Tax reform

[Kat Kanning]

It occurs to me that one reason they'd be wanting a national sales tax "rather than"  (i.e in addition to) the income tax is it makes it much harder for tax evaders.  They can compel every business to become their tax collectors, at little cost to the government.  Maybe the "problem" with tax evasion is more widespread than we know!

http://www.lewrockwell.com/paul/paul237.html

[BillG]

It occurs to me that one reason they'd be wanting a national sales tax "rather than"? (i.e in addition to) the income tax is it makes it much harder for tax evaders.? They can compel every business to become their tax collectors, at little cost to the government.? Maybe the "problem" with tax evasion is more widespread than we know!

http://www.lewrockwell.com/paul/paul237.html

that is why shifting taxes off of buildings and onto land values is so compelling.

you can't hide it and it is none evasive to assess it - heck why not let the homeowner assess their own land values?

[Gard]

It's a rich stew to hear the politicians tell us what the "best" kind of tax would be. We hear some say that a consumption tax would be best, because it would "spur investment". We hear that a "flat" tax would be best, because it uses the same "rate" and is inherently "fair". We hear that an excise tax is the way to go...

As William Shatner said, "No more BLAH, BLAH, BLAH!"

The impossibility of reconciling "fairness" with the seizure of a person's productive labor according to the dictates of the majority is patently obvious. When one decides to look into the practical ways in which these supposedly "fair" taxes can be manipulated to make it MORE fair for some than for others, it becomes clear that there will never be a system of taxation that is not open to manipulation and control from interested parties.

A sales tax will have certain "essential items" exempted. A flat tax will exempt the "poor", even though we are all supposed to be equal under the law, and it is patently unfair to tax somone who earns 200k/year a penny more (based on a flat percentage of his earnings) than someone who earns 30k, since they are all supposed to enjoy the wonderful product of government equally. Any attempt to calculate how much they truly receive in government services is a literal impossibility... Which leads us freedom-lovers to often tell people that a "fee for sevice" system is the closest approximation to true fairness. And, of course, that leads one to the ethical conslusion many libertarians try to espouse: If we are to agree that a fee for service system is the closest thing to fairness in taxation, why not simply privatize the whole system in the first place.

The sales or VAT inspires gladhandling of certain industries, and underground economies. Property taxes lead to arbitrary government evaluations of homes and corruption. Flat taxes lead to special "exceptions".

Anyone agree that the best thing to do is scrap this government thing altogether? Hmm... I guess I would have a hard time writing such a thing on a board devoted to the Republican or Democrat parties. Thank you for a great site. This is my first time here.

-- Gardner G

[AlanM]

Welcome Gard,
Thanks for your thoughtful post.
The question then becomes one of tactics. How to privatize?

[BillG]

The impossibility of reconciling "fairness" with the seizure of a person's productive labor according to the dictates of the majority is patently obvious.

unimproved land values are not the fruits of the landowner's labor...they are actually created by your neighbors improving their property thus making your location more desirable and your labor increases your neighbors' unimproved land values.

When one decides to look into the practical ways in which these supposedly "fair" taxes can be manipulated to make it MORE fair for some than for others, it becomes clear that there will never be a system of taxation that is not open to manipulation and control from interested parties.

like I said, why not simply have the landowner decide what their unimproved land values are?

this isn't an original idea, can you guess what famous Libertarian suggested it?

[Gard]

We have two slightly different lines of thinking here. Regardless of whether land has been improved or not, the very process of purchasing it, or even holding it after inheriting it, represents an expenditure of either one's income (the fruits of one's labor), time and interest, or opportunity costs. In the first case, any arbitraty taxation of land based on a government functionary's view of its value is theft, and automatically decreases the utility of the land. In the second instance, where the land has been inherited, even in not acting to inprove it, one makes a decision based on his own preferences, and it is not the place of another to decide how to judge the value of that decision. Opportunity costs abound when considering to hold undeveloped land. Hence, we see some people willing to sell their homes in NJ to the government, because the government wants to take them through eminent domain and then let Donal Trump build a casino there.

However, one woman held her land. At any time, she could have reaped the rewards of the sale, even as improvements were happening all around her. But she held. This ended up making her land even more valuable. There cannot be a dispute that there is a two-way road between holding unimproved land for future sale, thus improving the value to the owner, and neighbors improving their land. There is a give and take, and it is not solely based on others improving their land that the value of a piece of property can increase. Land owners know this, and often encounter decisions as to whether to buy or sell. These decisions represent their opportunity costs, and they vary not solely based on how others improve property around them.

John Locke did not believe there could be an abstract conception of unimproved land as reflecting one's labor. It was one of the few instances he was wrong.

As far as allowing the land owner to evaluate the value of his land for tax purposes... Isn't that putting the cart before the horse? isn't one accepting the notion that the taxation is acceptable, when it is not? If someone is being held-up and the robber says, give me what you think you ought to, but give me something, it's still theft, isn't it?

Let me know if I'm missing something from your perspective on it... Take care.

[BillG]

Let me know if I'm missing something from your perspective on it...

Locke said (in his Proviso) private enclosure of the commons was only justified if there was "enough and as good left for others".

the extent that the proviso is violated is reflected monetarily in the amount of economic rent the site will command and measures how much the excluded are economically disadvantaged by the enclosure to what we all have an inalienable, INDIVIDUAL equal access right to.

the sales price of land is simply uncollected economic rent...in a perfect Lockean world there would be no sale price for land because it would not mattter where you located, no one would be economically disadvantaged if all the economic rent were directly predistributed (in equal amounts) to the citizens within the taxing authority.

where economic rent appears under sarcity conditions, if the excluded are forced to pay it to the landowner then the rights to the fruits of the tenant's labor & self-ownership are sacrificed and overall liberty suffers whereas if the landowner pays it he doesn't contribute any labor to producing the land itself nor the unimproved land value so overall liberty is actually enhanced.

[Gard]

Welcome Gard,
Thanks for your thoughtful post.
The question then becomes one of tactics. How to privatize?

Alan, I think the process is a long one, obviously, and intimately tied to our ability to express the three major problems with relying on government. The first is ethical -- both in the conceit of the majority telling the minority how to value the fruits of its labor, and in the idea of seizure of that wealth. The second is the matter Hayek and von Mises discussed so well, the calculation problem. One cannot make proper calculations about anything if government intervenes in the process of financial transactions. The third is the problem of "closeness" to the problem, the information dilemma. If I am too ignorant to use my own capital to solve my own problems, how am I bright enough to let someone else make those decisions for me, AND for many others? The path towards convincing people to privatize seems to be brighter if we can stress those important factors, the trump card being, of course, the ethics of redistribution. One can lead people to looking at privatizing by going through the process of studying different tax options, studying their ethical ramifications, and leading another person to the consideration that anything we want done enough can be done privately, and if we cannot get enough people to pay for it privately, there is certainly no justification to take someone's money against his will, especially if he just proved to us he wouldn't have supported the action by paying of his own free will.

The trouble I see is that there is a certain portion of our population that truly believes it is ethical to take their neighbors' money. Even using the Golden Rule argument against them is useless, because they are massive hyprocites. NH has had more and more of them moving here. So keep up the fight!!!!!!

[AlanM]

Welcome Gard,
Thanks for your thoughtful post.
The question then becomes one of tactics. How to privatize?

Alan, I think the process is a long one, obviously, and intimately tied to our ability to express the three major problems with relying on government. The first is ethical -- both in the conceit of the majority telling the minority how to value the fruits of its labor, and in the idea of seizure of that wealth. The second is the matter Hayek and von Mises discussed so well, the calculation problem. One cannot make proper calculations about anything if government intervenes in the process of financial transactions. The third is the problem of "closeness" to the problem, the information dilemma. If I am too ignorant to use my own capital to solve my own problems, how am I bright enough to let someone else make those decisions for me, AND for many others? The path towards convincing people to privatize seems to be brighter if we can stress those important factors, the trump card being, of course, the ethics of redistribution. One can lead people to looking at privatizing by going through the process of studying different tax options, studying their ethical ramifications, and leading another person to the consideration that anything we want done enough can be done privately, and if we cannot get enough people to pay for it privately, there is certainly no justification to take someone's money against his will, especially if he just proved to us he wouldn't have supported the action by paying of his own free will.

The trouble I see is that there is a certain portion of our population that truly believes it is ethical to take their neighbors' money. Even using the Golden Rule argument against them is useless, because they are massive hyprocites. NH has had more and more of them moving here. So keep up the fight!!!!!!

Again, thoughtful post. One thing that is important to do is to just spread the word about freedom, taxation as theft, private schools versus forced public schools, etc. I have always been amazed at how few ever think of alternatives, or even that there are alternatives, they have been brain-washed so well. The more JQ citizen hears from our voices, the bigger the possiblitiy circle becomes for them. I agree, keep up the fight.

[AlanM]

Let me know if I'm missing something from your perspective on it...

Locke said (in his Proviso) private enclosure of the commons was only justified if there was "enough and as good left for others".

the extent that the proviso is violated is reflected monetarily in the amount of economic rent the site will command and measures how much the excluded are economically disadvantaged by the enclosure to what we all have an inalienable, INDIVIDUAL equal access right to.

the sales price of land is simply uncollected economic rent...in a perfect Lockean world there would be no sale price for land because it would not mattter where you located, no one would be economically disadvantaged if all the economic rent were directly predistributed (in equal amounts) to the citizens within the taxing authority.

where economic rent appears under sarcity conditions, if the excluded are forced to pay it to the landowner then the rights to the fruits of the tenant's labor & self-ownership are sacrificed and overall liberty suffers whereas if the landowner pays it he doesn't contribute any labor to producing the land itself nor the unimproved land value so overall liberty is actually enhanced.

Taking your so-called "economic rent" before a property is sold places a harsh burden on the property owner. Also, who determines the "value" of a property before a sale even occurs implies some kind of assessing authority which becomes an additional burdon on all.

[BillG]

Taking your so-called "economic rent" before a property is sold places a harsh burden on the property owner

and the tenant and those trying to get into the home market aren't equally burdened?

there isn't the option of not having the economic rent (or land value tax) because it naturally attaches to locations (remember location, location, location) under scarcity conditions (and we aren't making any more)

your only have two options for paying:

1. those excluded
2. those privileged

if the excluded pay then overall liberty suffers
if the privileged pay then overall liberty increases

seems like a no brainer to me...

who determines the "value" of a property before a sale even occurs implies some kind of assessing authority which becomes an additional burdon on all.

as I said, have the owner of the property sets the price and the market will determine the price.

[AlanM]

Taking your so-called "economic rent" before a property is sold places a harsh burden on the property owner

and the tenant and those trying to get into the home market aren't equally burdened?

there isn't the option of not having the economic rent (or land value tax) because it naturally attaches to locations (remember location, location, location) under scarcity conditions (and we aren't making any more)

your only have two options for paying:

1. those excluded
2. those privileged

if the excluded pay then overall liberty suffers
if the privileged pay then overall liberty increases

seems like a no brainer to me...

who determines the "value" of a property before a sale even occurs implies some kind of assessing authority which becomes an additional burdon on all.

as I said, have the owner of the property sets the price and the market will determine the price.

I reject your whole premise. I do not happen to believe in the tenets of Locke's Proviso. You do. You make assumptions based on the Proviso as if they are fact. They are not. It is a philosophical belief, just as Marxism, Merchantilism, Capitalism. You, and your Georgist buddies, have never convinced me that the Proviso works. I am not falling into your trap of accepting the Proviso as fact, and then arguing the details.

[BillG]

I am not falling into your trap of accepting the Proviso as fact, and then arguing the details.

ok fine...

nothing in my last post is based on Locke so try and refute it.

[Gard]

Let me know if I'm missing something from your perspective on it...

Locke said (in his Proviso) private enclosure of the commons was only justified if there was "enough and as good left for others".

the extent that the proviso is violated is reflected monetarily in the amount of economic rent the site will command and measures how much the excluded are economically disadvantaged by the enclosure to what we all have an inalienable, INDIVIDUAL equal access right to.

the sales price of land is simply uncollected economic rent...in a perfect Lockean world there would be no sale price for land because it would not mattter where you located, no one would be economically disadvantaged if all the economic rent were directly predistributed (in equal amounts) to the citizens within the taxing authority.

Hi... the trouble with Locke's Proviso is twofold. First, it is a non-starter, because he does not define his terms. He does not say what is "enough", and he does not define what is "good" land to be left to others. His is a tautology, because such terms can only be defined subjectively, excluding any objective valuation of the supposed commons. His remarks inevitably lead one back to the need for some kind of market process, whereby the multitudinous subjective valuations of the uses and needs for land can be exercised through competition for recourses. While Locke's political tracts are valuable, they fell short on economic terms. The French Physiocrats began exploring this in the 18th Century, and did a remarkable job realizing that in inter-personal relations, it was inevitable that prices and rents would be applied to anything holding value to people. Even if one were to try to keep land in a "common state" it would be impossible because of the various interests of people. It is either going to be held by government, under the auspices of "the commons", and thus will be subject to all the stresses and debates over the many uses to which many people want it to be put, or it will be allowed to be held privately, and will reflect its value through the market mechanism. Locke tenaciously held to a philosophical non-starter, even if one were to remove the economic point of view. If, as he believed, the application of one's God given abilities to his labor invested it with value and brought it in line to being one's property, then how does one separate physical items from the abstract? Land, water, metals, wood, grass to feed animals, produce, the tools which are used to make other items, all derive themselves from an origin in the land, perse. To negate ownership concepts in land itself is to negate the idea of ownership of any commodity or item that is derived from that land -- ie, everything physical. To negate ownership of land would also negate the ability to utilize one's mind when applying his skills to the land. This would mean a negation of the very God-given abilities Locke believed we had a right to exercise. Hence, a tautology.

Now, the other issue to explore is the fact that under a "commons" paradigm, rents cannot be determined. If rents cannot be applied to land, in other words, if present and future values cannot be determined, then there can be no use for the land that works in conjunction with improving the lives of those involved in the market. All calculation processes are halted, and economic productivity is stifled. Lives are hurt, and society does not develop.

Locke's belief in the commons, as based on his transition out of the "State of Nature", is incompatable with human nature. Ahh, if only he'd met Frederic Bastiat!

where economic rent appears under sarcity conditions, if the excluded are forced to pay it to the landowner then the rights to the fruits of the tenant's labor & self-ownership are sacrificed and overall liberty suffers whereas if the landowner pays it he doesn't contribute any labor to producing the land itself nor the unimproved land value so overall liberty is actually enhanced.

[Gard]

Let me know if I'm missing something from your perspective on it...

Locke said (in his Proviso) private enclosure of the commons was only justified if there was "enough and as good left for others".

the extent that the proviso is violated is reflected monetarily in the amount of economic rent the site will command and measures how much the excluded are economically disadvantaged by the enclosure to what we all have an inalienable, INDIVIDUAL equal access right to.

the sales price of land is simply uncollected economic rent...in a perfect Lockean world there would be no sale price for land because it would not mattter where you located, no one would be economically disadvantaged if all the economic rent were directly predistributed (in equal amounts) to the citizens within the taxing authority.

Hi... the trouble with Locke's Proviso is twofold. First, it is a non-starter, because he does not define his terms. He does not say what is "enough", and he does not define what is "good" land to be left to others. His is a tautology, because such terms can only be defined subjectively, excluding any objective valuation of the supposed commons. His remarks inevitably lead one back to the need for some kind of market process, whereby the multitudinous subjective valuations of the uses and needs for land can be exercised through competition for recourses. While Locke's political tracts are valuable, they fell short on economic terms. The French Physiocrats began exploring this in the 18th Century, and did a remarkable job realizing that in inter-personal relations, it was inevitable that prices and rents would be applied to anything holding value to people. Even if one were to try to keep land in a "common state" it would be impossible because of the various interests of people. It is either going to be held by government, under the auspices of "the commons", and thus will be subject to all the stresses and debates over the many uses to which many people want it to be put, or it will be allowed to be held privately, and will reflect its value through the market mechanism. Locke tenaciously held to a philosophical non-starter, even if one were to remove the economic point of view. If, as he believed, the application of one's God given abilities to his labor invested it with value and brought it in line to being one's property, then how does one separate physical items from the abstract? Land, water, metals, wood, grass to feed animals, produce, the tools which are used to make other items, all derive themselves from an origin in the land, perse. To negate ownership concepts in land itself is to negate the idea of ownership of any commodity or item that is derived from that land -- ie, everything physical. To negate ownership of land would also negate the ability to utilize one's mind when applying his skills to the land. This would mean a negation of the very God-given abilities Locke believed we had a right to exercise. Hence, a tautology.

Now, the other issue to explore is the fact that under a "commons" paradigm, rents cannot be determined. If rents cannot be applied to land, in other words, if present and future values cannot be determined, then there can be no use for the land that works in conjunction with improving the lives of those involved in the market. All calculation processes are halted, and economic productivity is stifled. Lives are hurt, and society does not develop.

Locke's belief in the commons, as based on his transition out of the "State of Nature", is incompatable with human nature. Ahh, if only he'd met Frederic Bastiat!

where economic rent appears under sarcity conditions, if the excluded are forced to pay it to the landowner then the rights to the fruits of the tenant's labor & self-ownership are sacrificed and overall liberty suffers whereas if the landowner pays it he doesn't contribute any labor to producing the land itself nor the unimproved land value so overall liberty is actually enhanced.

Sorry, in the above, I did not intend to make it appear as if my comments were part of the quote. Just getting used to the posting system here...