This is one of my favorite sections from Promoting Progress. I make this same point repeatedly when someone tells me that we ought to simply “raise taxes” to fund bankrupt social programs like Medicare, Medicaid, and Social Security.
My counter is to ask…what kind of taxes? On whom?
The answer is inevitable “the rich.”
Pulling on the thread further, we find that this “policy” prescription is not well thought out. It’s ideological, seeking to indiscriminately confiscate wealth from someone, just because they have more.
To be clear, I am not against the idea of social programs at all, but they need to be structured in a sustainable fashion. Otherwise, raising taxes further is merely dumping productive resources into unproductive ones.
Further, deadweight loss grows to the square of the tax rate, meaning there is a fundamental limit to how much we can raise taxes. We’d be better off changing the types of taxes we levy. A Land Value Tax, as I outlined here, should replace most other forms of taxation https://www.lianeon.org/p/just-tax-the-land
I checked out your link and supplied a comment over there.
I am somewhat skeptical of the land tax idea, although it can be a complex topic that I may not fully or properly understand.
I note that the Amazon blurb for Mr. Magoon's 2nd book does suggest this as one part of his potential solution package: "replacing property taxes with a land value tax"
Right now I might favor combining salary/wage income and capital gains into one bucket, and then progressively reduce their applicable tax rate as the actual realization of gain is achieved (by say 20% per year for 4 years, ending at 15% on year 5?). This is close to the existing scheme, but might incentivize longer term investment over short term speculation? [some people can and would delay receiving their salary but have a lowered tax rate due to the risk the employer might go out of business first.]
There are certainly challenges with the land tax idea, but those challenges are not all that different from property taxes. I think, on balance, an land value tax would work and would be superior to the status quo...though possibly not at the high rates that some advocate for. I have an essay coming out on DBCFT which might also target "economic rents" in a similar vein as an alternative, or supplement to, LVT.
As I think on this just a little more -- how does income from financialized assets (stocks, bonds, mortgages, etc.) get factored into the tax amount or assessment under LVT?
I come at this with a bias from the Right, so I fully laud your criticisms of the Left, while holding a "he is partly right and somewhat wrong about the Right" viewpoint. I suppose a Left biased commenter would say the same about your critique of the Left. :-)
I am afraid we have evolved and separated into two "religious" camps, with each able and willing to blame the other as the initial "instigator" of the failed/ flawed conditions and situations we observe today. David P. Goldman points out that part of the reason the 30 Years War [1618-48] ended was when about 30% of the male combatants on each side had been killed, maybe unto the 2nd or 3rd generation. There were no more viable soldiers left to do the fighting. :-( There are also plenty of articles discussing the collapse of the Roman Republic or Empire, and presenting the cycles of "hard times and hard men" from initiation around to collapse again.
I have to admit that every time I thought of a possible comment on some area we might address in common, I realized there was some form of governmental intrusion that helped muddy the waters for making corrective moves. Interest groups and rice bowls that would be impacted. Thus perhaps at best we end up trading off one desire on our side for a desire on the other side, but get only compromised solutions in any case. Educating the populace about the merits of metrics and measurements of results, plus sunset provisions to end failed approaches, seems like a reasonable place to start. But if the media and educational institutions are not aligned to support such efforts/ outlooks, then that path is also not likely to be useful.
I suppose there are policy/ practical areas involving physical facilities where some agreement on approaches to infrastructure (roads, bridges, rail, airports, sea ports and harbors - and space ports?) might achieve some level of agreement. And areas of "pure morality" such as the abortion issue where no agreement can really be expected [as the issue is comparable to slavery and abolition in intensity/ relevance]. In the middle we have things that bridge physical and abstract aims, such as funding or defunding police to "reduce" crime, housing vs. NIMBY, various education "solutions" as to resources vs. educational content, and even border security vs. immigration (oppressed peoples, refugees vs. economic migrants, want low wage workers vs. diluting wages for the working class, etc.)
We can't even keep nonsense out of the national security discussions.
OK, I will order your book and hope it or your posts address some of these issues with viable and believable ideas. I remain skeptical but I am trying to be open minded (as long as all my brains don't fall out).
This is one of my favorite sections from Promoting Progress. I make this same point repeatedly when someone tells me that we ought to simply “raise taxes” to fund bankrupt social programs like Medicare, Medicaid, and Social Security.
My counter is to ask…what kind of taxes? On whom?
The answer is inevitable “the rich.”
Pulling on the thread further, we find that this “policy” prescription is not well thought out. It’s ideological, seeking to indiscriminately confiscate wealth from someone, just because they have more.
To be clear, I am not against the idea of social programs at all, but they need to be structured in a sustainable fashion. Otherwise, raising taxes further is merely dumping productive resources into unproductive ones.
Further, deadweight loss grows to the square of the tax rate, meaning there is a fundamental limit to how much we can raise taxes. We’d be better off changing the types of taxes we levy. A Land Value Tax, as I outlined here, should replace most other forms of taxation https://www.lianeon.org/p/just-tax-the-land
I checked out your link and supplied a comment over there.
I am somewhat skeptical of the land tax idea, although it can be a complex topic that I may not fully or properly understand.
I note that the Amazon blurb for Mr. Magoon's 2nd book does suggest this as one part of his potential solution package: "replacing property taxes with a land value tax"
Right now I might favor combining salary/wage income and capital gains into one bucket, and then progressively reduce their applicable tax rate as the actual realization of gain is achieved (by say 20% per year for 4 years, ending at 15% on year 5?). This is close to the existing scheme, but might incentivize longer term investment over short term speculation? [some people can and would delay receiving their salary but have a lowered tax rate due to the risk the employer might go out of business first.]
There are certainly challenges with the land tax idea, but those challenges are not all that different from property taxes. I think, on balance, an land value tax would work and would be superior to the status quo...though possibly not at the high rates that some advocate for. I have an essay coming out on DBCFT which might also target "economic rents" in a similar vein as an alternative, or supplement to, LVT.
Please keep your comments to the topic of the post. I will be writing about this topic in another post soon.
As I think on this just a little more -- how does income from financialized assets (stocks, bonds, mortgages, etc.) get factored into the tax amount or assessment under LVT?
And what about Social Security payouts?
Please keep your comments to the topic of the post. I will be writing about this topic in another post soon.
I come at this with a bias from the Right, so I fully laud your criticisms of the Left, while holding a "he is partly right and somewhat wrong about the Right" viewpoint. I suppose a Left biased commenter would say the same about your critique of the Left. :-)
I am afraid we have evolved and separated into two "religious" camps, with each able and willing to blame the other as the initial "instigator" of the failed/ flawed conditions and situations we observe today. David P. Goldman points out that part of the reason the 30 Years War [1618-48] ended was when about 30% of the male combatants on each side had been killed, maybe unto the 2nd or 3rd generation. There were no more viable soldiers left to do the fighting. :-( There are also plenty of articles discussing the collapse of the Roman Republic or Empire, and presenting the cycles of "hard times and hard men" from initiation around to collapse again.
I have to admit that every time I thought of a possible comment on some area we might address in common, I realized there was some form of governmental intrusion that helped muddy the waters for making corrective moves. Interest groups and rice bowls that would be impacted. Thus perhaps at best we end up trading off one desire on our side for a desire on the other side, but get only compromised solutions in any case. Educating the populace about the merits of metrics and measurements of results, plus sunset provisions to end failed approaches, seems like a reasonable place to start. But if the media and educational institutions are not aligned to support such efforts/ outlooks, then that path is also not likely to be useful.
I suppose there are policy/ practical areas involving physical facilities where some agreement on approaches to infrastructure (roads, bridges, rail, airports, sea ports and harbors - and space ports?) might achieve some level of agreement. And areas of "pure morality" such as the abortion issue where no agreement can really be expected [as the issue is comparable to slavery and abolition in intensity/ relevance]. In the middle we have things that bridge physical and abstract aims, such as funding or defunding police to "reduce" crime, housing vs. NIMBY, various education "solutions" as to resources vs. educational content, and even border security vs. immigration (oppressed peoples, refugees vs. economic migrants, want low wage workers vs. diluting wages for the working class, etc.)
We can't even keep nonsense out of the national security discussions.
OK, I will order your book and hope it or your posts address some of these issues with viable and believable ideas. I remain skeptical but I am trying to be open minded (as long as all my brains don't fall out).