Re: OT: taxation (was Re: Mountains Rush and Moore)

From: Rand Simberg (newsgroups_at_transterrestrial.com)
Date: 08/21/04 

Date: Sat, 21 Aug 2004 17:23:44 GMT

Alan Anderson wrote:

> Rand Simberg <newsgroups@transterrestrial.com> wrote:
>
>
>>>That's only a problem if your assets aren't producing enough income.
>>
>>If I have a business worth a billion dollars, and I'm getting ten
>>percent profits out of it (in terms of return on assets), but my "asset
>>tax" is twenty percent, what do I do?
>
>
> Propery taxes of twenty percent are absurd (in the logical sense of
> reducto ad absurdum, not the knee-jerk sense of emotional dislike). A
> government which imposed such a tax would quickly deplete its tax base and
> run out of income -- though it would simultaneously end up owning the bulk
> of the assets in the process. If the explicit goal is a transition to
> socialism, I suppose it might make sense, in which case what you do is
> simple: you sell your business to the government in order to pay your
> taxes.
>
>
>>If my largest asset is my home (the case for very many people), are you
>>proposing that I should have to take in renters in order to pay my
>>property tax?
>
>
> No, your regular income ought to be plenty to pay for your property
> taxes. Remember income?

So I'm not allowed to retire, lest I lose my home?

>>Sorry, but it's a very bad idea. Not all assets produce cash with which
>>to pay a wealth tax. It's not fair to make someone sell their family
>>heirlooms in order to pay an annual tax for the privilege of owning them.
>
> Why isn't it fair to make people pay in order to possess valuable items?

Why is it fair? Why should I have to continue to pay for something that
I've already purchased outright?

> And under what set of rules is the value assessed? If property were the
> only basis for taxation, its value would arguably end up being based
> mostly on its potential for generating income.

No, value is based on what people are willing to pay for something.
Your scheme would distort this severely.

>>I'm all in favor of getting rid of income tax, but this would be much worse.
>
>
> There are certainly a lot of implications, but I've debated it with many
> people over many years, and the best arguments I've seen against it are
> predicated on the idea that private property should be able to be kept
> *secret* as well as private. I counter that with the observation that
> markets don't work right unless everyone has good information. I think
> you believe in the power of markets.

I do, but I also believe in privacy. I don't think that it's necessary
for everyone to know my net worth in order for markets to function properly.

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