So, taxes. No one likes them. Even me. All taxes do, inherently reduce freedom. All of them do, in different ways, change incentives. All taxes in excess can be crushing on peoples' lives. However, to fund the programs and stuff we need, we need taxes. So, what are what I consider to be the ideal forms of taxation and why? Well, that's what we're going to be looking at. Ideally, whatever tax scheme I rely on will conform to my indepentarian/real libertarian principles. That said, let's get to it.
Income taxes- Income taxes are close to my ideal. Given everyone has a UBI, it would be easy to tax all income above the UBI and subject it to taxes. This would tax people in proportion to what they have and never ensure that people are taxed unjustly. After all, the tax burden scales with the amount of income. The more you earn, the more you pay. This ensures the poor are largely left alone and not burdened with excessive taxation, but also ensures that those with the most money and most ability to pay, pay the most. Income taxes are also able to raise tons of revenue, like, trillions. The only real burden associated with them comes from filing a tax return, which could be made easier if we really wanted to. I largely support simplifying the tax code. As far as the question of flat vs progressive taxation, well, without UBI, progressive taxation all the way. The poor should pay very little of their income in taxes and the rich should pay a lot. However, with a basic income I am okay with a flatter structure. It serves as a negative income tax and most of the tax burden is aimed at the top 20-40% of the population depending on the exact conditions.
Payroll taxes- Payroll taxes are basically income taxes, but the taxes are deducted automatically from a paycheck. This is the most optimal form of taxation in my opinion as it imposes the smallest possible burden on people, while drawing in the revenue. The downside is that payroll works better with a flat tax structure, which is okay in my book, because flat tax structures work well with UBI, healthcare, etc. You dont really NEED a progressive structure with a UBI. The UBI refunds the burden on most people who should pay a lower rate in the first place. However, the downside with payroll taxes is they do not necessarily tax people with alternate types of income like capital gains. So they tend to be somewhat regressive. Still, assuming payroll taxes are complemented with income taxes on people payroll taxes don't apply to, this is okay in my book.
Consumption taxes- Consumption taxes are interesting. Much like income taxes, they're a broad based type of taxation that is capable of drawing in tons of revenue. Moreover, taxation of this sort is relatively painless. Because people pay the tax as they spend money, they tend to pay as they go. Prices are slightly higher, but it's worth it if everyone gets a UBI. However, the fact that prices are higher is a problem. If you get a $12000 UBI with a 10% VAT like Yang wanted (math doesnt add up, should be 20%), your UBI isnt worth $12000 in practice. It's worth $10800 in spending power. If we had a revenue neutral UBI, it would be $9600. So that's not good. To get an effective $12000 in spending power, we would need to offer a $15000 UBI. And that might mean we want a 25% tax instead. But if we had a 25% tax, then that $15000 UBI wouldnt be worth $12000 any more, but $11250. See the problem? To get the actual spending power of the amount you want to raise, you might need to have like a 33% VAT, with $16000 in UBI being worth $12000. And that would be imposed on everyone, devaluing all money by 25%. This is likely a heavier burden than income or payroll taxation would be. At least with income and payroll, $12000 in UBI is worth $12000 in UBI. You don't need to tax higher too compensate. This isn't to say consumption taxes are necessarily bad, I know they are regressive as rich people tend to spend less of their money and invest it, but they are a viable way to raise a lot of money. I just see it as a less than ideal approach to funding UBI. I know Yang, in his proposal, tried to compensate for the spiral of value of UBI vs the tax rate to fund said UBI by excluding necessities, but that just makes the revenue less, leading to budget deficits or lower UBI levels in the first place. It's just not ideal.
Land/property taxes- Georgists love this kind of taxation, and I can see the "justice" in it, but their ideology isn't my ideology. The fact is, taxing property like land and homes is a tax on existence. Everyone exists in 3d space, and if the space you occupy is taxed, you're taxed for existing. You're basically coerced to work to pay this tax, and I see it as unjust. It's like a debt for being alive. I can see why local government use this form of taxation as it's the only form just about that's unavoidable, but I wouldn't want to fund large programs like a UBI with it. Even if UBI is funded with it, UBI simply becomes a refund for this massive tax. It diminishes the ability of UBI to allow people to stop working, and as such is not libertarian. Also, I want to cite something from my UBI funding plan, but I do tax landlord profits. I want to make that clear. And it's not a huge funding source. I think all rental income is like $800 billion a year, and what amounts to profits is like $200something billion? That's nothing. If the core problem with the whole landlord thing is the fact that they're exploiting poor renters and therefore we need to tax land owners to give everyone a UBI, well, we should be raising more money. Most LVT at the high levels georgists support taxing people at does not come from landlord profits. I mean, all land is worth like $21 trillion or something, and landlord profits is only $250ish billion? So why are we taxing the other $20.75 trillion? My income tax has that covered it does so without screwing over homeowners. This is why I dig georgists so hard. They're such ideologues and their ideas are so out of touch with reality. And if we tax the banks who own the mortgages, sure, we could do that, and maybe it would encourage them to sell homes more cheaply and not hold onto massive amounts of land, but last I looked they don't make tons of profits either. Their profit is like 1%. The reason they make so much money is they're flipping so many properties to begin with. The housing market is just screwed. The housing supply does not necessarily meet demand. THat's the problem. We need to incentivize more home creation and subsidize the maintenance of unoccupied homes so they don't fall into disrepair in order to keep the housing supply high. We don't solve this problem with a massive tax on existence. So no, outside of perhaps a wealth type LVT aimed at excessive ownership of property, I don't support an LVT. At minimum I don't support a broad based LVT to fund UBI like georgists seem to want.
Wealth tax- Wealth tax is a good idea, but it is a bit tricky. Most wealth taxes only target people with millions and billions in wealth, not your average Joe. Basically, it's a lot like what I argued for LVT. It's fine if it hits the ultra rich hoarding stuff, but not the average person. However, owning lots of wealth does not necessarily translate to having the liquidity to pay the tax, so that's a potential issue, and it can't draw tons of revenue. Here's the thing about "taxing the rich." It's a super popular idea among progressives, but you actually aren't going to get trillions upon trillions from doing so. There's so many ways they hide their wealth and dodge taxes, and in practice you might only get a few hundred billion from doing so. Which is how Biden can pull off "taxing the rich" without taxing those upper class surburbanites he is trying to pander to. He doesn't want to fund a significant amount of progressive stuff, so he doesn't have problem with taxing the rich to pay for his programs. If you want say, UBI or medicare for all, you need to tax people in a broader way, such as the above forms of taxation.
Corporate tax- Similar to wealth tax. I see it as just, but it's easy to dodge and doesn't raise tons and tons of revenue. Enough to fund several smaller programs, but not enough to fund large scale proposals on its own. I'm all for taxing the rich, it just isn't always the best strategic decision to raise tons of revenue. There's a reason I go for broad based taxes with large programs but then with smaller ones I'm like "you can raise $200 billion by taxing the rich in this way!
Financial transactions tax- It's just but rarely brings in good amounts of revenue. Discourages a lot of microtrading on wall street and sometimes can bring in very little revenue as a result.
Excise taxes- I tend to have somewhat of an issue with these in the sense that they often tax a thing, in order to discourage you from buying said thing. Like alcohol, cigarettes, soda, etc. However, I do believe they are just if used to fund healthcare. If the government is paying for healthcare and bad habits cause higher demand for healthcare, it makes sense to tax such things to discourage their use, in order to encourage people to be healthier. And if people decide to do it anyway, they help fund the costs of their lifestyles. That's fair.
Carbon/pigovian taxes- Can be fine in moderation but I would not rely on them to be massive revenue generators either.
All in all, I do think taxes on the rich are the most just forms of taxation, but at the same time, I also believe that they are also some of the most difficult to enforce, and often are not reliable revenue producers, as least as far as large scale programs go, such as a UBI. That said, broad based taxes are the best. Of those, I prefer income/payroll taxes. They scale with the ability to pay and they don't impose a burden that inherently threatens the indepentarian right to say no. Consumption taxes are almost as good ideologically, I just see them as highly inefficient at funding a UBI. LVT/property taxes are not desireable and don't even seem to solve the biggest issues with exploitation georgists complain about, if anything they make them worse while conflicting with my indepentarian ideology. That said, that's why I support income/payroll taxes for large programs like UBI and healthcare along side other types of taxes on the rich for smaller programs. There's a method behind the madness.
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