Bitcoin Forum
December 04, 2016, 02:34:16 PM *
News: To be able to use the next phase of the beta forum software, please ensure that your email address is correct/functional.
 
   Home   Help Search Donate Login Register  
Pages: « 1 [2]  All
  Print  
Author Topic: Cryptocurrency & sustainable taxation  (Read 2984 times)
blogospheroid
Full Member
***
Offline Offline

Activity: 129



View Profile
July 13, 2011, 06:07:40 AM
 #21

I don't understand why it will be efficient. It seems to me that it will be horribly inefficient. If I can half my taxes by using half as much land, won't I do that even if it's quite inefficient?
I don't deny that there will be an initial stage of re-adjustment, but then all capital, land and labour combinations will settle after a while. You need a minimum of urban land to do your work. Your decisions are made on the margin. Also, please note, we are discussing a structure that has already been disrupted by today's taxes. Are you ignoring today's distortions?

Quote
You start making those things tax free and your rate will have to be extremely high. That will mean the harm you do to everything else will be even higher.
Everyone will get a standard deduction. That is true of today's income tax as well. We are talking of replacing those taxes.

Quote
Quote
People will only get rid of resources that they cannot utilise. Also, if people got rid of land and resources, then the price of natural resources fall, which means more of the wealth share shifts towards labour and capital. (The georgists utilise a 3 factor model - land, labour and  capital). Higher wages and higher return to capital is what is expected by development.
Which means the tax rate has to go up even more, creating even more inefficiencies in land use.
Free people coming together, confident in the rule of law in an area, producing and trading, create development. Development makes sorrounding land more valuable. That land's value, which in today's parlance is a positive externality, is taxed and used to sustain the courts and the police that maintain the rule of law. It is a positive loop.

Quote
You want taxes that don't distort economic incentives.
The land tax is the least distortionary of all taxes.

1480862056
Hero Member
*
Offline Offline

Posts: 1480862056

View Profile Personal Message (Offline)

Ignore
1480862056
Reply with quote  #2

1480862056
Report to moderator
1480862056
Hero Member
*
Offline Offline

Posts: 1480862056

View Profile Personal Message (Offline)

Ignore
1480862056
Reply with quote  #2

1480862056
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1480862056
Hero Member
*
Offline Offline

Posts: 1480862056

View Profile Personal Message (Offline)

Ignore
1480862056
Reply with quote  #2

1480862056
Report to moderator
1480862056
Hero Member
*
Offline Offline

Posts: 1480862056

View Profile Personal Message (Offline)

Ignore
1480862056
Reply with quote  #2

1480862056
Report to moderator
1480862056
Hero Member
*
Offline Offline

Posts: 1480862056

View Profile Personal Message (Offline)

Ignore
1480862056
Reply with quote  #2

1480862056
Report to moderator
JoelKatz
Legendary
*
Offline Offline

Activity: 1386


Democracy is vulnerable to a 51% attack.


View Profile WWW
July 13, 2011, 07:38:12 AM
 #22

I don't deny that there will be an initial stage of re-adjustment, but then all capital, land and labour combinations will settle after a while. You need a minimum of urban land to do your work. Your decisions are made on the margin. Also, please note, we are discussing a structure that has already been disrupted by today's taxes. Are you ignoring today's distortions?
There question is what will be left when the re-adjustment is done. I suspect that it will be horrible. As people reduce their land use, the tax rate will have to go up, pushing people to reduce their land use further. The net result will be huge amounts of wasted resources because the tax system has made it so inefficient to use them.

I don't ignore today's distortions, but an income tax or VAT distorts an awful lot less than running a modern government entirely on land taxes.

Quote
Quote
You start making those things tax free and your rate will have to be extremely high. That will mean the harm you do to everything else will be even higher.
Everyone will get a standard deduction. That is true of today's income tax as well. We are talking of replacing those taxes.
That's not true of today's income tax because it doesn't push people very hard in any particular direction. A land tax will push people hard to use less land.

Quote
Quote
You want taxes that don't distort economic incentives.
The land tax is the least distortionary of all taxes.
I can't see how that could possibly be true. Why doesn't is tremendously preference economic activity that doesn't require the use of lots of land over economic activity that does? And how does an income tax or flat consumption tax distort anywhere near that much?

I am an employee of Ripple.
1Joe1Katzci1rFcsr9HH7SLuHVnDy2aihZ BM-NBM3FRExVJSJJamV9ccgyWvQfratUHgN
patvarilly
Jr. Member
*
Offline Offline

Activity: 42


View Profile
July 13, 2011, 07:48:58 AM
 #23

There's no such thing as sustainable taxation. As the government continues to grow its odious debt, it will require more funding. A government never remains small but will continue to absolute tyranny or implosive failure.

How do governments with net savings (i.e., negative net debt) fit into your worldview?

http://www.economist.com/blogs/dailychart/2011/07/government-debt
Anonymous
Guest

July 13, 2011, 08:16:50 AM
 #24

There's no such thing as sustainable taxation. As the government continues to grow its odious debt, it will require more funding. A government never remains small but will continue to absolute tyranny or implosive failure.

How do governments with net savings (i.e., negative net debt) fit into your worldview?

http://www.economist.com/blogs/dailychart/2011/07/government-debt

They do but they will eventually fail.
blogospheroid
Full Member
***
Offline Offline

Activity: 129



View Profile
July 13, 2011, 08:51:26 AM
 #25

There question is what will be left when the re-adjustment is done. I suspect that it will be horrible. As people reduce their land use, the tax rate will have to go up, pushing people to reduce their land use further. The net result will be huge amounts of wasted resources because the tax system has made it so inefficient to use them.
I don't ignore today's distortions, but an income tax or VAT distorts an awful lot less than running a modern government entirely on land taxes.
Cities sprawl when there is empty land nearer to the centre. People spend a huge amount of money to be in a "good" school district. There was this whole goddamned housing bubble. There are many distortions and waste of resources in today's system itself.

If people sell land at lower and lower rates, then the marginal land is free land. Free land , which people can occupy and build their lives around. Businesses, once they establish brand names can move to smaller towns to escape taxes instead of setting up offshore subsidiaries.

Quote
That's not true of today's income tax because it doesn't push people very hard in any particular direction. A land tax will push people hard to use less land.
Income taxes persuade people to work less and be less productive. Land taxes persuade people to use less urban land and natural resources and earn as much income as possible.

Quote
Quote
The land tax is the least distortionary of all taxes.
I can't see how that could possibly be true. Why doesn't is tremendously preference economic activity that doesn't require the use of lots of land over economic activity that does? And how does an income tax or flat consumption tax distort anywhere near that much?

Quoting from the wikipedia article on excess burden of taxation "In fact almost any tax measure will distort the economy from the path or process that would have prevailed in its absence (land value taxes are a notable exception)"



TierNolan
Legendary
*
Offline Offline

Activity: 1036


View Profile
July 13, 2011, 09:19:13 AM
 #26

The max that can be paid out in an insurance claim is the buildings value.  This is less clear cut.  A business could self insure for a portion, or all, of its insurance and then understate the buildings value.

One problem is that with high land value taxes, the property value would be equal to the buildings value, since the land tax would eliminate the value of the underlying property.

With high land value taxes, the usage value of the property will not go away. The big city central district will still be a place where businesses and people will want to be in. All that changes is to whom the rent goes to. Right now it goes to the banks in the form of interest for home/commercial loans. In a world with bitcoin and land taxes, it will go to the local government.

On second thoughts, for minimum tax, you want to overstate the buildings value.  Self insuring would just push down the effective buildings value, so that would make the tax worse.

So, your idea is that if someone is willing to insure the buildings for $X, then it is assumed that the building is worth $X? 

Side payments to the insurance company could distort this.  If there is a 1% chance of the insured thing happening, then businesses might be willing to insure for a higher than stated value plus some kind of commission.  This is balanced by the fact that insuring a property for more than it is worth is extremely risky.  It creates an incentive for the owner to have an "accident". 

There could be a law that intentional destruction of your property to claim the valuation insurance is legal.  Lying to the valuation company would be grounds for being sued though.

I still think some kind of averaging would be a good idea.  For zero distortions, nothing the property owner can do should be able to change the tax they pay.

In theory, the government could burn down the building and pay the stated building's value if they think you have over stated the building's value.

Land generally is worth more to the current owner than to anyone else, so the value an owner places on his land is likely to be higher than market value.  Land with high sentimental value would end up being taxed more.

Finally, it is more important that the assessed land value is defined by a clear rule than having extreme accuracy.  Even if the assessed value was 50% higher than the actual land value, then the tax would still have zero distortions.  The only time there is a problem is when the assessed land value is larger than total property value.  Setting land value = (total property value) - (insured building's value) guarantees that the assessed land value is less than the total property value.

In theory, it is possible to have a negative buildings value.  This would be property where the buildings are actually dis-improvements.  For example, a nuclear waste storage facility could very easily have a negative improvements value.

1LxbG5cKXzTwZg9mjL3gaRE835uNQEteWF
anu
Legendary
*
Offline Offline

Activity: 938


P2P Everything


View Profile WWW
July 14, 2011, 02:39:54 PM
 #27

There's no such thing as sustainable taxation. As the government continues to grow its odious debt, it will require more funding. A government never remains small but will continue to absolute tyranny or implosive failure.

How do governments with net savings (i.e., negative net debt) fit into your worldview?

http://www.economist.com/blogs/dailychart/2011/07/government-debt

Norway, as an oil and gas exporting country, is a temporary exception. Let them run out of gas and oil and their surplus will vanish. Their spending is already way too high.

Switzerland is IMHO the only real, permanent exception to Atlas' rule. I guess stability is just their business and they know it. I expect the CHF to be the last Fiat currency standing.

-Anu

Zero Reserve - A distributed Bitcoin Exchange

Install - Getting Started - BitcoinTalk Thread - Github Source
Vaxum
Newbie
*
Offline Offline

Activity: 21


View Profile
July 18, 2011, 08:36:53 AM
 #28

 
If you want to implement taxation it would be simpler to create another block-chain and have miners extract the tax.

Or implement a block-chain that extracts a tax from everyone's wallet.

Either of these are possibilities. The hardest part is making sure that the miners extract the correct amount of tax and that such taxation is justified.

There could be a flat-rate tax on all transactions, and people could apply for a tax refund.

Therefore miners must have an incentive to extract the tax. ATM bitcoin achieves this by the using "honest nodes". These "honest nodes" uphold the rules outlined by Satoshi. This could change in the future, if the miners feel that for whatever reason that it is best to extract a 'tax' from transactions then the definition of a honest node may change. This could mean that the block-chain in the future will fork and have some sought of taxation. Blocks that have non-taxed transactions will not be accepted. 

But you have to justify the reason for taxation. Otherwise the miners are cutting their throats. Holders of the currency will lose faith in the method of taxation. The revenue from taxation must be used to increase the value of the economy associated with the crypto-currency.

How would distribution of the tax occur ? This would mean a kind of voting system. It would be difficult to still remain anonymous without some fancy crypto-work.
TierNolan
Legendary
*
Offline Offline

Activity: 1036


View Profile
July 18, 2011, 12:11:33 PM
 #29

These "honest nodes" uphold the rules outlined by Satoshi. This could change in the future, if the miners feel that for whatever reason that it is best to extract a 'tax' from transactions then the definition of a honest node may change. This could mean that the block-chain in the future will fork and have some sought of taxation. Blocks that have non-taxed transactions will not be accepted. 

At the moment, the coinbase transaction is almost like a tax.  When it dries up, miners who want it to continue could fork the chain.  The chain with permanent inflation due to a non-decreasing coinbase would potentially have higher security than the one which relies on transaction fees, so users may be willing to accept inflation in exchange for greater hashing power.  In fact, even if the coinbase remained at 50 per block, inflation would drop to zero over time anyway, since as there are more coins in existence, adding 50 every 10 minutes has less of an effect on inflation.

It would have to be a switch en mass, since the official spec states that the coinbase size must drop as the number of blocks increases.

If a government banned miners in their territory from mining on the main chain + added a requirement that all coinbases must pay X per block to the government, then you could end up with different forks per country.

It is unclear how well a ban would work out though.  If POS transactions using the banned chain were illegal, most shops wouldn't accept main-chain bitcoins, but would accept national chain bitcoins.

1LxbG5cKXzTwZg9mjL3gaRE835uNQEteWF
Pages: « 1 [2]  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!