There's a significant edge case which inspired California citizens to vote for a ballot initiative to sharply limit property taxes and thereby fubar the state budget forever.
Say you have a little old lady living in a small cottage she and her husband bought for a song in 1965. Since then, the value of land in her neighborhood has soared, but her pension hasn't changed, so she cannot afford the taxes on her house. Sure, she could sell that house and move, but uprooting her like that isn't so good: it disrupts her and the community.
But I can think of ways to address that. You could make a rule that says that if you own a single plot of land, and you live there, then you can defer taxation on increases in its value beyond the growth in the consumer price index, and pay those taxes at the later time when the property is sold. Or something like that.
There's also taxes I like as tools of policy, primarily in order to make costs visible in the market that otherwise would be negative externalities: taxes in carbon, tobacco, sugar, et cetera. But it would be nice to set these taxes at levels that meet our policy needs, rather than to meet our revenue needs.
Plus I still like progressive income tax, though it sure would be nice to tax folks only on their income above about $60k ...
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Date: 2008-07-15 02:56 pm (UTC)Say you have a little old lady living in a small cottage she and her husband bought for a song in 1965. Since then, the value of land in her neighborhood has soared, but her pension hasn't changed, so she cannot afford the taxes on her house. Sure, she could sell that house and move, but uprooting her like that isn't so good: it disrupts her and the community.
But I can think of ways to address that. You could make a rule that says that if you own a single plot of land, and you live there, then you can defer taxation on increases in its value beyond the growth in the consumer price index, and pay those taxes at the later time when the property is sold. Or something like that.
There's also taxes I like as tools of policy, primarily in order to make costs visible in the market that otherwise would be negative externalities: taxes in carbon, tobacco, sugar, et cetera. But it would be nice to set these taxes at levels that meet our policy needs, rather than to meet our revenue needs.
Plus I still like progressive income tax, though it sure would be nice to tax folks only on their income above about $60k ...