this post was submitted on 08 Feb 2024
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Good solution is to tax land. The land value tax cannot be passed on to tenants, both in economic theory and in observed practice.
Plus, it's just a super good tax. Progressive, hard to evade, super efficient, incentivizes density and disincentivizes sprawl. It's so good that economists of all different ideologies agree, from free-market libertarians like Milton Friedman to New Keynesians and social democrats like Joseph Stiglitz.
We should be taxing land, not labor.
I completely agree. In my utopia there'd only be property tax and consumption tax (sales tax). Everything else is tax free.
Another alternative is transaction tax, but that's impossible to implement, even if everything seems to be pointing at governments going in that direction. All governments in Europe are trying to implement complete accountability for transactions, but I can assure you that if they tried to tax it, there'd be no transactions at all. Everything would bypass the concept of money itself and everyone would keep a private ledger.
It's a classic philosophical discussion about holistic (tax the land) vs reductionism (tax the transaction).
This will do the opposite of what you want. All of these policies disproportionately cause poor people to remain poor.
It's not intuitive and it sounds great till you realize that unless you tax wealth and income with a progressive rate well into the 90% at the highest levels.
People who are wealthy don't give a single shit about consumption tax. They also don't care about transaction taxes (unless it's progressive). A person with a million dollars doesn't care if milk costs 5 bucks or 6 bucks a gallon... But the person making the minimum wage absolutely cares.