The part about filing personal income taxes (at least in my country) that drives me absolutely bonkers is that if you get the amount you owe wrong, they’ll contact you and tell you you were wrong and how much you actually owe.

If you are able to calculate this then why the fuck am I filling out this form, just tell me how much I owe you and I will send it

Exactly! You do produce the value of your own wages, but you don’t produce the value of the land or natural resources in your possession. All of humanity ought to be the ones to benefit from the value of the land and earth’s natural splendor, not just a select few who staked their claims early.

That’s also why carbon tax (and other Pigouvian taxes) should be paired with Pigouvian tariffs. From the above-linked economists’ statement on carbon tax-and-dividend:

Global climate change is a serious problem calling for immediate national action. Guided by sound economic principles, we are united in the following policy recommendations.

I. A carbon tax offers the most cost-effective lever to reduce carbon emissions at the scale and speed that is necessary. By correcting a well-known market failure, a carbon tax will send a powerful price signal that harnesses the invisible hand of the marketplace to steer economic actors towards a low-carbon future.

II. A carbon tax should increase every year until emissions reductions goals are met and be revenue neutral to avoid debates over the size of government. A consistently rising carbon price will encourage technological innovation and large-scale infrastructure development. It will also accelerate the diffusion of carbon-efficient goods and services.

III. A sufficiently robust and gradually rising carbon tax will replace the need for various carbon regulations that are less efficient. Substituting a price signal for cumbersome regulations will promote economic growth and provide the regulatory certainty companies need for long- term investment in clean-energy alternatives.

IV. To prevent carbon leakage and to protect U.S. competitiveness, a border carbon adjustment system should be established. This system would enhance the competitiveness of American firms that are more energy-efficient than their global competitors. It would also create an incentive for other nations to adopt similar carbon pricing.

V. To maximize the fairness and political viability of a rising carbon tax, all the revenue should be returned directly to U.S. citizens through equal lump-sum rebates. The majority of American families, including the most vulnerable, will benefit financially by receiving more in “carbon dividends” than they pay in increased energy prices.

https://archive.is/TYVWT#selection-1911.5-1911.46

Iirc, the EU is currently trying to implement carbon tax-and-tariff.

Edit: And the beauty of land value taxes is they can’t be evaded, nor do they cause capital flight. If you want to sell your land to avoid taxes, you gotta find someone to buy it. Whoever buys it now owes the taxes. Plus, it’s impossible to do business in a country without directly or indirectly relying on land, so the tax is merely the cost of doing business within whatever country implements it.

Further, land value taxes tend to reduce the upfront sale price of land, as they make land ownership an obligation as well as an asset. Cheaper land makes it easier to start businesses. With an appropriate LVT, the sale price of land would approach zero, and it would be functionally equivalent to renting that land from society.

That’s what they SAY the reason is. The real reason is much more simple: politicians are (mostly legally) bribed by the only ones rich enough to do so: rich people, corporations and special interest groups.

It’s not a necessary evil to avoid Apple moving their profits to Ireland or wherever for more favorable terms (they do that anyway ), it’s just plain ol’ corruption.

Haven’t many companies moved their head office to Ireland to save on taxes anyway?

Thanks for the in-depth reply!

According to one of your comments, the LVT won’t be passed on to the renters, because the supply of land doesn’t change and the land owner is already charging the maximum price the market can bear. This would be true in theory, but we’re talking about an essential good here. Land is something people will eventually need, otherwise they’ll be homeless. This is also called an ‘inelastic’ product, because the demand for the product won’t change a lot if the prices change. The same applies for food; if a piece of bread costs $1, maybe there is a demand of 10 million in a country, and if the same piece of bread is suddenly $10,000, the demand stays the same, because people will starve without it.

This is actually what makes land special compared to almost every other good. The supply of land is perfectly inelastic, i.e., you cannot create nor destroy land, while the demand for land is merely regularly inelastic. If land prices are high, people can do things like move back in with their parents, move in with roommates, sell their car to not need to pay for parking (parking takes up land), etc. Because the supply is perfectly inelastic and the demand not perfectly inelastic is why, in theory, land value taxes cannot be passed on to tenants. This is borne out in practice, as well. This site describes far better than I can about the empirical evidence for this: https://www.gameofrent.com/content/can-lvt-be-passed-on-to-tenants.

In the original post, you say that you want to tax unproductive ways of earning money (such as owning land). What about financial securities? Things such as shares (as long as they’re not bought from the company directly), bonds, stock dividends, etc. Maybe also tax stock buybacks, as they’re often (ab)used to create artificial scarcity and increase the stock value (aka increasing profits for shareholders).

I’d be hesitant towards some of these because capital investments are still productive. One example of a capital investment is my education. My degrees cost quite a bit of time and money and opportunity cost, and the higher wages I now earn because of my higher labor productivity are the reward for spending time and money and forgoing income investing in my own education. As a general principle, I think people ought to either be doing productive labor themselves, or at least investing their money into generating new wealth. I’d rather see investments in factories and education than in land speculation. My inclination would generally be to tax land, externalities, and severance first, and then see if more is necessary beyond that. Part of why is, as Stiglitz showed, LVT is the only tax necessary to fund all government expenditures, and LVT is a uniquely elegant tax: it’s basically impossible to evade, remarkably easy to calculate and administer, and requires only tracking who owns what land (something we already do) as opposed to tracking every single individual’s private financials (much more complex and invasive, imo). However, I’d be open to any individual tax that one could show would target speculation/rent-seeking and would have more benefits to society than costs to implement.

with ‘negative externalities’ do you mean everything that has a negative external impact? Obviously carbon emission is an example, but what about something like smoking? When people smoke, they have a higher chance of getting lung cancer, therefore putting a higher burden on our healthcare system and additionally potentially negatively influencing others who have accidentally inhaled the smoke caused by the smoker. Would you tax this?

In a perfect world, yes, all externalities would be taxed, but practically it would be incredibly hard to tax all. Like I’m sure the engagement-driven algorithms of most mainstream social media have some bad externalities, but those are extremely hard to quantify and tax without having unintended side effect. Carbon is easier to quantify and tax, however, Same with nitrogen fertilizers (nitrogen pollution), PFAS pollutants, plastic pollution, etc. Regarding addictive behaviors/substances like tobacco and sugar, I probably would want a Pigouvian tax on them. However, the addictive nature of them means that more complex policy would likely be necessary to actually dissuade smoking. An added sugars tax might be a good way to combat the epidemic of adding sugars (in all their forms) to anything and everything. Part of the reason manufacturers add them is because they’re a dirt cheap way to easily make junk food taste better to the average person.

Would you also tax owners of cars that use petrol / diesel instead of electricity? They also produce carbon emissions. A negative thing is that logistics can become very expensive with such a tax and additionally lots of people use the car to do something productive (such as going to work or school), in which case their productivity is kind of taxed, because their productivity is producing co2 emissions.

Yes, this would be borne out in significantly higher prices paid at the pump for their fuel. It would, however, incentivize people to find more carbon-efficient ways to live their lives. Car-dependent suburban sprawl is both environmentally and fiscally unsustainable as it is, and our economy would be improved by using more micromobility, walking, and transit. Of course, a big part of enabling this would be by abolishing restrictive zoning and parking minimums. At least in North America, it’s literally illegal to build dense, walkable, mixed-use neighborhoods on the vast majority of urban land, and nearly every single city has outdated, pseudoscientific parking minimum laws that dictate arbitrary minimum amounts of parking for businesses and housing. If we simply made it actually legal to make denser communities, people simply wouldn’t need an expensive, polluting car and tons of city real estate wasted on car storage just to do things like get groceries or go to school/work. Also considering the average annual cost of car ownership (including depreciation) is something like $10k, car-dependency creates a huge barrier to entry for people trying to access good jobs and schools to escape poverty.

Getting rid of income taxes obviously increases the amount of money people can spend, which will probably increase the demand for goods. When demand increases, but the supply doesn’t, there will be a higher inflation, which will negatively impact people who have less money (or are dependent on government welfare and are unemployed).

Yes, but it depends on the goods. Land value taxes (and lifting onerous land use regulations like parking minimums and exclusionary zoning) have been shown to reduce stabilize and reduce housing costs. LVT by incentivizing more development and cooling speculative pressure on land prices and the others by allowing more supply to be, well, supplied. Reducing land prices can vastly reduce the barriers to entry for many businesses, who could help increase overall supply in other sectors of the economy. Plus, if overall purchasing power goes up, who’s to say supply for ordinary goods won’t go up as well? In the short term there may be an adjustment period, but it’s not like I’d recommend switching to all LVT, no income taxes overnight; I’d want a phase-in period to give society time to adjust and plan around the coming changes.

Now that I have typed all of this, I feel like a lot of these points can be solved by government spending (for example, provide people with free public transport, so they no longer have to use the car to get to work, increase the unemployment benefits based on the inflation index), but I’m still commenting this lol

I agree completely. I (and many people of the same ideology re: LVT as me, aka Georgists) also support a citizen’s dividend/UBI. Basically the money the government collects from LVT, externality taxes, and severance taxes should go back into society in the form of just straight cash, infrastructure and public goods, and subsidizing positive externalities such as education and public research and rewilding/conservation and so forth.

But yeah, overall my view is a combination of pragmatism and idealism. Sure it’s nice to strive for the ideal, but we want to at least get as close as possible via pragmatic, economically grounded policies. And I just think it’s neat that a lot of these policies (such as LVT) can simultaneously reduce inequality and increase prosperity and reduce wastage.

Edit: spelling

Thankfully, that’s not quite how tax incidence works.

For land value taxes, both in theory and in practice, LVT cannot be passed on to tenants.

For Pigouvian taxes (e.g., carbon tax), yeah, that’s actually part of the point. It shouldn’t be so dang cheap to pollute the planet. If it’s artificially cheap to pollute and waste and destroy, neither you nor businesses have incentive to clean up your act except out of pure good will. And unfortunately good will alone cannot be counted on to protect the planet and the victims of negative externalities from a perverse profit incentive.

For severance taxes, well, the Norwegian model shows that subsidizing exploration and taxing exploitation increases competition, increases supply, and increases overall prosperity in society. The high (and risky!) costs of exploration act as a huge barrier to entry for smaller competitors, ultimately resulting in monopolistic competition, high rent-seeking, and half-assed exploitation. Why bother developing efficient exploitation techniques if you can coast on unearned monopolistic profits?

Dear God no

She is working hard and gets bruises from the exploitative capitalist work environment that mandates 40+ hour work weeks for pittance in return. And also has to repeatedly lift boxes up to 50 lbs per the job description and some of the box corners poke into her which hurt when lifting things.