Your ideal tax rate structure?

[Rand M Arthur]

I'm not an economist, so I'll leave the actual percentages to them. But, broadly speaking;

- Flat income tax at a reasonably low rate, so that those who work for money aren't subsidizing those whose money works for them.
- Progressive land value tax, with deductions for primary residence. Being agressive with this will stop a lot of the land banking issues that big cities around the world are seeing.
- Progressive capital gains tax, with extra features for ponzi-style share buybacks. The fact that the stock markets are at all time highs whilst we are seeing record unemployment in the west, illuminates how detatched the billionaire class has become from the real economy. You are facing a foreclosure, whilst your tax dollars are making Jeff Bezos, Charles Koch and Warren Buffet richer.
- Carbon tax and pollution tax, with the shares ringfenced for income-tax rebates. British Columbia have a really good model for how this works and is popular.
- Moderate sales tax, with deductions for food and medicine. Over consumption is a big problem at the moment, and it is not sustainable long term. 3% growth can't go on forever or we as a species will rip this planet bone dry.
- I'm not a fan if inheritance tax, and if you get tax policy right before hand, there is no need to redistribute it through estate raids anyway.

EDIT: Also, the revenue should swing heavily to local governments. Localism is the future, with provincial/state and federal governments only brought in to streamline between different local or provincial/state governments.

 

[Rand M Arthur]

Talking about structure so fuck the numbers (same structure can be used to raise different amounts, obviously). No payroll or corporate taxes, income tax kicks in after income in the top 1% of the population (kind of arbitrary number but the point is to incentivize companies to spend a higher percentage of payroll on lower incomes). Capital gains is treated as income. Land-value tax accounts for most revenue. Additional carbon taxes, sugar taxes, etc.--stuff that harms the community is taxed. Inheritance values up to 10x median income (again somewhat arbitrary number but this is more about the principles) are untaxed; 80% beyond that (again somewhat arbitrary and negotiable). Portion of the inheritance tax goes to building up a diversified SWF (public and private equity, land, etc.).

This is actually very impressive, minus the inheritance tax.

 

[Scheme]

@Scheme I mean for the world, Holmes.

Then people are still not going to open businesses. Why would someone open a restaurant (whose margins are pretty low) any income they earn is cut by 70%? If they make money they probably will make less than minimum wage and have to close down.

 

[panamaican]

It's a really tough question because I don't have a real handle on the costs. I think social services are important, the military is important, infrastructure is important, etc. They all have to be paid for.

I'm probably clearer on the tax carve outs that we don't need. Like corporate welfare, marriage tax breaks, mortgage interest tax breaks, long term cap gains tax breaks, etc. Hell, I'm even rethinking charitable donations because of how often it's simply a way to redirect money from the front pocket to the back pocket of the donor.

If I was to prioritize receipts it would be social services (which includes education) first, then infrastructure, finally military.

 

[Grant Me Revenge]

@Scheme oh heaven forbid sleazy small business owners don’t make bank. Restaurateurs are the scum of the earth and actively advocated for the revival of Covid so they could put their workings on the front line to make a paltry sum.
I’m a socialist, bro, and seeing the depravity of small business owners during this pandemic has made me a more resolute socialist than ever before. Fuck the boss man.

 

[TeTe]

I'll go with 0 percent for Federal income tax for everyone. The Feds can fund whatever they need through other means (tariffs, land use tax, etc)

and a progressive income tax on the state level maybe ranging as high as 25 percent for top earners in each individual state.

 

[all caps]

Eh, yall dont wanna hear that.

 

[Jack V Savage]

Most taxation doesnt bother me but property tax on residence does cuz it means you never truly own anything. I think local taxes should be raised and everyone should get 1 residence exception however property taxes should apply past the 1 exception rule.

I think you have a much better claim to deserving the full value of your labor (though note that the market value of it is enhanced by factors out of your control) than you do to own a piece of land that existed before you were born and will exist long after you die, and that you rely on the gov't to protect. And any gains in the value of the piece of land are due to the activity of other people (think of how an empty lot in a city can be worth millions). Obviously that doesn't apply to the structures you build on the land.

The general principle should be that the economic value that you produce as an individual is yours and the value that is produced by society collectively or nature should be as broadly distributed as possible (avoiding the tragedy of the commons, though).

 

[Ryo]

I think you have a much better claim to deserving the full value of your labor (though note that the market value of it is enhanced by factors out of your control) than you do to own a piece of land that existed before you were born and will exist long after you die, and that you rely on the gov't to protect. And any gains in the value of the piece of land are due to the activity of other people (think of how an empty lot in a city can be worth millions). Obviously that doesn't apply to the structures you build on the land.

The general principle should be that the economic value that you produce as an individual is yours and the value that is produced by society collectively or nature should be as broadly distributed as possible (avoiding the tragedy of the commons, though).

Yea, well that land existed long before the United States government (or any government) and it will exist long after they are gone. Do they really protect it? As far as I'm concerned the people themselves are fully capable of protecting it themselves. The United States Military could literally be cut in half and nobody would be invading us. Tax on personally property is definitely theft.

I mean, in southern California for example, most houses around here are pay 5000 dollars or more per year. Over a period of 40 yeara (let's say) look at the ridiculous amount of money that's been extorted. Government racketeering.

 

[BIKES!]

Progressive taxes is the only way to go and the current rates make a lot of sense.

Here are the areas I think we need to explore:

Payroll tax cap reinstates after $1M
Changes to Prop 13 (limit the # of pass downs)
Inheritance tax changes

 

[Gandhi]

Just below the Laffer Curve

The laugh out loud curve? Is that still even a thing?

Don’t get me wrong under punitive levels of massive taxation and government control of economic resources there is a point where cuts in the top marginal tax rates actually could generate more tax revenues through long term economic growth. I don’t think that point was anywhere near where Laffer said it was.

 

[Gandhi]

https://en.m.wikipedia.org/wiki/Geolibertarianism

Or LVT as the main basis.

 

[Jack V Savage]

Yea, well that land existed long before the United States government (or any government) and it will exist long after they are gone. Do they really protect it? As far as I'm concerned the people themselves are fully capable of protecting it themselves. The United States Military could literally be cut in half and nobody would be invading us. Tax on personally property is definitely theft.

I mean, in southern California for example, most houses around here are pay 5000 dollars or more per year. Over a period of 40 yeara (let's say) look at the ridiculous amount of money that's been extorted. Government racketeering.

You wouldn't have private land ownership at all without a gov't. And, yeah, CA property taxes are ridiculously low.

 

[PolishHeadlock2]

The laugh out loud curve? Is that still even a thing?

Don’t get me wrong under punitive levels of massive taxation and government control of economic resources there is a point where cuts in the top marginal tax rates actually could generate more tax revenues through long term economic growth. I don’t think that point was anywhere near where Laffer said it was.

Definitely agree.

The curve exists, Laffer just has no fucking clue where it is and has proven himself to be a joke in his field.

It's just my go to response when anyone asks what the "ideal tax rate is" because who the fuck knows and it's a dumb question.

The real question is what services should the government be providing and what tax rate allows you to pay for them.

 

[Ryo]

You wouldn't have private land ownership at all without a gov't. And, yeah, CA property taxes are ridiculously low.

So you feel that you need to pay the government thousands and thousands of dollars just for existing on a plot of land they dont own? Where is your proof that 100 million well armed citizens with the inclination couldnt defend their land? Do you really think the United States military is the sole reason why we have not been invaded for almost 2 hundred years? No where did I day we didn't need a government... I'm talking the size of government and questiong the need for property tax.

Also considering the house prices in southern California and the bay area, is it really that low? I know what the percentage is.

 

[JDragon]

That is a good point but to be fair his suggestion calls for people to choose among government programs for funding which is more a restriction. The money isn't going to a charity, it goes to the government still you just get to choose which agency or program gets funded.

Thank you, just wanted to type a post but saw you already replied

 

[Gandhi]

Definitely agree.

The curve exists, Laffer just has no fucking clue where it is and has proven himself to be a joke in his field.

It's just my go to response when anyone asks what the "ideal tax rate is" because who the fuck knows and it's a dumb question.

The real question is what services should the government be providing and what tax rate allows you to pay for them.

Well said this is exactly right. Supply side economics is so cultish that sometimes people forget that at some point it is true, just not how LOLer was stating it. Saw him speak live once, it was comical.

Agreed you need to start with the "what" of government services (as well as the related "how much"). Once that level of govt spending is decided, given that we could just print money, there is need to even have taxes, the overall real output is the same. I think the rate become a question of not only what is needed but what where its most effective to take the wind out of the balloon (and at some point things like incentives and drag come into play).

 

[Jack V Savage]

So you feel that you need to pay the government thousands and thousands of dollars just for existing on a plot of land they dont own? Where is your proof that 100 million well armed citizens with the inclination couldnt defend their land?

Odd question. We know that before we had strong gov'ts, we didn't have private land ownership. In a lot of cases, we know how the current system came to be. For example, in many places, you had public land that peasants used to farm on or graze animals, and then gov'ts closed them off, which drew violent reactions from the public as part of a massive social-engineering project (forcing peasant farmers to move to the city to become factory workers and turning common land into private property). People with land that isn't particularly valuable could probably defend it in the absence of a gov't, but large landowners would need their own armies, which would be much more expensive than paying taxes, and the wealth the land would generate would be much less.

Do you really think the United States military is the sole reason why we have not been invaded for almost 2 hundred years? No where did I day we didn't need a government... I'm talking the size of government and questiong the need for property tax.

The threat would come more from inside. You wouldn't have homeless people without a gov't, right? Renters seem unlikely, too. Except to the extent that also work on their land, landlords are just leveraging power granted by the gov't to extract money from people who earn it. No one signed up to a system where the gov't determines who has enforceable claims to all the land in the territory. If taxation is theft, property also is, and for the same reason, unless it's taxation on property (in which case neither is theft).

Also considering the house prices in southern California and the bay area, is it really that low? I know what the percentage is.

Well, first, note that the gov't artificially restrains housing supply, which drives prices up. So any tax on that is just the gov't getting back a small portion of the huge gift given to landowners. And the excessively low property taxes provide less incentive for owners to maximize the value of their land (essentially, it's the reverse of excessively high income taxes).

 

[Gandhi]

The land thing is also just pragmatic as it has the least drag on the economy. Try to think how economic incentives change from a land tax. Does it discourage investing, building, spending, saving, anything? It’s really a one time transfer of wealth (discounted value of the tax) out of the hands of an asset prior to value adds (applied to natural resources as well).

I also get that philosophically, no one can really claim land so I like that. Although I had all my money in stocks for a long time, which I purchased through proceeds of my labor, not sure that because I then sell stock and then buy land that I am now guilty of some poisonous tree. But to the extent that capitalism functions off of the consent of the willing and from resources that could belong to all, a land tax that goes to society makes sense in a lot of ways despite some pragmatic considerations.

 

[Islam Imamate]

Okay so just for fun I decided to see how much tax revenue you could generate with just zakat and kharaj(land tax). Zakat is unanimously considered a 2.5% wealth tax and for the kharaj we'll set the rate at 10%, or in other words a tithe, which is apparently what lands tilled by Muslims were taxed at in the early Islamic period.

The total estimated wealth in the US is about ~$98 trillion and the total value of the land is ~$23 trillion with about ~2 trillion being federally owned land leaving us with a total of $21 trillion in private hands. Se we're left with about ~$77 trillion of non-land wealth and ~$21 trillion in land.

2.5% of $77 trillion is about $1.925 trillion and 10% of $21 trillion is ~2.1 trillion for a total revenue of ~$4.025 trillion in tax revenue. I'm sure there are countless problems with this calculation but its still interesting to consider how much tax revenue could be generated with just a wealth tax and an LVT.