That's not a rhetorical question since I imagine there would be a wide array of different views on it. In my opinion reasonable and fair taxation should be the priority. And the reason for this is because how tax is managed can radically reshape the economy. And so the role and expenditures of the government would shift accordingly. For instance today in the US there is an immense amount of land available for next to nothing.
I don't think most people realize what you can do with the smallest amount of land. For instance these [1] guys are self sufficient on 1/5th of an acre. In Pasadena, California no less! It just seems so wasteful and really just crazy that we have all of this land out there that we collectively aren't doing anything with especially at a time when ever more people are interested in environmentalism, sustainability, or even for those just looking for something different in their lives.
Are you willing to sacrifice many public services to reach the lower taxation level? I'm not talking about light rail and Shakespeare in the Park. In some rural areas the sheriff's jurisdiction is so large they tell 911 callers to get their shotgun and deal with suspicious activity themselves because a deputy won't get there in time. If the answer is yes, I applaud your intellectual honesty. Many people cling desperately to the notion that we can have comprehensive public services and rock bottom taxes, maybe through some magical and simple 10x government efficiency tweak. (At least local government can't deficit spend).
A big part of the problem is not the lack of money, it's completely reckless spending and management of money. If you look at the actual amount of money spent on any public servant ranging from teachers to police to garbage collectors, it's a minuscule fraction of the spending for their respective segment, as is the cost for facilities and other fundamentally necessary costs. Where the real expenses come in are in bloated administrative salaries paired with even more bloated administrative structure, unsustainable and irrationally constructed pensions, completely wasteful spending of discretionary funds, and so on. It takes a truly special government to manage to spend in excess of $2,000,000,000 billion on a website [1]. Of course that's federal spending but the exact same is true at the state level.
So for instance we ostensibly should take pride in the fact that we spend more on education than nearly any other country in the world (3 spend slightly more than us), even parity adjusted. It should show how highly we value education. Yet of course in reality our educational institutions are seemingly underfunded. What gives? As a random example Illinois, like most states, is currently in a 'higher education crisis.' This [2] article provides details on where their funding is going, and this is completely typical. Primary and secondary education suffers the exact same problems.
And this is a similar pattern in nearly (and that is a weasel word - to my knowledge it's safe to just say every) every single government program. So how can we fix this? One of the biggest problems with bureaucracy is that when money is 'free', there is a massive incentive to not only spend every single penny you have but also slightly overspend to justify budgetary increase requests in the future. Organizations that spend less don't get rewarded; quite the opposite - they get punished with reduced budgets in future years. If our government suddenly had an annual windfall of $10 trillion, it's not like we'd be living in utopia as far as state programs are concerned. We'd be running a deficit within a decade again with shockingly little to show for it all. It's the nature of bureaucracy. The point of this all is that whatever we are currently spending is certainly much more than we what we need to be spending, and if fair taxation resulted in less revenue (which, as an aside, is not necessarily a given) - I do not see that as a major problem.
[1] - https://www.bloomberg.com/news/articles/2014-09-24/obamacare...
[2] - https://www.illinoispolicy.org/reports/pensions-vs-higher-ed...
For example, the Netherlands has no capital gains tax or dividend tax, but it has a tax of roughly 1% - 1.5% of your net assets. So if you have a $300k investment property, it's taxed like that annually.
But, your own home is exempted. It's not considered part of your net assets.
The idea that a significant portion of a tax will be payed by producers is only realistic in non-competitive markets where producers receive a nontrivial economic profit (revenues minus opportunity cost). In competitive markets, producers' economic profit approaches zero.
We have been moving more and more toward a Capitalist Communism where the government owns everything and you are merely renting from them (this is just straight up how it is in China, they don't even pretend), but we still sell it as Capitalism because businesses aren't owned by the government.
This is not the way life should be and all property taxes (i.e. government owned property rentals) should be outlawed.
I assume that you intended this as a rhetorical question, but the answer is not "the government". Governments do not exist to defend property rights—that is merely propaganda. No criminal organization violates property rights more brazenly or systematically than governments do on a routine basis. Every tax, every regulation, every disproportionate punishment, every victim prevented from pursuing justice while those ostensibly granted that role do nothing—almost everything the government does involves violating property rights in some form. The only point in their favor is that, like any other protection racket, they are jealous of their monopoly and not very tolerant of lesser criminals setting up operations on their turf.
> And by what basis do they lay claim to make other people respect those rights?
There is no need to "make" other people respect anything. That is what makes property a natural right; the very act of violating a property right naturally justifies a proportional response in kind. That is simple universality and reciprocation at work, the basis for any self-consistent system of rights, and it is more than sufficient to ensure that most individuals will respect others' property rights without being coerced, because they in turn need others to recognize their claims to property as valid. Those who chose otherwise cannot rationally object if their victims respond in kind, taking back their own property plus a proportional amount as retribution.
If you are interested in further reading on this subject, I can recommend Stephen Kinsella's "Punishment and Proportionality: the Estoppel Approach" (https://mises-media.s3.amazonaws.com/12_1_3_0.pdf?file=1&typ...).
As a side note, in regards to your original point about beach front property, the paper you linked only recognizes property rights of property that has been homesteaded. So there would be no way of some rich person purchasing acres of land for their own private use (using the structure definition of homesteading).
For what it's worth I'm playing devil's advocate here, as usual, but I don't think this particular issue is so easy to defend. Something I was surprised to learn is that in the US, the police didn't even exist until 1838. Prior to that there were volunteer community watch and other such programs. I think the proper balance is probably one we've gone long past that's somewhere in between community efforts and heavily centralized paramilitary law enforcement.