Real Tax Reform

[r3volution 3.0]

No, anyone who did not wish to sell at any price would have to set a stratospheric value and be taxed at that value, that method of valuation is horrible.

If someone doesn't want to sell at any price, they opt for traditional assessment, instead of self-assessment.

Hence the purpose of that option.

Those are natural hazards, taxes are a man made hazard and should not add additional damage to ordinary misfortune.

Not having enough money to maintain your home, and thus having to sell it, because a sales tax made the electrician et al cost more, is not a natural hazard. It's a man man hazard just as with a property tax that prices someone out of their home. There is no meaningful difference.

I prefer a sales tax/VAT that exempts food, energy, housing and possibly other necessities but has a flat rate on everything else and is combined with a moderate tariff.

How does that differ, in terms of incentives, from a property tax with a, say, $50k deduction?

[Swordsmyth]

If someone doesn't want to sell at any price, they opt for traditional assessment, instead of self-assessment.

Hence the purpose of that option.

So like I said:

So you can chose one bad method of valuation or a different bad method of valuation.
This is one reason why wealth should be taxed when it moves not when it sits still, when it moves the market automatically determines a just valuation.

Not having enough money to maintain your home, and thus having to sell it, because a sales tax made the electrician et al cost more, is not a natural hazard. It's a man man hazard just as with a property tax that prices someone out of their home. There is no meaningful difference.

That MIGHT happen but it requires that you have difficulty with your income at the same time as you have some major maintenance issue, all a property taxes requires to take your property is the difficulty with your income.

How does that differ, in terms of incentives, from a property tax with a, say, $50k deduction?

I'm not entirely sure, but it would encourage wealth production and thrift as opposed to consumption, the different incentives are far less important than the other problems with property tax.

If the valuation problem were magically solved then a single threshold not taxing the first $X would be possible without too badly distorting the wealth production incentive, but it would be a fundamental surrender on the principle of graduation, though it would not be as bad as changing the rate at some threshold.

[r3volution 3.0]

If the valuation problem were magically solved then

I see no valuation problem.

a single threshold not taxing the first $X would be possible without too badly distorting the wealth production incentive, but it would be a fundamental surrender on the principle of graduation, though it would not be as bad as changing the rate at some threshold.

Because different people would have different effective rates?

...as with a sales tax that exempted certain goods?

[Swordsmyth]

I see no valuation problem.

You either are forced to sell your property at a certain value or some arbitrary value is literally pulled out of thin air by someone with a motive to set it too high and who could be influenced to set it even higher to force a sale or too low to help out some crony.

Because different people would have different effective rates?

...as with a sales tax that exempted certain goods?

No, a sales tax is an entirely different animal, your effective rate depends on your spending habits, the government has not declared that it will deliberately change the rules depending on who you are, the rich would also not pay sales tax on their food, energy, housing etc. which would be more expensive for most of them since they would generally buy more and higher priced versions of those things.

[r3volution 3.0]

You either are forced to sell your property at a certain value or some arbitrary value is literally pulled out of thin air by someone with a motive to set it too high and who could be influenced to set it even higher to force a sale or too low to help out some crony.

First, with respect to self-assessment, remember, the "certain value" at which one is forced to sell is whatever one chooses to make it: i.e. whatever price at which one would actually be willing to sell the property, such that one would actually benefit by being "forced" to sell. But what if one can't afford to pay the taxes at that price? Well then one either doesn't pay the tax and loses it to a tax auction, or one assesses it at a lower price, and risks being forced to sell at that lower, undesirable price. That doesn't sound so good, but, as I've explained in previous posts, any kind of tax can create situations like this, where a person is forced to sell something they own, because they can't afford to pay the tax.

Second, as for assessments by the government, your objection that they could be arbitrarily high applies to tax rates themselves, no? Taxes, all taxes, are essentially arbitrary impositions; the state always could raise them. Once again, this isn't a problem unique to property tax.

No, a sales tax is an entirely different animal, your effective rate depends on your spending habits, the government has not declared that it will deliberately change the rules depending on who you are, the rich would also not pay sales tax on their food, energy, housing etc. which would be more expensive for most of them since they would generally buy more and higher priced versions of those things.

With a sales tax, one's effective tax rate would depend on how much one chooses to spend on the taxed items.

Whereas, with a property tax, one's effective tax rate would depend on...

...how much one chooses to spend on the taxed items.

And, in both cases, effective tax rates would tend to correlate with income.

[Swordsmyth]

First, with respect to self-assessment, remember, the "certain value" at which one is forced to sell is whatever one chooses to make it: i.e. whatever price at which one would actually be willing to sell the property, such that one would actually benefit by being "forced" to sell. But what if one can't afford to pay the taxes at that price? Well then one either doesn't pay the tax and loses it to a tax auction, or one assesses it at a lower price, and risks being forced to sell at that lower, undesirable price. That doesn't sound so good, but, as I've explained in previous posts, any kind of tax can create situations like this, where a person is forced to sell something they own, because they can't afford to pay the tax.

The self assessment/forced sale is only defensible if those with no interest in selling have the option of traditional assessment so I will pull the rug out from under it by destroying that.

Second, as for assessments by the government, your objection that they could be arbitrarily high applies to tax rates themselves, no? Taxes, all taxes, are essentially arbitrary impositions; the state always could raise them. Once again, this isn't a problem unique to property tax.

With other kinds of taxes they can't target one individual by misappraising his property, they must raise the tax on everyone, property taxes are abused like that all the time.

With a sales tax, one's effective tax rate would depend on how much one chooses to spend on the taxed items.

Whereas, with a property tax, one's effective tax rate would depend on...

...how much one chooses to spend on the taxed items.

And, in both cases, effective tax rates would tend to correlate with income.

No, with property tax it depends on the assessed value and the trouble with that is the worst problem with them.

[euphemia]

I'm wondering if you read the OP, since I already addressed these issues.

I did read the OP and I am against using property as a way of assessing taxes. It makes only property owners subject to tax. Property ownership is foundational to liberty in this nation, and you can't tax liberty.

[euphemia]

What kind of libertarian wants to make people sell their own property to pay government? That's about as anti-libertarian as it gets. Socialists and communists take away private property, not libertarians.

It doesn't surprise me this topic was posted by someone who thinks the full force of government should be used to bring people of faith into compliance with a godless mentality.

[Zippyjuan]

No, anyone who did not wish to sell at any price would have to set a stratospheric value and be taxed at that value, that method of valuation is horrible.





Those are natural hazards, taxes are a man made hazard and should not add additional damage to ordinary misfortune.






I prefer a sales tax/VAT that exempts food, energy, housing and possibly other necessities but has a flat rate on everything else and is combined with a moderate tariff.
If the rate is still too high you cut spending until it isn't, once you allow graduation the camels nose is in the tent.

At current spending levels you would need a VAT of about 30%- and that is if you INCLUDE foods and necessities. If you only use a tariff, that needs to be at least 200% (which would triple the costs of things) again assuming current spending levels and taxing everything including oil and foods.

Either would have a huge negative impact on the US economy.

[Zippyjuan]

I did read the OP and I am against using property as a way of assessing taxes. It makes only property owners subject to tax. Property ownership is foundational to liberty in this nation, and you can't tax liberty.

Property leasers or renters will still be paying property taxes (they already do- it is included in their rental fee).

[Swordsmyth]

At current spending levels

CUT SPENDING.

you would need a VAT of about 30%- and that is if you INCLUDE foods and necessities. If you only use a tariff, that needs to be at least 200% (which would triple the costs of things)

Use both.

again assuming current spending levels

CUT SPENDING

and taxing everything including oil and foods.

I said to exempt food and energy.

Either would have a huge negative impact on the US economy.

More than the income tax?

No, less because of reduced compliance costs.

[Zippyjuan]

The more things you exempt, the higher the rate has to be to collect the same revenues. And adding taxes like tariffs would make import extremely expensive so they would drop significantly so you need an even higher rate on what imports are left to get the same amount. A VAT makes things a lot more expensive so people can afford less so demand for that also declines so there too you need an even higher rate. That lower demand means producers are selling less and need fewer workers so higher unemployment.

[Swordsmyth]

The more things you exempt, the higher the rate has to be to collect the same revenues. And adding taxes like tariffs would make import extremely expensive so they would drop significantly so you need an even higher rate on what imports are left to get the same amount. A VAT makes things a lot more expensive so people can afford less so demand for that also declines so there too you need an even higher rate. That lower demand means producers are selling less and need fewer workers so higher unemployment.

Those are problems that all taxes have, people with less income buy less and hire fewer employees, the mandatory solution under any system is to cut spending and taxes, that does not change what kind of tax system is better or worse.

[r3volution 3.0]

@Swordsmyth

We're going in circles and we're simply not going to agree on this. What you consider serious problems (property tax screws people in a slightly different way than other taxes screw people) I consider trivia. What I consider a serious advantage (hundreds of billions of waste avoided) you, evidently, consider trivia.

What kind of libertarian wants to make people sell their own property to pay government? That's about as anti-libertarian as it gets. Socialists and communists take away private property, not libertarians.

All taxes involve stealing private property.

All taxes have the potential to force people to sell their property.

It doesn't surprise me this topic was posted by someone who thinks the full force of government should be used to bring people of faith into compliance with a godless mentality.

You appear to have confused me with someone else.

[Identity]

All taxes involve stealing private property.

One can assume that you have an objective moralistic groundwork for such a statement, no? Which presuppositions and flimsy philosophical principles lead you to this conclusion? Without assuming too much- dare I say it's the social contract known as the NAP?