Taxation is always harmful, period. But assume hypothetically for a moment that some form of taxation must exist. Which form of taxation would be least harmful?
Obviously, low taxes. But which taxes specifically?
Taxation is a burden, but it should be a burden borne equally if it is to exist. Income taxes burden the poor more than the rich, capital gains taxes burden the rich more than the poor, etc. What taxes would burden everyone equally, and therefore be the most impolitic?
I already say no to the fair tax. To me, it seems...well...unfair. I also feel that a universal sales tax will harm the poor and middle classes more than everyone else.
I came across something called the universal exchange tax, which seems like a better idea to me in that it is more equal in its distribution of the burden. But at the same time, I am skeptical of it, and critics have said it seems like another way of putting a VAT.
Property taxes seem like a poor solution too...for it would prevent people from living off their land. Also, the wealthy may have huge sums of money, but not much more property than everyone else, so they will have less burden.
Valject: Voluntary taxation. This is a bit like "honest politician" is it not? Clayton - http://voluntaryistreader.wordpress.com | Post Points: 5
Voluntary taxation.
Eh, if you absolutely have to pick one, property tax. Assuming that in the world where we get to pick our tax, the role of the state is restricted to the defense of the persons and property of the citizens, a property tax would at least be a sort of proportional way to charge you based on protection service consumption. It wouldn't prevent people from living off their land if the tax wasn't outrageous, and presumably, if all of your wealth is in liquid assets like gold or something, it would still cost less to protect those assets than it would to protect an equivalent value of land. I mean, obviously, there are a ton of failings with a property tax, but we're working off the assumption here that some form of taxation is legitimate/necessary, and the property tax seems like it probably screws everyone a little bit less than other methods.
All forms of taxation are the least harmful.
Why? Because the market decides the economic incidence of the tax, which is often not the same as the legal incidence of the tax. And because the market provides all the tax planners, tax planning softwares, financial services,.etc to do the maximum to reduce your own tax incidence, if you feel the need to use them.
Consider the fact that businesses are willing to do business in even high tax regions of the world, and that they will hire executives at above normal salaries to make up for local income tax rates, thus ensuring that the incidence of the tax falls on them rather than the executive.
@Prateek: Utter hogwash, sounds like the Efficient Market crap about how inflation doesn't systematically affect the economy because investors just price it in.
Inflation and taxes do have a cost, yes, but just the way the benefits/disadvantages to various parties from inflation cease after a while, as prices, wages, savings, and investments adjust back again and another round of inflation is needed to continue the process, so is it that various groups manage to handle taxes in the long run, as long as the current tax system doesn't change too frequently or as long as taxes aren't raised too frequently.
Do remember, Clayton, that a really large part of the Swedish, Norwegian, Danish, and Finnish economies has been in the the informal sector.
What would you say about the fact that Antoine Zacharias, an executive at French firm Vinci, made a claim for 81 million euros when he left - a figure higher than what is paid to any similar construction business executive in even the US? He had already accounted for what would be left to him after taxes, which is why such pensions and perks are much higher in France than in the nearby Britain.
I think that property taxes are likely the most fair types of taxation. Assuming that you're hiring the government to protect the land you own, it makes sense that they charge a fee based on its value.
That said, if property owners are the only ones paying taxes, I think that they should get more of a say in how the government is run.
but of course the gov't itself decides how much your property is worth. Also, in a world where property tax is seen as legit, there can't be any private property. All property is really rented from the government.
The assessment should be done by a third-party to prevent government abuse.
As for the freedom aspect, protection of property is the reason that people collectivize to begin with - so the tribe next door doesn't raid and plunder your village. I don't think that anyone who doesn't own property should be able to make decisions on how much to tax property owners, though. Hence, only property owners should be able to vote on issues related to property tax. Perhaps in rural areas, no tax would be necessary at all and property owners would be responsible for protecting their own property.
I think that paying taxes on the land you own could be seen as a cost of ownership, like maintaining a fence, mowing your grass, or fixing a leaking roof. It seems reasonable to me that a community may ask someone to leave who doesn't contribute to its defense - you can't get something for nothing, after all. I'd suggest dealing with this situation by the government paying the people for the assessed value of their property minus what was owed in back-taxes and then reselling the property.
The bottom line, however, is that taxes should be low enough not to be burdonsome. Most government services should be funded by service fees rather than by direct taxation.
Chris:I think that paying taxes on the land you own could be seen as a cost of ownership,
You should read Rothabard's Power & Market. The property tax, especially a general one, can be and is a very destructive tax.
Chris: Most government services should be funded by service fees rather than by direct taxation.
Most government services should be funded by service fees rather than by direct taxation.
If you're going to allow people to pay or not pay these fees (since you don't call them taxes), then why not have them work for profit also, and if they operate for profit, why not remove the coercive monpoly priveleges and open thesese services for competion so we can actually have proof for their service?
I certainly will. I've been slowly tackling economics texts, but I can only take on so much at a time. Mind you, I think that obligatory taxes should be limited to paying for the protection of natural rights, which I think is the proper role of government. So, taxes would pay for a police force (and possibly fund a militia). Any other service which a locality deems valuable to be provided by the government should be paid for with user fees.
As I mentioned above, services provided by a government should be determined by the locality. I see no reason why a private enterprise couldn't successfully compete with a government enterprise which is entirely funded by user fees. Ultimately, I don't think that governments can compete with private enterprise when competing on equal ground, so private enterprise will likely snuff out government competition.
Chris:Mind you, I think that obligatory taxes should be limited to paying for the protection of natural rights, which I think is the proper role of government.
An expropriating private property right protector is a contradictory of terms. Something that contradicts itself cannot be true. Do you agree with this fundamental law of logic?
Consumption Tax. If we are ONLY taxed on outr consumption then every tax is voluntary. I still think it is basically unfair, but if we must exchange thoughts with in terms of mainstreamonomics....
Eating Propaganda
What do you mean i don't care how your day was?!
Jacob: If we are ONLY taxed on outr consumption then every tax is voluntary.
So an income tax is also voluntary since nobody is forcing you to work and earn an income. What is wrong with this reasoning? Same as in yours.
@DD5: Precisely - there is no such thing as a voluntary tax... it really is a classic example of an oxymoron. It's like gentle, loving murder. Just doesn't make any sense at all.
Clayton -
The alternative is for the government to neglect to protect property if the tax is not paid, in the same way a security firm would stop showing up if you stopped paying them. I wonder about protecting life and liberty, though. If someone doesn't pay their taxes, does the justice system not protect them from assault or involuntary servitude?