Re: better tax code: no income tax, head tax (&| ppty t)

Lysander wrote:
On Feb 28, 7:04 pm, "Andy F." <never.m...@xxxxxxxxx> wrote:
"RogerDodger" <n...@xxxxxxxxxxxx> wrote in message

That's clearly wrong..A high tax on labor would cause some people to stop
working, thus reducing the number of workers.

This is the same mistake Roy makes. It does not reduce population nor
the numbers of workers. It reduces the amount of workers who wish to
sell their labor at the going wage. This is Roy's main
misunderstanding of supply. You may understand that but I will point
it out anyway.


That's not true (I think). I know several people who have retired
early because the marginal value of continuing to work isn't worth
it. It does not reduce population nor potential supply
of workers, but it will drive the utility of employment below
a threshold for people. Income does not conform well to how people
spend.


When the tax is on the value of the property, there's nothing to gain by
hiding the rental arrangements. The only reason for 'backroom deals' is when
the landlord is trying to avoid income tax.


No the problem is the enforcement mechanism would have to be the state
takes the land if you do not pay the taxes. So people who can not find
buyers and want to sell would let taxes pile up and the STATE would
own the land.

The state has final say over disposition of the land anyway. The
real question is whether an LVT tax or an employment tax is
preferable.

I am much too much of a capitalist and much too cynical
about government to be believe that the government would not wield
unduly influence over the market.

If you are a capitalist, then you probably believe that any subsidy
is wrong. Land rent acts as a subsidy - indeed, it is one.

All the capitalists I have ever known ended up using land rent as a
hedge against enterprises. They all made more money on the land
than the enterprises.

If the tax is set wrong and
regulations are not in check governments could easily end up owning
most of the land. We saw how well governments allocated in the Soviet
Union. This is why I am not a Georgist. You are the last bastion of
socialism, government ownership of assets. Socialism has proved over
and over again to be inefficient.


The counterexample to this is as close as your local tax assessor's
office. An existing model works. It would simply need to be changed to
bear the new roles.

I think the LVT is a fine tax, if set right and regulations on buying,
selling, using land are in check. This is not the 1800's, governments
place deed restrictions and interfere way too much in land use.

I think you just - sort of - hoist yourself on your own petard. People
implement things *like* LVT even though it does not eliminate the
income tax.

Without fewer restrictions we would find state ownership of the land.

We would definitely see all land held in trust. Land use would
fall to those who can make the most money on it. I can't see a
downside to that - it is the most efficient allocation. But the ability to sell the land for rent biases people's decisions away from
efficiency.

Think of it as the people of Shinbone versus the big ranchers north of the Picketwire in "The Man Who Shot Liberty Vallance". This meme
is so common in Westerns as to be inescapable.

Furthermore, I do not believe it is appropriate for a single tax. I
think there is a reason why governments have not used land taxes
beyond the state level and it is not conspiracy of evil land owners.
The tax takes an enormous amount of information to be gathered.

This is done today.

You
can not just say X% of the selling price and say this is low cost. The
truth is market prices rarely matter to country tax assessors when
they asses taxes. One year ago I bought a house and land. The county
rejected the price I paid for the bundle as the tax value they used
their inaccurate measurement to get a higher value. To accurate
measure market prices tons of resources have to be poured into
estimating market value EVERY YEAR.

No, because all sales transactions are recorded formally anyway.

My belief is a federal land tax
would a be bigger administrative burden than the IRS.

I can't imagine that. Look at the sheer bulk of the tax code.

Little raw land
is bought or sold

Raw land isn't the issue - land rent is based on position, not
improvements, and position and improvements are eminently seperable.

and it would take much more sophisticated analysis
than most states use to determine what the selling of the raw land
would be without improvements, especially in areas with little raw
land.

In cases where so little improvement is available as a data base,
no real land rent accrues. It's not interesting. Prices in
Montana have escalated recently, but a New York City parking lot was
worth thousands of acres of Montana, maybe more.

In two different counties I have owned property, the evaluation
of raw land was simply X% of the selling price which is highly
inaccurate.


I disagree - comparables in commercial and residential real
estate are *the* practice. Again, if there are no comparables,
and you are not a professional developer, there's little or no land rent anyway.

I firmly believe that the cost of getting a land tax right would far
exceed the revenues and the benefits of the LVT. This tax would hardly
pay for its own administration.


I suspect that administratively, cost would be at least two orders of
magnitude lower than the *total* cost of the IRS ( including cost of
compliance borne by taxpayers). And the mechanism exists today
- if all the tax assessors everywhere cost four times as much, it
wouldn't be that onerous. I could be off on this - I haven't done anything more than a back-of-envelope thing.

I don't think LVT is practicable because I think land speculation
serves a psychological purpose in the economy that would not be
replaced. I don't think people *want* to be purely judged
on performance. I don't blame them. But that's a rather empty
conjecture.

--
Les Cargill
.

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