Reply #17: The L Curve [View All]

[dcfirefighter]

applies to wealth, particularly land wealth, more so than incomes.

Don't get me wrong, i'm not advocating a complete shift tomorrow, but a gradual shift, as would be required in any democracy.

Step 1: shift property tax from buildings to land. In most cases (60%?) residential properties benefit. In even more cases, homeowners benefit. Commercial properties, being worth more, get taxed more. Most businesses lease their sites anyway, for them nothing changes. The landowner just gets less unearned income.

Step 2: Eliminate sales taxes, and shift their revenue to land. High value commercial & retail locations become even more valuable, and revenue increases.

Step 3: Increase the personal income deduction, and shift their revenue to land.

Under a land value tax, businesses pay exactly their fair share.
Employment increases, because land speculators can no longer guarantee returns on underbuilt land - they must develop, providing more jobs. As employment increases, potential employees become scares, and employers must offer better wages to attract them.

I agree on taxing capital gains - this is the last 'tax on productivity' I'd eliminate. The whole idea of a land value tax is that it is a tax on unearned capital gains, with no deadweight loss, and no disincentive to productivity (i.e. employement and commerce)

PS Re: municipal unions vs. industrial unions. It's tough to move the municipal operation overseas, unlike industrial occupations. Get the taxes off of wages and benefits are twofold: immediately, workers keep more of their paycheck; and as the price of employment drops (due to the elimination of taxes on the sale price of labor) employment rises. As employment rises, so do wages. All this without a single contract negotiation.

I think you know that HG was popular with the unions back in the day.