What is the most economic system of taxation?

Economics Economics Questions
21

Suppose that England had retained Normandy and guaranteed the exact same protection at the cost of an income tax. The residents of Normandy would have no reason to move to England in order to be safer, as the taxes from England would be used to pay for the permanent defensive army in Normandy, equalizing the risk to property in both countries. The people of Normandy should have to pay higher tax rates in order to encourage them to move their property from Normandy to England, where it is naturally safer.

One would have to declare this even under free market protection in order to purchase the coverage for it.

22

Property taxes produce a substitution effect because the supply of property is elastic, at least in the long run. In other words, increasing the value of your home leads to a higher tax so, to some extent, a property tax punishes those who increase the value of their property. A land tax, on the other hand, is harder to avoid because the supply of land cannot be changed (with some exceptions). This would encourage people to group together more than they otherwise would, however, and thus still produces a deviation from the voluntary market outcome in addition to the reduction of income.

The most efficient tax would be a lump sum poll tax. Anyone who wants to vote would have to pay a set fee, just as on the market you have to pay a set price for any good or service. Bill Gates does not have to pay $1000 dollars for a movie ticket while the rest of us pay $10. Rather, through arbitrage and competition, there is a strong tendency for goods to be priced the same throughout the market. It would mimic the market therefore, to set a single price for government, so to speak. Now, this would set a strict limit on the size of the government budget because the size of the fee could not be too large–otherwise no one would choose to vote and no funds would be raised at all. The small amount of money the government would raise could be used for a coast guard and some kind of institution like a national militia for national defense. And then private security companies can fight private crime.

I think making the tax compulsory–taxing existence and not just voting–would actually be less efficient because of enforcement costs. Taxing voting–or charging a price to vote–would be very easy to enforce.

23

The most economic system would be to tax the least productive people. As they become more productive, lower their tax rate.

Productivity would be determined by some sort of complex formula that I dont feel like coming up with at the moment, but it would be related to your net worth and you current income (It would consider mitigating circumstances like a person’s age, etc). This would motivate people to become more productive and those that are producing best will be freer to grow the economy. Prisoners would also be employed by this system.

24

I think I should have used another word besides ‘mitigating’. I mention age as a factor not because of some egalitarian bias, but because it’s being an economic factor. A younger person hasn’t had the time to produce and he needs to be given a moment to prove he’s productive. If this time is not accorded him, his productivity potential will be too impacted. After a short period of time in the market, his productivity can be assessed and if he is not being comparatively productive he will begin to see harsher taxes as time passes. Ultimately, if someone decides not to produce at all, they will be enslaved. However, this is to be avoided, so the tax burden will creep toward full enslavement in the hopes they’ll respond by being productive.

25

We all know there’s an immigration issue. Some want no immigrations (xenophobes). So want no distinction between immigrants and citizens (anarchists). Most fall somewhere in-between.

Here’s a policy that considers the ‘immigration problem’ and the ‘most economic system of taxation’.

Establish colonies w/i the U.S. The citizens in these colonies will not be allowed access to the U.S. proper except for emergency reasons. They can leave the colony and go back to where they came from, if they so choose, but if they wish to return they must pay the expenses. The first time to the colony is free, since we assume such colonists are impoverished, but once inside they will have access to work and they can use their wages to finance departures and arrivals.

This or these colonies would consist of people that are wanting to escape their own country. They are wanting to be an American citizen. The colonies would provide the immigrants a way to escape poverty. They would provide a source of income for the government because their wages would be heavily taxed.

If that sounds harsh, here’s the kicker. The immigration process will not be based on time spent in the colony. The process will be based upon payment. Once the immigrant has paid X amount, they will become a US citizen. They can also determine their own taxation level, up to a certain point. If they want to send money home or finance a departure-arrival scenario, they can choose a lower tax rate. If they want to hurry up and pay the immigration fee, they can be taxed 100%. Maybe don’t think of it as a tax, since it’s voluntary, ie they can stay in their own country. It’s money that will provide them a good or service, ie US citizenship.

The colonists will have access to the American economy. American businesses can solicit business from the colonists. Wages will be determined by the free market w/i each colony. These colonists will have market access to most of the US economy, so their wages should be quite reasonable.

If 10 million immigrants paid an average of $20,000/yr in taxes, that’s 200 billion/yr.

The justice in the colonies would be incentivized by the threat of fines and deportment. Colonists themselves would hold much sway in judgements. Especially violent crimes might call for more US involvement.

By allowing these immigrants to work for their citizenship, it will sift out the persons with lower moral character or work ethic. There might be smaller, additional immigration payment required if they want to bring family members that are not able to work, eg, elderly, young children.

America is probably the freest nation in the world. There are people dying to get here. There are people in abject poverty. The poverty can be immediately alleviated. The citizenship can be attained based upon what they actually do with the work provided. America’s business can have access to a larger market but this colonistic outsourcing would provide tax revenues, as opposed to international outsourcing.

Yea, some sick, twisted unintended outcome would probably come about from such a logistically challenging undertaking, but it’s an interesting idea. I esepcially like the idea of being able to buy citizenship and citizenship being voluntary/actively chosen.

26

I just want to make sure you guys know I’m simply trying to answer the question in its purest sense w/o consideration of morality, etc. It’s quite interesting what sort of evil you can uncover when you apply the principle of your current evil (coercion) to another construction.

27

Very interesting, though I’m sure it would be panned for it’s impracticality or utopian idealism in this limited form. What more have you written along these lines?

I am intensely interested, because I went down a rabbit hole with an anarcho-syndicalist-?? fellow I am friends with this morning on the subject of commons and taxation. This sort of thing seemed to fit one of his acceptable modes of taxation in the midst of the hysterics of the back and forth argument we were having.

How best to argue against a tax on labor to support the commons, with some folks, is quite difficult. He nearly argued that I owed back taxes to Pythagoras, philisophically.

28

That does not in any way link to what the government has to produce and the costs incurred to do so. It cannot be economic.

29

This stuff just popped in my head. I was thinking about insane new ways to answer the question w/o considering ethics, etc and made the post about taxing the unproductive. Then I happened to think about those not contributing anything - foreigners. Then I wondered how to get foreigners to agree to be taxed w/o slavery. I knew MANY foreigners would LOVE to be US citizens. So thats an incentive. I knew many of them were in abject poverty. That’s a motivator. So to me, it seemed like a win-win.

But even though the foreigners would be getting rescued from their dire circumstance by being given work and the ultimate reward of citizenship, people would clammer about the poor colonists being treated like slaves or 2nd class people. Nevermind that the colonies were these ‘slaves’ saving grace. If I was wandering around the wretched deserts of Africa, I’d give my left nut to join one of these colonies! But once you’re there, people see the ‘there’ and not the, ‘where you came from’. Since people would be so misguidedly outraged about the injustice of colonies, they’d end them and damn the Africans (or whomever) to wandering in the wretched deserts of Africa. Sure, the ideal is great, but you MUST deal w/ reality. What’s going to help the African and what’s the American’s going to agree to? Only thing beyond that is a continuation of abject poverty or an uprising by the ‘outraged’ to overthrow the borders so that the US no longer exists. So it’s basically either all-out war or continued abject poverty. My solution purports to resolve these issues for the here and the now.

In fact, colonies wouldn’t have to be on U.S. land. The U.S. could rent land from US territories or even nearby foreign countries. But doing so makes it a little messier. But I’m sure even if a colony went to Africa there’d be a thriving workforce that’d spring up. What the colony offers, both good and bad, needs to be made clear to those applying for colonialship (right word?) . This way they’re making a rational choice between their current conditions and what the colony promises. If they ever wish to leave the colony, they can do so.

You could simply sell citizenship outright, but I question whether current citizens would accept such. What kind of person is the citizenship buyer? Maybe buyers can be investigated. I know the colony situation would tend to be a VERY good qualifying process. And you know liberals (those pretending to love liberty, all the while confiscating our property via taxes) would raise a ruckus, insincerely of course. Also, the international community would not like it. But it’d be a mutual agreement between contracting parties. “I want to live in America.” “We want our government debt reduced.” They each must agree to the terms. So how would that me immoral? The only immorality is that the State exists, IN MY OPINION (I’m pretty sure that’s my opinion)! But I’m also a realist, making the best of it. You can’t wait until the world’s a perfect place.

30

I dont agree with my proposal, but can you restate your criticism? I’m not sure I understand it. Thanks! [:)]

31

I disagree, but not in the same way as Stranger. Anyone can estimate the cost for anything. Their estimate might not be very good, or it might be self-serving. Let’s assume I am a power-seeking government official. It would be in my best interest to generate a real or apparent need for my “security service” so as to justify increasing my cost estimate for protection and the tax rate needed to support it. Regardless of the supposed economy of the method, the government still has the ability to increase the tax rate to any level they desire. I think that the decentralization referred to in some previous posts is the method advocated by the framers of the Constitution.

My intention is not to defame you, but this sounds like something a modern Republican or our current President might say to justify an increase in our taxes. There is not a country on Earth, governed by the sane or insane, who can conceive of a successful invasion of the US. The ability of most nations to wage war has been aided either directly or indirectly by the US government, to generate the “real or apparent need” I mentioned above.