08-12-2010, 05:02 AM
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Beer Money Baron
Industry Role:
Join Date: Jan 2001
Location: brujah / gmail
Posts: 22,157
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Interesting reply on that article about Henry George, and LVT.
Quote:
There is a better formula for taxation. There is a method of taxation that is simple to define, easy to enforce, and is both pro-growth and progressive.
19th century economist Henry George proposed what he called the "single tax", also known as the land value tax (LVT).
Essentially, there would be no income or sales tax, only a tax on land values (land only, not buildings, as with a "property" tax).
Simple to define and enforce: The tax would be x percent of the assesed land value, no exceptions. You can try to hide income, but you can't hide land.
Progressive and pro-growth: The wealthy are disproportionate owners of high priced real estate and would pay the lion's share of the taxes, but the marginal tax on both income and consumption would be zero - a win-win for liberals and conservatives.
The philosophy: George believed that what you earn from your skill, profession or business belongs to you, 100%. But the part of your wealth that derives from the value of your land is due to the economic activity of the surrounding community (location, location, location) and is therefore fair game for taxation to support that community. Making money from the passive ownership of land is the true definition of "unearned income". If you build a farm, factory or store on that land, the earnings from that enterprise represent your efforts. But simply selling or collecting rent on the land requires no sweat or brains on your part.
Could LVT raise enough revenue? If my math is right, taxing all the privately held land in the US at an average of ten cents per square foot (obviously would be higher in Manhattan, NY, lower in Manhattan, KS) would yield about six trillion dollars.
Sends a sensible economic message: You make money by providing useful products and services, not by wheeling and dealing in real estate.
Google "Henry George"; more info than I can do justice to in this short post.
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