Re: Relative poverty, a problem?

royls@xxxxxxxxx wrote:

I remember quite well your opposition to tax the income of the Wall Street
traders because it is a tax on income.

That's right. You need to get straight that there is a difference
between earned income and economic rent, and it is not a matter of
size.

If you believe the gambling on Wall Street it is earned income, your
"understanding" of economics it is rather strange :-)


And we have already shown you that farming would
bear a SMALLER tax burden under LVT.

No, actually you failed to show me exactly that point.

No, I proved it. You just didn't understand the proof because you
don't know any economics. LVT would reduce the tax burden on farming
because it would end the taxation of the farmer's inputs and
production, and would only recover what the farmer would otherwise be
paying to the landowner for doing nothing.

OK, royls. Enough with this irrational claims.
You want to prove something: PUT UP THE NUMBERS on a model. Here is just a
ultra simplified model to help you see the problem.

Company A: Manufacturing. Produce 100M/yr. Taxes on income,dividends,wages
etc. from this company is 33M/yr. Use 1 acre of land in city.

Company B: Farm. Produce 10M/yr in food it sell to workers for A. Tax on
income is 3M/yr. Use 100 acre of land in countryside. The farmer is left
with 7M.

Drop LVT and impose land tax, asking A to pay 33M/yr*acre in city and B to
pay 30k/yr*acre in countrysize.

A, decide to move his plant in countrysize to pay 30k/acre too.
Now, you got revenue of 3M+30k=3.03M/yr instead of 36M/yr

To compensate for this drop in revenue, you rise the rate in countryside to
get 36M out of 101 acres. That means you charge 356k/countryside acre.
The farm now pays: 35.6M/yr while the manufacturer pays less than 400k/yr

If the farmer wants to keep his 7M earnings, he have now to charge for the
same quantity of food 35.6+7=42.6M instead of 10M. That means the price of
food skyrocketed 4.26 times because of LVT. And, the workers have now
instead of a 20 min. comute an 3hour comute. The price of gas rise a lot
due to over demand and this hurt the farmer even further who have to rise
the food prices even more to compensate.

The only way to prevent this to happen is to accept the government to lose
revenue from 36M/yr to 3.03M/yr. That means dropping all the military, all
the social programs, all the education, all the ... everything else. We are
talking here about a lost of: 91.58% of the tax revenue.

Alternatively, you can put the gun on the A head not to move in countryside.
Well, he is going to offshore the production, fire all the workers and you
get 0 instead of 33M while all the factory workers are out of job.

Well, if this is your solution to the economic problems, I find it to be
quite unsatisfactory :-)

I even gave you a
numeric example to show you that removing income taxation and replace them
with LVT will generate skyrocketing food prices.

Uh, no, if you will recall, I proved that example was utter nonsense,
and demolished it.

You never come with a numeric model. You only claimed PR that: This is not
real, this is not gona happen, this can not be that way and so on.

Put up the numbers if you want to prove something.
Empty rethoric won't do it.

You replied with (mostly)
PR but never with a clear numeric example to show that it can be done.

Garbage. It has been known for nearly 200 years, and is not seriously
disputed by any competent economist, that a tax on land rent cannot,
repeat, CANNOT be passed on to consumers in the form of higher prices.
It is just not konwn by you, because you do not know any economics.

Put up the numbers into a model.

If however, the LVT is used as a nonexclusive taxation used to reduce
income taxes for low income families, but not to replace all the income
taxation, well that it is an idea I can agree with.

Why do you insist that moderate and high incomes be taxed? Why should
the most productive be punished for producing more than others?

The idle CEO getting 400M/yr is less productive than anybody of his workers.
The productive it is the guy that can do something. Not the guy that take
what is produce by others and claim it is mine. And the idle shareholders
are even worst than the CEOs.


If you eliminate all the taxation
and replace them with LVT, then if the company drop the Manhattan plant
and move it in China will pay NO LVT.

Well, if they are not operating (using land) in the USA, why would you
imagine that they should pay taxes to the US government?

Because they sell stuff here. There is not a right to do business into a
particular area. That is a privilege. You want it, pay taxes for it.

In any case,
the burden of LVT is borne exclusively by the land's owner at the time
the LVT is implemented. If the company owns land in the USA, then
decides to move to China "to avoid the LVT," it will simply pay all
the LVT _in_advance_ when it sells the land and moves to China.

They won't pay. They just gave it to the government to stay idle.

In ancient times (when Georgist ideology might been working) that was not an
issue because the land could been given to others to produce out of it
because the economy has been mainly agriculture.

In modern times however, this changed fundamentally. If a microprocessor
company abandon an acre and move production offshore, you will NOT start
producing microprocessors there just by having that piece of land. You need
to invest in all the assets and knowhow from the scratch. Contrary to
Georgist beliefs, you just can not plant a piece of sillicon then harvest
microprocessors of the land.

Well, if you replace the land tax with a ASSET tax, the things may change.


But LVT will not help in that
case either.

I have already explained why it will. Haliburton and all other
companies will be unable to avoid paying the LVT on all US land they
own when it is implemented.

But they do not need to own ANY land in US. They can just import stuff from
countries without LVT and sell it in US without owning a square milimeter
of land. But by importing cheap things they do put out of work all the
domestic workers.

It seems to me that you guys want to use the LVT as the last nail into the
coffin of US economy.

Only VAT can tax offshore companies selling goods and services
in US and due to offshoring issue, I see VAT as a requirement.

Why would you imagine the USA should tax offshore companies selling to
the USA, except to the extent that those companies benefit by using US
resources?

To buy the privilege to sell into the US. Period.

VAT is one of the worst taxes ever devised, as it
specifically punishes creation of value.

Senseless PR. Why not put up the numbers ?

.

Relevant Pages

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    ... The tax land value is not a bad idea. ... fundamentalism of the Georgists supporters that regard this as a panacea. ... by LVT opponents. ...
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