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It’s not a very fair system if only certain participants can afford to avoid taxes. If these schemes were doable for most folks and not only the very rich then

It’s not a very fair system if only certain participants can afford to avoid taxes. If these schemes were doable for most folks and not only the very rich then no one would have an issue with the system (assuming that it provided enough revenue).

andromeduck 3y ago
This is why we should just tax the land - ya can't hide land.
- SketchySeaBeast 3y ago
  In that case wouldn't these companies go remote and keep just a PO box around?
  - andromeduck 3y ago
    Then they'll be taxed where they end up but ultimately they'll stay because of the services and talent attracted to the services that tax revenue affords.
- notahacker 3y ago
  Pretty easy for the 0.1% to avoid owning much domestic land though, unless their wealth comes mainly from real estate or primary resource extraction...
  - xiphias2 3y ago
    So what? If they own property that doesn't have anything to do with the country, it doesn't need maintaining roads and infrastructure (which is the tax is for in theory). Real estate property based taxation has a long history of supporters as the most fair tax there is.
    - kyralis 3y ago
      Wat? Only a small portion of services are related to land. Property tax is in fact usually considered quite regressive and hardly "the most fair tax there is."
      - friend_and_foe 3y ago
        The two biggest expenses, territorial defense and domestic infrastructure, are directly related to land. The other two big ones, administration of justice (courts) and protection of international commerce (navy) either are closely enough connected to land property or have their own revenue generation mechanisms.
      - astrange 3y ago
        LVT is the optimal tax (no deadweight loss). Property tax has issues because it taxes improvements, but we probably want improvements. Both of them are very unpopular with the people who have to pay them, because they force you to find productivity increases and you might be a retiree. Or just a landlord who refuses to develop an empty lot in the middle of a city.
    - kazinator 3y ago
      I feel the argument has gone cirular. People earn an income and keep wealth. The remark was made that those can be hidden, and the rich are good at that. Someone proposes that land be taxed: "ya can't hide land". But no, that won't work, because people can get foreign land. Oh, but that's okay because foreign land doesn't consume local resources like roads and infrastructure. So ... it's okay to hide your income into foreign land. Wait, what were we talking about?
- dsfyu404ed 3y ago
  If it were that easy they'd do it. You make more money with a bunch of nickle and dime taxes. 20% to the feds, 10% to the state. 5% sales, 1% property, a litany of $10-1000 fees for interacting with government, etc, etc than you do with a single big tax that is easy to rally against even if the nickle and dime solution is lossy.
  - astrange 3y ago
    You make the most revenue with a giant VAT like Europe has. After that it's income/payroll tax probably.
- oceanplexian 3y ago
  What about land that’s owned by a trust in another country? Land is extremely easy and reliable way to hide money, that’s why wealthy Chinese are so well known for buying up property in the US and Canada.
  - rexpop 3y ago
    What is the point of the Westphalian Nation-state if land within its borders can be owned in trust by foreign nation[al]s?
    - toyg 3y ago
      That's why the Westphalian nation-state is in a state of permanent crisis: unbridled globalization broke it.
  - nkurz 3y ago
    The land records are held by a local authority who charges a taxes on the land. If the taxes aren't being paid, the land is sold at auction, and the new owner is responsible for the back taxes. Even if you don't always know exactly who is behind a given trust, you can always collect the taxes or reclaim the land. The wealth may be hidden from the Chinese government, and the local authority may not be certain who the owner actually is, but tax evasion is avoided.
    - deleted 3y ago
      [deleted]
- cafed00d 3y ago
  Does that incentivize not buying land? I wonder if people will just prefer subscribing to everything with a long term bundle. I mean, rent and rent-like situations Only the big, powerful, faceless individuals — corporations — will own land. Is this plausible? I’m just winging it here :)
  - BirdieNZ 3y ago
    It's the opposite; it increases the percentage of owner occupiers. It reduces landlord/renters; see for example https://gameofrent.com/content/can-lvt-be-passed-on-to-tenants https://gameofrent.com/content/can-lvt-be-passed-on-to-tenan... or https://www.prosper.org.au/wp-content/uploads/2020/10/Prosper-Australia_The-Second-Interval.pdf https://www.prosper.org.au/wp-content/uploads/2020/10/Prospe... Most proposals for land value tax are also revenue neutral, so you essentially pay rent to society/government for the land you use, but keep more of your income.
kazinator 3y ago
In fact, the people who avoid the most tax (as a fraction of their income) are the bottom earners.

andromeduck 3y ago

This is why we should just tax the land - ya can't hide land.

SketchySeaBeast 3y ago
In that case wouldn't these companies go remote and keep just a PO box around?
- andromeduck 3y ago
  Then they'll be taxed where they end up but ultimately they'll stay because of the services and talent attracted to the services that tax revenue affords.
notahacker 3y ago
Pretty easy for the 0.1% to avoid owning much domestic land though, unless their wealth comes mainly from real estate or primary resource extraction...
- xiphias2 3y ago
  So what? If they own property that doesn't have anything to do with the country, it doesn't need maintaining roads and infrastructure (which is the tax is for in theory). Real estate property based taxation has a long history of supporters as the most fair tax there is.
  - kyralis 3y ago
    Wat? Only a small portion of services are related to land. Property tax is in fact usually considered quite regressive and hardly "the most fair tax there is."
    - friend_and_foe 3y ago
      The two biggest expenses, territorial defense and domestic infrastructure, are directly related to land. The other two big ones, administration of justice (courts) and protection of international commerce (navy) either are closely enough connected to land property or have their own revenue generation mechanisms.
    - astrange 3y ago
      LVT is the optimal tax (no deadweight loss). Property tax has issues because it taxes improvements, but we probably want improvements. Both of them are very unpopular with the people who have to pay them, because they force you to find productivity increases and you might be a retiree. Or just a landlord who refuses to develop an empty lot in the middle of a city.
  - kazinator 3y ago
    I feel the argument has gone cirular. People earn an income and keep wealth. The remark was made that those can be hidden, and the rich are good at that. Someone proposes that land be taxed: "ya can't hide land". But no, that won't work, because people can get foreign land. Oh, but that's okay because foreign land doesn't consume local resources like roads and infrastructure. So ... it's okay to hide your income into foreign land. Wait, what were we talking about?
dsfyu404ed 3y ago
If it were that easy they'd do it. You make more money with a bunch of nickle and dime taxes. 20% to the feds, 10% to the state. 5% sales, 1% property, a litany of $10-1000 fees for interacting with government, etc, etc than you do with a single big tax that is easy to rally against even if the nickle and dime solution is lossy.
- astrange 3y ago
  You make the most revenue with a giant VAT like Europe has. After that it's income/payroll tax probably.
oceanplexian 3y ago
What about land that’s owned by a trust in another country? Land is extremely easy and reliable way to hide money, that’s why wealthy Chinese are so well known for buying up property in the US and Canada.
- rexpop 3y ago
  What is the point of the Westphalian Nation-state if land within its borders can be owned in trust by foreign nation[al]s?
  - toyg 3y ago
    That's why the Westphalian nation-state is in a state of permanent crisis: unbridled globalization broke it.
- nkurz 3y ago
  The land records are held by a local authority who charges a taxes on the land. If the taxes aren't being paid, the land is sold at auction, and the new owner is responsible for the back taxes. Even if you don't always know exactly who is behind a given trust, you can always collect the taxes or reclaim the land. The wealth may be hidden from the Chinese government, and the local authority may not be certain who the owner actually is, but tax evasion is avoided.
  - deleted 3y ago
    [deleted]
cafed00d 3y ago
Does that incentivize not buying land? I wonder if people will just prefer subscribing to everything with a long term bundle. I mean, rent and rent-like situations Only the big, powerful, faceless individuals — corporations — will own land. Is this plausible? I’m just winging it here :)
- BirdieNZ 3y ago
  It's the opposite; it increases the percentage of owner occupiers. It reduces landlord/renters; see for example https://gameofrent.com/content/can-lvt-be-passed-on-to-tenants https://gameofrent.com/content/can-lvt-be-passed-on-to-tenan... or https://www.prosper.org.au/wp-content/uploads/2020/10/Prosper-Australia_The-Second-Interval.pdf https://www.prosper.org.au/wp-content/uploads/2020/10/Prospe... Most proposals for land value tax are also revenue neutral, so you essentially pay rent to society/government for the land you use, but keep more of your income.

kazinator 3y ago

In fact, the people who avoid the most tax (as a fraction of their income) are the bottom earners.