Honest Debate on Land Tax

Quote from Epic:

Well, I tried to promote a debate, but maybe the topic was a bit too unfamiliar and foreign to our American way of thinking about land and tax. I suppose a better idea might have been to debate "fair tax" instead.

I tried. :p
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You did well, now my opinion. I disagree with you. Transaction tax is the best way to go.

With the LVT tax, you will find yourself mired in exceptions, and before long, you will have tax code as thick as the one we have now.
 
Quote from RCG Trader:

You did well, now my opinion. I disagree with you. Transaction tax is the best way to go.

With the LVT tax, you will find yourself mired in exceptions, and before long, you will have tax code as thick as the one we have now.
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Like I said, I like the transaction tax (fair tax) idea. There are just certain BIG problems that would have to be overcome.

My biggest problem with it is the idea I suggested earlier. Our system currently survives off over-consumption. A 30% consumption tax would be a big hit in the short term, and all versions that I've seen place the largest burden on the middle class. We've already got a shrinking middle class, and I believe this will make it worse.
 
Quote from Epic:

Like I said, I like the transaction tax (fair tax) idea. There are just certain BIG problems that would have to be overcome.

My biggest problem with it is the idea I suggested earlier. Our system currently survives off over-consumption. A 30% consumption tax would be a big hit in the short term, and all versions that I've seen place the largest burden on the middle class. We've already got a shrinking middle class, and I believe this will make it worse.
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Not necessarily. A TT would cause those desperate housewives to think twice before they got pissed and ran to the mall.
 
I have one question that people can answer here.

What are the characteristics of the ideal tax? Or what is the purpose of a tax in the first place?
 
Quote from Epic:

I have one question that people can answer here.

What are the characteristics of the ideal tax? Or what is the purpose of a tax in the first place?
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I assume this is rhetorical. One purpose of a tax is to pay for the goods and services that a government is providing. The ideal tax would be thought of as fair and legitimate by the buyer of those goods and services.
 
Quote from Epic:

I have one question that people can answer here.

What are the characteristics of the ideal tax? Or what is the purpose of a tax in the first place?
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Taxes are for infrastructure that our society lives on. Think of it as dues.
 
Quote from RCG Trader:

Not necessarily. A TT would cause those desperate housewives to think twice before they got pissed and ran to the mall.
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Think about this though. It became evident very quickly how much our economy hinges on construction. Take a second and conjure up a theory of what will happen if the cost of constructing any property is suddenly 30% higher? Let's get into the nitty gritty a bit.

There is a big debate in the fair tax community about taxing all forms of property sales, or just new construction. Most say that in order to protect first time buyers who tend to buy pre-existing homes, we should not tax them, only new construction. Others recognize that this causes huge disruptions in the market and say that it won't work that way.

The most recent proposal would be something like exempting $150K of all primary residence. Then cutting the tax in 1/2 on the remaining value so that it doesn't completely destroy the housing market.

The reason the fair tax says 23% tax is that if you buy an item for $1.00 and apply a 30% sales tax, the total price is $1.30. If you then calculate the amount of the tax proportionate to the total price, the tax portion is 23% of the total. IMO, that is very misleading to Joe American, because there is not a single place in America that I'm aware of with a sales tax presented like this. When you go to the store, your total purchase receipt is presented and the tax (usually around 3-8%) is added to the bill. If that is how the "fair tax" was presented it is actually a 30% tax to be revenue neutral, and that is assuming that they can effectively regulate against a huge black market that evades taxes.
 
Quote from RCG Trader:

Taxes are for infrastructure that our society lives on. Think of it as dues.
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Ok, so if tax is specifically paying for infrastructure and not being used as a tool to redistribute wealth, then the best tax would exact from every person according to their benefit (or use) of that infrastructure.

Obviously, the infrastructure is not all tangible. There are roads, bridges, sewer systems, etc. but there is also police, national defense, fire protection, etc.

I would suggest that the best tax would then properly align incentives of the tax payers. IOW, they pay for exactly the amount that they use, and as much as is possible the tax avoids incentives against actions that would benefit economic growth. Agreed?
 
Quote from Epic:

Ok, so if tax is specifically paying for infrastructure and not being used as a tool to redistribute wealth, then the best tax would exact from every person according to their benefit (or use) of that infrastructure.

Obviously, the infrastructure is not all tangible. There are roads, bridges, sewer systems, etc. but there is also police, national defense, fire protection, etc.

I would suggest that the best tax would then properly align incentives of the tax payers. IOW, they pay for exactly the amount that they use, and as much as is possible the tax avoids incentives against actions that would benefit economic growth. Agreed?
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Those are ideals, but we must remember that eventually the ROI on increasing efficacy turns negative.
 
Quote from Ricter:

Those are ideals, but we must remember that eventually the ROI on increasing efficacy turns negative.
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True. So should one of those two factors be considered more important than the other?
 
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