[PEN-L:4843] Asset tax

["Dale Wharton" <dale@xxxxxxxxxxxx>]

The following appeared on the Usenet.
--                                         _
Dale Wharton  dale@xxxxxxxxxxxx  M O N T R E A L  Te souviens-tu?

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From:       Roy_Langston@xxxxxxxxxxxxxx (Roy Langston)
Newsgroups: alt.politics.economics
Subject:    Replace income tax with asset tax
Date:       Wed, 26 Apr 1995 07:42:17 -0800

[ omitted--list of defects in income tax and national sales tax ]

A flat personal and corporate asset tax of less than *3%* would
be enough to totally replace all revenues currently raised by the
personal income and corporate profits taxes. Over 90% of all
people would pay less tax than under the current system -- in
most cases *far* less. Who would pay more? The idle (i.e.,
unproductive) rich and large but unproductive corporations.

Sound too good to be true? Well wait, it gets even better:

1. Changing to asset taxation would tilt the economy in favour of
labour-intensive rather than capital-intensive industries,
slashing unemployment.

2. Assets are much more difficult to hide than income, so wealthy
individuals and corporations would be unable to dodge the tax.
They would have to return to honest accounting: indeed, it would
be to their benefit to do so.

3. To avoid losing ground to the tax, asset owners would have to
either use their assets as productively as possible, or sell them
to someone who would. Result? Much more mobile capital, lower
unemployment, higher (after-tax) wages, and a permanent,
continuous economic boom.

4. One of the most important benefits of a market economy is that
assets tend to move into the most productive hands, increasing
production. The asset tax would *accelerate* this process.

5. Asset owners get a very great benefit from government --
protection of their property rights -- for which they currently
do not pay. The asset tax would be a very fair and fundamentally
*voluntary* user-pay, value-for-value transaction: you pay the
tax, and government protects your property rights. If you don't
want to pay the tax, fine; someone else can take your property
and the government will not lift a finger. If the thief pays the
asset tax, government will recognize *his* right, not yours.
Collection of the asset tax would therefore be no problem
whatever. The moral superiority of such a fair and voluntary tax
system should be clear.

There is more, of course, but this should be enough to stimulate
some thought about asset tax vs. income tax vs. sales tax. I
welcome feedback on this idea, but should issue one warning:
others (including PhDs in economics) have criticized this
proposal without thinking deeply enough about its implications,
and have consequently been publicly humiliated when I easily
refuted their arguments and demonstrated their (occasionally
hilarious) wrongheadedness and superficiality.

Don't let it happen to you :-)

-- Roy Langston <Roy_Langston@xxxxxxxxxxxxxx>