The point is that SALES tax in the US doesn't correspond with "income" or even revenue. Sales tax isn't determined by the seller's characteristics - it depends on the buyer.
Incidentally, I support taxes in general and think we need more taxes on a lot of things. But taxes add cost to specific activities, and so they should be used to reduce those activities. Now, we don't want the perverse incentive of government relying on tax revenue and thus otherwise wanting to promote the activity. So, we need to find a balance in all these things. But like taxes on stock-trading would be good. And we should probably increase property taxes and just do the simple thing where property tax rates go up the more properties an entity holds (that makes it harder for investment companies to buy up all the properties and gouge everyone with high rents).
But for all the justified complexity of tax policy decisions, sales taxes are the worst and should just be eliminated.
There's less of a US case to be made for taxes on wages, but just because the US shits on labor and spends almost no resources in defending it or the health and security of the people who provide it. Other countries that do more have a better case.
Property taxes are worse than all other taxes. Why do I have to pay rent to the government for property that I already bought and paid for? Why does the amount of property tax I owe have no relationship to how much gain I actually realize, like income and capital gains taxes? Even sales tax has some sort of relationship to your realized gain (if you have less cash you probably buy less, so you pay less taxes).
* It is hard, nearly impossible to avoid.
* In case of nonpayment the property serves as collateral.
* Land value depends mostly on public infrastructure paid with public funds - roads, subways, schools etc are all public goods that the property owner profits from via price appreciation but the general taxpayer pays for. So a linkage needs to be established. See https://en.wikipedia.org/wiki/Georgism
In the words of a famous conservative:
"Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains – and all the while the landlord sits still. Every one of those improvements is effected by the labor and cost of other people and the taxpayers. To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is enhanced. He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived ... the unearned increment on the land is reaped by the land monopolist in exact proportion, not to the service, but to the disservice done."
Spot on. You could think of a city as a "service" that you consume by taking space. The more space you use the more you should pay every month.
Even more so if you own a house and leave it unoccupied, because it's wasting public money invested in infrastructure.
This is a strange conceit. Martha's Vineyard and Maui do not have orders of magnitude better "public infrastructure" than Kansas.
If anything, recent US real estate growth is a function of people leaving high-tax areas for inferior asphalt.
It ignores that zoning is contentious precisely when "public goods" are perceived to harm land value.
There's a circular reasoning in "land monopoly." Cover a grocery store in solar panels: who is "contributing to the general welfare," and who collects free rent?
UPDATE: also, read up on the differences between property tax and land use tax. They are different.
‘Nother Update: also, the government should stop encouraging property ownership as an investment for your future and retirement (tax breaks for mortgages, low interest rates, planned inflation) and then charge taxes on the hugely inflated value of that property.
Also, most property taxes are local state-level taxes, and most state-level congresspeople have to have a side gig to stay afloat. Guess what that side gig is: Real estate. Many are realtors and developers. They have a vested interest in raising property taxes to get people selling houses.
There's something to be said for this, but it doesn't work to just flip to the opposite extreme. As long as there are wealth inequities, then free-market supply-and-demand turns into the idea that anyone poor shall have nothing, not even the capacity to travel on streets or drink water. If they don't want to just up and die, they can get a loan to do these things and go into a cycle of indentured servitude for life.
The free market has never had any solution to such issues. Supply-and-demand works best when all the players have the same overall capacity to pay for things, and that's not how reality works out.
Societies prosper when efforts are made to make sure everyone has the foundations from which to build a productive life. That means health care, shelter, basic food and water, safety, capacity to get around (transportation of some sort), and access to information (education, libraries etc). If everyone has that stuff, they have the chance to add productivity to society rather than be a drain in the form of disease, crime, and so on.
The same could be done for electricity and other things.
But the free-market dogmatists aren't interested in using markets and prices effectively, they are interested in their self-concept as people who really "get it" and understand all the complex dynamics of economics. Once you let messy ideas like externalities and market-interference/regulation like block pricing and on and on and on… this becomes very threatening to their identity as it pushes them toward having to say "gosh, it's so complex, and I don't understand it all".
> pushes prices down
Except in the cases where it doesn't, such as luxury brands that exist to show off how expensive something is or for people to believe something is better because of the higher price — and this phenomenon is widespread throughout tons of aspects of the economy. Brands exist that sell essentially commodities at inflated prices through the power of advertising.
> Wealth increases and abounds in a free market.
According to the model you believe in, but that model isn't reality. Reality includes the fact that the wealthiest places on the planet (I mean larger societies, not places like off-share tax havens that just cater to the ultra-wealthy) have markets (but not completely free ones) and a history full of grotesque exploitation. The U.S. built it's initial wealth on slavery, genocide, and theft, and the non-free aspects of U.S. corporate behavior is still today a major factor of life.
You might indeed be right about wealth in truly free markets. But you don't have any controlled experiment on a society-size scale to even use for evidence since no case like that exists. And applying the ideas from one model to other situations doesn't mean it just becomes the model somehow.
You do know that neither merchants nor folks writing tax or sales software can "get rid of sales taxes", right?
"Our software doesn't handle that case" isn't a defense against a tax evasion charge.
Neither is "I forgot" or "Excuse me", despite what Steve Martin said.
https://snltranscripts.jt.org/77/77imono.phtml
You.. can be a millionaire.. and never pay taxes! You can be a millionaire.. and never pay taxes! You say.. “Steve.. how can I be a millionaire.. and never pay taxes?” First.. get a million dollars. Now.. you say, “Steve.. what do I say to the tax man when he comes to my door and says, ‘You.. have never paid taxes’?” Two simple words. Two simple words in the English language: “I forgot!” How many times do we let ourselves get into terrible situations because we don’t say “I forgot”? Let’s say you’re on trial for armed robbery. You say to the judge, “I forgot armed robbery was illegal.” Let’s suppose he says back to you, “You have committed a foul crime. you have stolen hundreds and thousands of dollars from people at random, and you say, ‘I forgot’?” Two simple words: Excuuuuuse me!!“
On the other hand, folks who write tax or sales software don't need to cater their software to US tax laws. Just don't use it there. At least from Wikipedia it seems, that the project leads are European.