Property Tax Do you want to transfer money from rich to poor? Yes, tax wealth. Property tax causes minimal market distortion; therefore, it is much better than income tax—economic tax damage low productivity. If you live in a capitalist country, your income is equally yours. However, Bob's wealth may not be traceable to production. Bob may have inherited his wealth through slavery or genocide. The link between wealth and productivity is less than the link between income and productivity. Therefore, property taxes are discouraged from producing less than income tax. Property tax also has good reasons for increasing productivity.
Property rights are contracts that work well between an individual and a community. Part of the contract is that the community will protect personal property. Yes, if you are defending Bob's land, should you be well paid? Property tax and then the protection money we pay to local criminal gangs we call government. How much should society be paid to protect wealth? Natural pricing schemes will be equal to the value of a protected asset. Let's take a look at the problem. Property Tax As a Safe Harbor The year was somewhere in the 13th century. Kublai Khan invaded China. Farmers do not bother to fight. Why? Because all they have, their life, they can go with it as a refugee. The land belongs to homeowners anyway. So let the householder fight. The Sung governor saw this.
Therefore, the Sung court provided for the distribution of land to farmers. Now the farmers have something to die for, the land. However, it is better to be late. Also, that has angered the land that owns homeowners who switch to Mongol. There is the Sung dynasty, the most prosperous country in the world at that time. It says an overseas investor is investing $ 1 million in 2 countries each. The first 1 million go to, hmmm… Let's see…, in Somalia, where the money passes the local military authorities. The next 1 million goes to Singapore with its strict rules and compliance commitments. In which country is $ 1 million more profitable? In Singapore, it is. Now, let's say Singapore's tax revenue is 1% but gives a 16% return. It says Somalia has no property tax but has offered a 0% refund. Where do you want to invest your money?
Singapore… Ultimately, any country that can provide benefits to investors will encourage investors to invest in that country. Countries will compete with other countries to better protect investors. Well-off countries can afford higher taxes and continue to attract investors. Investors will still invest in that country even though the country pays less property tax. If government spending is not reduced, the rest can be given as a share to all citizens in equal equality for all. Karl Marx would love this. Am I a commie or anything? That will provide incentives for citizens worldwide to vote in favor of the free market, the private sector, or any other source of income. When countries are friendly to investors, the more money comes in the more benefits citizens will receive. Other special arrangements should be made to prevent citizens from abusing the system by simply making more children collect more benefits, but that is easier to resolve. Minor Market Distortion Return to our sample. It says you are equally poor. However, you are more active than your peers. Then you wouldn't have to pay higher taxes than your peers because you are equally poor. Therefore, property taxes do not punish the diligent as much as the income tax.
If you are rich, you can build factories rather than mills. You do not have to pay an additional fee for this. Therefore, you will pay the same amount of tax whether you are building factories or large houses. It takes the same amount of military power to protect the factory mansion. Now, why are the world's industries paying more taxes? It is less disgusting than income tax. Will you invest in a 30% income tax country or a 2% wealth tax country? Good to go. If you have a good business plan, property tax is better than income tax. A good business plan means a good return on your investment, which means higher productivity, income, or profit. However, if your business plan is lousy or you want to save your home money, that does not produce a return, income tax. Exchanging income tax into wealth tax will hurt the incentives for the best business plan. You will not be penalized for having a better business plan and more profit. Higher return on investment is better not only for investors but for everyone. When businesses collapse, those that fall first are usually the lowest profit on the line. Things are moving slowly, and those bad business plans will collapse. Income tax encourages all businesses to do the same.
Property tax does not penalize profits and, therefore will increase profits. If property taxes are made in exchange for income tax, good investors may prefer it and invest more. Bad investors that governments will eventually bailout with the help of the IMF can invest elsewhere. It's not going to Berserk. There are no people in any country, in their right mind, who can demand the greatest wealth tax. Why? Because too much property tax will drive investors away. Some countries may require significant economic tax, but only if they do their homework properly, such as maintaining safety and clear and consistent rules. Ultimately, there will be a better supply and demand relationship where all countries strive to provide better financial protection and better economic and financial growth at lower costs or taxes.
The citizens of those lands can combine the alternative, which will be called profit. When citizens think like stock owners, then politicians will think like CEOs.
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