Let the rant begin:

I think it’s an absurd idea that things like labor are taxed at all (via income taxes), when labor is a productive activity. Meanwhile there are so many unproductive or outright harmful activities that don’t get taxed nearly enough! Land speculation, carbon emissions, other forms of pollution, monopolistic control of finite natural resources, etc.

Further, even from a solely economic point of view, taxing things discourages them and distorts the market. Taxing carbon is a known way to reduce carbon emissions. Why don’t we choose to distort the things we want to be distorted anyways, like pollution and rent-seeking behaviors?

Further, there is ample evidence to suggest we genuinely don’t need income taxes to fully fund our government. I (and many others) are in favor of 3 main types of taxes:

  1. Land value taxes
  2. Pigouvian (or externality) taxes
  3. Severance taxes

Land Value Taxes

A land value tax (LVT) is a levy on the value of land without regard to buildings, personal property and other improvements.[1] It is also known as a location value tax, a point valuation tax, a site valuation tax, split rate tax, or a site-value rating.

Land value taxes are generally favored by economists as they do not cause economic inefficiency, and reduce inequality.[2] A land value tax is a progressive tax, in that the tax burden falls on land owners, because land ownership is correlated with wealth and income.[3][4] The land value tax has been referred to as “the perfect tax” and the economic efficiency of a land value tax has been accepted since the eighteenth century.[1][5][6] Economists since Adam Smith and David Ricardo have advocated this tax because it does not hurt economic activity, and encourages development without subsidies.

LVT is associated with Henry George, whose ideology became known as Georgism. George argued that taxing the land value is most logical source of public revenue because the supply of land is fixed and because public infrastructure improvements would be reflected in (and thus paid for by) increased land values.[7]

https://en.wikipedia.org/wiki/Land_value_tax

In 1977, [Nobel prize-winning economist] Joseph Stiglitz showed that under certain conditions, beneficial investments in public goods will increase aggregate land rents by at least as much as the investments’ cost.[1] This proposition was dubbed the “Henry George theorem”, as it characterizes a situation where Henry George’s ‘single tax’ on land values, is not only efficient, it is also the only tax necessary to finance public expenditures.[2] Henry George had famously advocated for the replacement of all other taxes with a land value tax, arguing that as the location value of land was improved by public works, its economic rent was the most logical source of public revenue.[3]

Subsequent studies generalized the principle and found that the theorem holds even after relaxing assumptions.[4] Studies indicate that even existing land prices, which are depressed due to the existing burden of taxation on labor and investment, are great enough to replace taxes at all levels of government.[5][6][7]

Pigouvian Taxes

A Pigouvian tax (also spelled Pigovian tax) is a tax on any market activity that generates negative externalities (i.e., external costs incurred by the producer that are not included in the market price). The tax is normally set by the government to correct an undesirable or inefficient market outcome (a market failure) and does so by being set equal to the external marginal cost of the negative externalities. In the presence of negative externalities, social cost includes private cost and external cost caused by negative externalities. This means the social cost of a market activity is not covered by the private cost of the activity. In such a case, the market outcome is not efficient and may lead to over-consumption of the product.[1] Often-cited examples of negative externalities are environmental pollution and increased public healthcare costs associated with tobacco and sugary drink consumption.[2]

https://en.wikipedia.org/wiki/Pigouvian_tax

A carbon tax offers the most cost-effective lever to reduce carbon emissions at the scale and speed that is necessary. By correcting a well-known market failure, a carbon tax will send a powerful price signal that harnesses the invisible hand of the marketplace to steer economic actors towards a low-carbon future.

https://archive.is/TYVWT#selection-2043.3-2043.318

Severance Taxes

Severance taxes are taxes imposed on the removal of natural resources within a taxing jurisdiction. Severance taxes are most commonly imposed in oil producing states within the United States. Resources that typically incur severance taxes when extracted include oil, natural gas, coal, uranium, and timber. Some jurisdictions use other terms like gross production tax.

https://en.wikipedia.org/wiki/Severance_tax

The key to Norway’s success in oil exploitation has been the special regime of ownership rights which apply to extraction: the severance tax takes most of those rents, meaning that the people of Norway are the primary beneficiaries of the country’s petroleum wealth. Instead of privatizing the resource rents provided by access to oil, companies make their returns off of the extraction and transportation of the oil, incentivizing them to develop the most efficient technologies and processes rather than simply collecting the resource rents. Exploration and development is subsidized by the Norwegian government in order to maximize the amount of resource rents that can be taxed by the state, while also promoting a highly competitive environment free of the corruption and stagnation that afflicts state-controlled oil companies.

https://progressandpoverty.substack.com/p/norways-sovereign-wealth-fund

Inequality

Specifically, I suggest that much of the increase in inequality is associated with the growth in rents — including land and exploitation rents (e.g., arising from monopoly power and political influence).

https://academiccommons.columbia.edu/doi/10.7916/d8-t92w-f529

  • RagnarokOnline@reddthat.com
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    1 year ago

    Assuming the “We” you’re talking about is “The US government”, one of the big reasons a country like the US doesn’t punish bad behavior is competition.

    Just like companies compete for your business, nation states compete for companies that increase GDP. I believe the US is afraid that if they tax companies, those companies will choose to leave the US instead of simply cleaning up their bad behavior.

    • Fried_out_Kombi@lemmy.worldOP
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      1 year ago

      That’s also why carbon tax (and other Pigouvian taxes) should be paired with Pigouvian tariffs. From the above-linked economists’ statement on carbon tax-and-dividend:

      Global climate change is a serious problem calling for immediate national action. Guided by sound economic principles, we are united in the following policy recommendations.

      I. A carbon tax offers the most cost-effective lever to reduce carbon emissions at the scale and speed that is necessary. By correcting a well-known market failure, a carbon tax will send a powerful price signal that harnesses the invisible hand of the marketplace to steer economic actors towards a low-carbon future.

      II. A carbon tax should increase every year until emissions reductions goals are met and be revenue neutral to avoid debates over the size of government. A consistently rising carbon price will encourage technological innovation and large-scale infrastructure development. It will also accelerate the diffusion of carbon-efficient goods and services.

      III. A sufficiently robust and gradually rising carbon tax will replace the need for various carbon regulations that are less efficient. Substituting a price signal for cumbersome regulations will promote economic growth and provide the regulatory certainty companies need for long- term investment in clean-energy alternatives.

      IV. To prevent carbon leakage and to protect U.S. competitiveness, a border carbon adjustment system should be established. This system would enhance the competitiveness of American firms that are more energy-efficient than their global competitors. It would also create an incentive for other nations to adopt similar carbon pricing.

      V. To maximize the fairness and political viability of a rising carbon tax, all the revenue should be returned directly to U.S. citizens through equal lump-sum rebates. The majority of American families, including the most vulnerable, will benefit financially by receiving more in “carbon dividends” than they pay in increased energy prices.

      https://archive.is/TYVWT#selection-1911.5-1911.46

      Iirc, the EU is currently trying to implement carbon tax-and-tariff.

      Edit: And the beauty of land value taxes is they can’t be evaded, nor do they cause capital flight. If you want to sell your land to avoid taxes, you gotta find someone to buy it. Whoever buys it now owes the taxes. Plus, it’s impossible to do business in a country without directly or indirectly relying on land, so the tax is merely the cost of doing business within whatever country implements it.

      Further, land value taxes tend to reduce the upfront sale price of land, as they make land ownership an obligation as well as an asset. Cheaper land makes it easier to start businesses. With an appropriate LVT, the sale price of land would approach zero, and it would be functionally equivalent to renting that land from society.

    • Viking_Hippie@lemmy.world
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      1 year ago

      That’s what they SAY the reason is. The real reason is much more simple: politicians are (mostly legally) bribed by the only ones rich enough to do so: rich people, corporations and special interest groups.

      It’s not a necessary evil to avoid Apple moving their profits to Ireland or wherever for more favorable terms (they do that anyway ), it’s just plain ol’ corruption.