there.
- staunch 17y ago
  A variety of different taxes "catches" everyone at some point. You can dodge some, but you can't dodge them all. Even the super rich hiding their money offshore pay sales tax on their Bentley, car registration, property taxes on their house, etc.
  - johnnybgoode 17y ago
    You're worried about someone dodging a land value tax?
    - pg 17y ago
      You're assuming it would be possible to establish an un-dodgeable tax?
      - johnnybgoode 17y ago
        Not at all. I'm saying if your reason for favoring multiple taxes is to ensure no one dodges all of them, you're barking up the wrong tree. First, this is a dubious goal -- why should the primary objective be to "catch" everybody? Second, if we go by a measure like "percentage of expected tax revenues dodged," a single land value tax would be far preferable to today's messy tax system. (Consider the number of loopholes exploited today and the danger of avoiding a strict land value tax.)
      - 17y ago
anamax 17y ago
> I think one reasons governments use a variety of taxes is that otherwise there is a single point of attack for people who want to game the system, and all that energy focused on one point could produce weird distortions. Nope. They use a variety of taxes because that increases the ways that people are interested in the tax system, which increases their power. Every different tax is an opportunity to reward/punish and "you want to give me money to make sure your interests are represented." And, the variety of taxes actually makes the system more vulnerable to gaming. Complexity is how/why tax lawyers make big bucks.
johnnybgoode 17y ago
As others have already mentioned, it's easier to game the system when there are many different taxes. The distortions are already weird. > Someone who went off and lived in the sticks where land was practically worthless could reduce their tax bill to next to nothing. Depending on the method used to assess the value of land, the market would adjust for this. There are still other great incentives for people to live in cities, of course.
grandalf 17y ago
Do you think tax laws are effectively enforced today? The main argument for simplifying the tax code (in any way) is that it will limit the effectiveness of games and loopholes. Are you arguing that the complexity of the tax code makes it more impervious to cheating?
- pg 17y ago
  I'm arguing what I wrote, which is that if there were a single big tax rather than a lot of small ones, people's efforts to avoid it would tend to produce more dramatic distortions in how we live. I wasn't saying anything one way or the other about the effectiveness of such a tax as a way of collecting revenue, or how effective current taxes are at that. Sigh. I wonder if forums train one to write verbosely. When I say exactly what I mean, and no more, I always seem to end up having to produce the macroexpansion of it in the grandchild. I wonder if one eventually starts to anticipate this.
  - johnnybgoode 17y ago
    You wrote that weird distortions were a possibility, and I agree, but do you also think they'd be more dramatic than the ones which exist today? We have some big taxes on productive activity and a lot of small taxes to go along with them. All of these already produce distortions in how we live.
  - jasonkester 17y ago
    Indeed. It would be nice if you could mark a post as "don't extrapolate on what I've written." Just a little social cue to potentail respondents that they should check their rebuttal to ensure that the point they're refuting is actually contained in the text of the original. Like this: But if they did actually clone genetically engineered dinosaurs from mosquito DNA, I'd prefer they did it on an island well off the mainland to ensure that they couldn't escape and endanger the population at large. /noextrapolate
    - lsb 17y ago
      Who's the "they" now, the cloners or the cloned?
miked 17y ago
>> Someone who went off and lived in the sticks where land was practically worthless could reduce their tax bill to next to nothing. It would be much smaller, of course, but the cost and accident risks of commuting and loss of high-density conveniences would be a strong countervailing force for most. The real trick of a tax system is to punish productivity as little as possible while charging fees for resource usage. Toll roads, gasoline taxes, park entrance fees are "good" taxes. Part of the problem with Henry George's scheme is that it doesn't take those into account.
joss82 17y ago
Am I the only one to think that such a tax would, on the opposite, increase population density around attractive centers ? As acquiring expensive, more attractive, inner city land would be a recurring burden for land owners, they would try to make enough profit out of it to offset the tax. The best way to do that would be to build tall buildings that have high population density. Am I wrong ?

by pg 17y ago

Locke1689 17y ago

Also, at the moment we only tax "land" -- meaning actual physical land, not space inhabited. Therefore, the truly rich could afford to construct difficult vertically engineered buildings, thus reducing their tax burden while simultaneously keeping a superhigh lifestyle. Meanwhile, many middle class who are wealthy enough to afford a home but not wealthy enough to afford a towering monstrosity would be taxed at a higher rate. I am loath to use the term "wealth redistribution" because it tends to bring around the less thoughtful, but louder, segment of the population which rails against anything that remotely sounds like socialism. However, consider that this is one of the reasons for the progressive income tax. Essentially, money means less to you the more you have of it, especially considering that sustainable goods for comfortable life actually cost very little (thus meaning that taking ten percent of someone earning $35,000 dollars a year is far more likely to cut into their cost of living than taking ten percent of someone earning $500,000 dollars a year). One tax certainly introduces problems of point vulnerability, but it also brings up a problem with different taxes on different income brackets.

jerf 17y ago
"Therefore, the truly rich could afford to construct difficult vertically engineered buildings, thus reducing their tax burden while simultaneously keeping a superhigh lifestyle." If the tax rate is so high that this is a worthwhile use of a rich person's money, we've already lost.
- Locke1689 17y ago
  Well, how high should we make it then? Remember, this is supposed to replace all other US federal tax, including income tax (I presume, maybe I misinterpreted the article).
  - jerf 17y ago
    In order to really answer your question, we'd need to attach some numbers to the problem, since it's all a matter of which is cheaper. However, every time I try, I find the concept of "unimproved value of the land" coming apart in my hands. There's really no way to separate the value of the item on the land from what is on the land. Oh, we do talk about lot values, but that's ultimately an abstraction that once it actually started to matter would be subject to gaming and interpretation. It isn't really meaningful to talk about the economic value of something that doesn't exist. You can only determine the value of something by seeing what people will actually give up to obtain the item. When you ask about something that doesn't exist, you are asking people to estimate what they might be willing to give up if the thing actually existed, and people are notoriously bad at that. (Note that the failure is ultimately human, not economic; a being that was more rational about being able to hypothesize what they would give up might not have this problem, but we have to go to government with the beings we have, not the beings we wish we had. This metric would start game-able and get worse.) So I guess my answer is I can't seem to wrap my head around what's actually being proposed enough to elaborate on what my point was meaningfully. Consider this a strike against this summary of the proposal. (Whether it applies to the original I don't know, and I don't care enough to go check.) (... actually, if you want to get really meta, the problem is that even if you waved a magic wand and had this implemented, Congress would still have it mangled inside two years flat. Congress is the real problem here, or government, or special interests, etc. The tax system is more effect than cause.)
    - maxwell 17y ago
      "Congress is the real problem here, or government, or special interests, etc. The tax system is more effect than cause." We just need the Constitution, U.S. Code, and state laws on a DVCS. It wouldn't need to even be official; representatives would just essentially make the formal commit of publicly popular diffs, or lose reelection.
bwhite 17y ago
This isn't right. Property tax is almost always in proportion to the area of living space on the property. Even anti-redistributionists acknowledge that taking 10% of the income of someone making $5e5 will reduce that person's lifestyle less than taking 10% of someone making $35k. I think the issue is more that this isn't the case -- the 500,001st dollar is taxed at a much higher rate than the 35,001st dollar.
- Locke1689 17y ago
  I think it depends on the state -- certain states separate the taxes into Land Value Tax (LVT) and then actual "property" taxes, which is IIRC the improvement value of the building on the property. Both of these combined would be a real estate tax. I had assumed that they were taxing LVT, but the article is a little poor on details. I think the issue is more that this isn't the case -- the 500,001st dollar is taxed at a much higher rate than the 35,001st dollar. I can't quite tell if you are agreeing or disagreeing here. I was saying that the property tax is unfair in this case. There are many ways in which someone who has a high income could be taxed lower than someone with a lower income (which is what the progressive income tax is supposed to correct).
  - bwhite 17y ago
    It is certainly possible for someone with a higher income to be taxed at an overall rate that's less than the overall rate of someone with a lower income. It is true that this subverts the plain-meaning intention of the tax system (though I am skeptical that at least some of those "loopholes" aren't unintended at all) but it's not obviously unfair.

ivankirigin 17y ago

I think you have it exactly backwards. The more points of attack, the larger the vulnerability. There are laws passed for specific corporations to reduce tax liability. What's wrong with low density? There is a real economic value to variety and a minimum density to support certain kinds of commerce. You can't take this to a limit assuming there is no cost (if only opportunity cost) to moving to a less dense area. Also, at least in the easy coast, the least dense areas are typically already state or national parks. Wyoming is the exact opposite. 5 digit license plates are common there.

staunch 17y ago
A variety of different taxes "catches" everyone at some point. You can dodge some, but you can't dodge them all. Even the super rich hiding their money offshore pay sales tax on their Bentley, car registration, property taxes on their house, etc.
- johnnybgoode 17y ago
  You're worried about someone dodging a land value tax?
  - pg 17y ago
    You're assuming it would be possible to establish an un-dodgeable tax?
    - johnnybgoode 17y ago
      Not at all. I'm saying if your reason for favoring multiple taxes is to ensure no one dodges all of them, you're barking up the wrong tree. First, this is a dubious goal -- why should the primary objective be to "catch" everybody? Second, if we go by a measure like "percentage of expected tax revenues dodged," a single land value tax would be far preferable to today's messy tax system. (Consider the number of loopholes exploited today and the danger of avoiding a strict land value tax.)
    - 17y ago

anamax 17y ago

> I think one reasons governments use a variety of taxes is that otherwise there is a single point of attack for people who want to game the system, and all that energy focused on one point could produce weird distortions. Nope. They use a variety of taxes because that increases the ways that people are interested in the tax system, which increases their power. Every different tax is an opportunity to reward/punish and "you want to give me money to make sure your interests are represented." And, the variety of taxes actually makes the system more vulnerable to gaming. Complexity is how/why tax lawyers make big bucks.

johnnybgoode 17y ago

As others have already mentioned, it's easier to game the system when there are many different taxes. The distortions are already weird. > Someone who went off and lived in the sticks where land was practically worthless could reduce their tax bill to next to nothing. Depending on the method used to assess the value of land, the market would adjust for this. There are still other great incentives for people to live in cities, of course.

grandalf 17y ago

Do you think tax laws are effectively enforced today? The main argument for simplifying the tax code (in any way) is that it will limit the effectiveness of games and loopholes. Are you arguing that the complexity of the tax code makes it more impervious to cheating?

pg 17y ago
I'm arguing what I wrote, which is that if there were a single big tax rather than a lot of small ones, people's efforts to avoid it would tend to produce more dramatic distortions in how we live. I wasn't saying anything one way or the other about the effectiveness of such a tax as a way of collecting revenue, or how effective current taxes are at that. Sigh. I wonder if forums train one to write verbosely. When I say exactly what I mean, and no more, I always seem to end up having to produce the macroexpansion of it in the grandchild. I wonder if one eventually starts to anticipate this.
- johnnybgoode 17y ago
  You wrote that weird distortions were a possibility, and I agree, but do you also think they'd be more dramatic than the ones which exist today? We have some big taxes on productive activity and a lot of small taxes to go along with them. All of these already produce distortions in how we live.
- jasonkester 17y ago
  Indeed. It would be nice if you could mark a post as "don't extrapolate on what I've written." Just a little social cue to potentail respondents that they should check their rebuttal to ensure that the point they're refuting is actually contained in the text of the original. Like this: But if they did actually clone genetically engineered dinosaurs from mosquito DNA, I'd prefer they did it on an island well off the mainland to ensure that they couldn't escape and endanger the population at large. /noextrapolate
  - lsb 17y ago
    Who's the "they" now, the cloners or the cloned?

miked 17y ago

>> Someone who went off and lived in the sticks where land was practically worthless could reduce their tax bill to next to nothing. It would be much smaller, of course, but the cost and accident risks of commuting and loss of high-density conveniences would be a strong countervailing force for most. The real trick of a tax system is to punish productivity as little as possible while charging fees for resource usage. Toll roads, gasoline taxes, park entrance fees are "good" taxes. Part of the problem with Henry George's scheme is that it doesn't take those into account.

joss82 17y ago

Am I the only one to think that such a tax would, on the opposite, increase population density around attractive centers ? As acquiring expensive, more attractive, inner city land would be a recurring burden for land owners, they would try to make enough profit out of it to offset the tax. The best way to do that would be to build tall buildings that have high population density. Am I wrong ?