out of the box thought on taxes

Oh, and not to mention the proposal is to cut other taxes along with it. Jim's costs not only won't increase they'll actually be reduced when there are drastically reduce income and sales taxes and so on.

 

The market value isn't arbitrarily determined. A rule of thumb is to charge about 0.75% of property value for a property worth 400k (which is exactly where Jim would fall). That would mean the property Jim is renting had a market value of $400k, a market rental value of $3000, and you expect the landowner to rent it for 0.3% of its value.

This is the problem with land value tax supporters. They're not connected with reality. You somehow believe that sales tax or income/corporate tax will be passed on to the consumer, but a land tax won't. You aren't connected with reality. Assess a land value tax, and Jim will be paying $4800/mo, a full 60% more than he was.

As I said, you're not being realistic, and you're sounding like a campaign employee. You're not weighing the facts rationally.

 

Think of it this way. You're a salesman and need to get across a bridge to the city in order to sell your goods. A thug demands money from you in order to use it. You figure that you're willing to pay up $1,000 but if he demands more than that it's not worth it anymore and you'll simply take the longer route. So the thug charges you $1,000. Now let's say it was some kind of a toll taker who is hired by the government to repair the bridge. You still won't be willing to pay any more than $1,000 otherwise you'll just use a different route. The toll taker keeps $200 and the government takes $800. If they tried to charge more than $1,000 the salesman and other salesmen would simply choose the inferior route after considering the cost/benefit ratio. So the toll taker continues to collect $1,000 just like the thug collected $1,000. He just won't get to keep all of it. It's not a 1/1 translation from the land owning scenario since the bridge itself is an improvement (paid for by the government) but it still works. Just like thug and the toll taker the landlord cannot charge more than the tenants are wiling to pay or they'll move somewhere else.

(I just realized I subconsciously borrowed some of Roy's bandit story plot but I don't think he'll mind. )

 

In general, the taxes should be flat (say it's about 20% or so of gross profit) and not change much from year to year. What makes it possible to run things would be being able to know in advance what your tax bill is going to be. Lower is better up to a point, as with zero tax, you have zero infrastructure which isn't good.

 

Taxes on economic rent cannot be passed down. You can deny as much as you want.

 

Universal healthcare.

Seriously.

Take the burden of healthcare and insurance completely away from companies- this is a real cost to companies and makes them less competitive worldwide with First world countries we directly compete with.

 

The question was 'tax', not 'social service.'

 

Wrong. The USA maintains some of the biggest trade barriers in the world. And China's competitive advantage has more to do with its system of public landownership.

 

Again, you're not thinking consistently. You recognize (accurately) that a sales tax adds to costs, but you can't recognize that a land tax would do the same thing. Now, imagine you sell widgets, and they cost you $10 each to make and sell, and so you sell them at $10.70 so that you make a 7% profit. So then the government charges a 60% sales tax, and you going to sell your widget for $10.70? Or are you going to multiply $10.70 by a factor of 1.6, and sell you widgets for $17.12 so that you can still make a profit?

Likewise, if you purchased a property for $400,000 and rent it for $3000 (which would be about standard), and then the government suddenly taxes you $1800/month, are you going to rent it for $3000, 60% of that going to taxes and roughly half of that leftover going to operating taxes (meaning you're earning less from the property than if your assets were liquified and tied to inflation) or are you going to raise the cost of rent by what you are taxed, to $4800?


<<< Mod Edit: Flamebait/Personal Attack >>>

- - - Updated - - -

Suuuuure. And America's gdp/capita is 6x higher because we don't have that.

 

Spot on.

Don't feed the idiots.

 

A land value tax doesn't do the same thing, it can't do the same thing, because the supply of land is fixed.

In your 60% sales tax scenario, the only way for the manufacture of widgets to remain profitable is for fewer widgets to be produced. Thus, when the scarcity of widgets becomes sufficient that consumers become willing to pay the $17.12 final cost, only then will widget making regain profitability. Suppose that at $10.70 the demand for widgets is 3,000 per month, but at $17.12 the demand for widgets is only 1,000 per month. What actually has to happen for widget manufacturing to remain profitable is that manufactures must fire employees and idle their machinery; this must continue until widgets become scarce enough in the market, that consumers become willing to pay the higher cost. In this scenario, the sales tax is passed to consumers, but only after the production of widgets falls by 2/3rds, making them scarce enough in the market to support the higher cost.

This scenario cannot be applied to land value taxation, because land value taxation cannot create scarcity in the supply of land.

Just imagine that if at the very same time that the hypothetical 60% sales tax was levied, that a major discovery in technology allow for widgets to be produced 60% cheaper. In this case, since the cost of the 60% sales tax is offset by the 60% increase in manufacturing efficiency, no newly imposed scarcity would result, and the cost of the sales tax could not (assuming a free market in widget manufacturing) be passed to consumers. This is similar to what happens with a land value tax, but instead of relying on some miracle discovery in technology to prevent increased scarcity, the land value tax cannot create scarcity in the first place, because land is fixed in supply.

 

Sounds good if you say it fast. If you look at a low income person, say, he earns $25k, and your sales tax was 10% and he uses all his money to live on. You could say he is paying 10% tax on income. If some is earning $1M and uses $300k to live. He will be paying 3% on income.
If that's what your after then it might be a fair arguement but it's not a fair as a flat tax.
The bottom line is the country needs money, you have to find away to follow the money.

 

Just a couple points. If the widget factory closes, you have less people buy property or holding on to it driving the price down, do you slim the government or charge higher taxes?
If the manufacturer goes high tech to produce widgets cheaper, he wants to get paid for his investment the price still goes up and people still aren't back to work.
Just saying.

 

Consumption taxes, tariffs, and excise taxes on raw material exports like wood and metal (including scrap metal)/ore that are processed overseas and resold into the US.

 

What would happen to a farmers bottom line if their taxes doubled? How can you say that cost doesn't hurt production? What if taxes were 50 grand per acre in the us to the farmer? Your argument tht taxes aren't a cost is way off. You obviously do not run a business.

Sales tax reduces the value of what money can by locally, that is not the same thing as reducing competitiveness in a global marketplace, except to the extent all taxes hurt the economy. It doesn't do it in a specific way.

 

So Jim's landlord isn't intitled to earn any money on the money he invested in the land.

 

A land value tax cannot exceed the land rent, which is the amount that should be paid anyway, as it is the full market value of the economic advantage the community is providing to the landholder.

Wrong. They just aren't working at obsolete jobs.

Right. As opposed to first thinking.

 

He's objectively wrong, sorry. A land value tax is borne exclusively by the landowner, and cannot be shifted onto anyone else. This is a fact of economics that has been known for 200 years. It is merely a fact that is not known to you, because you do not know any economics.