Yes, that is just a measure of distribution. I would argue that basing your taxation of someone based off of their income isn't the best position -- rather, base your taxation of someone based off of how well society serves their financial interests.
An economic term that might be useful is "net present value" -- reflecting both your assets and your expected present and future income, time-discounted. Of course, this gets tricky...
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Originally Posted by JJRousseau
But regardless, as much as I think your notion is one of the better arguments I have heard, why should someone with more assets pay a larger amount for the same service? The government provides services to each person equally. They do not give a higher level of service to a person with more assets.
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That is an interesting position. The government doesn't give me exclusive right to control property that it considers you own -- instead, the government enforces, up to and including with the use of force, your exclusive right to control the property that it considers you own.
If, according to the government, you own 90% of the land are of Canada, the government will kick me off of the land it considers you own.
To me, that seems as if it is granting you more rights than it is granting me.
Remember, ownership is a legal fiction. It is a powerful, useful legal fiction, but the structure of "I own X" is determined by our societies rules.
This can be demonstrated quite explicitly -- some societies have no ownership, some have communal ownership, have requirements of ownership that let the government revoke your property, etc.
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Nor do they put a higher value on his or her life. Each citizen benefits from the courts, the armies, the police such that they are free from oppression. Each benefits from the infrastructure such that they can move about earning a high or low income.
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But the infrastructure is making
you more money than it is making
me.
And the life of a street person is, in practice, not worth as much as the life of a billionare. This effect is not nearly as large as other effects -- we, as a society, do place some innate value on human life. But being rich still, practically, makes your life worth more.
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Originally Posted by JJRousseau
It is interesting though, that we use a form of asset taxation to raise municipal taxes. But the guy in the nice house certainly doesn't benefit from the extra he pays...
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On the contrary. If you make a city a better place to live, what happens?
More people want to move there.
When more people want to move somewhere, what happens?
Land values go up.
In at least one Business school, it was claimed that "the job of the mayor is to raise property values", because
anything that makes the city more desireable makes property values go up. The increased standard of living of the city dwellers is, essentialy, captured in the property values.
Now this isn't perfect -- the measurement of a "better place to live" by property value is a wealth-wieghted measurement. The opinions of poor people, as far as property values are concerned, don't matter as much as rich people. But that is a pretty standard market algorithm.
When you think of the price of a piece of land, don't think of it as a static value. The value of a piece of land is what it costs to own.
The cost to own a piece of land is the sum of the price of the money to buy the land, plus the taxes and costs for owning it.
The price of the money to buy the land is
the interest you pay on your morgage to buy the land.
(interest it the price of money)
So:
Interest% * "Value" of land + Taxes on land = cost of owning the land.
The effective "price" of the land becomes a psycological thing, where you have to take into account the expected future taxes, value, interest, etc.
But your city raises taxes by 1% of the land's value per year, and the money just goes away *poof*, and there is no chance this tax will disappear, the effect should be the value of the land
dropping, until the cost of owning the land matches the marginal want for consumers to live in the area.
If those new taxes are instead invested into things that make the city a better place to live in, and the was expendature efficient, then the value of the land
should go up dispite the higher cost to own the land at a given purchase price.
Now, the municipal taxes and expendatures aren't the only thing that influence the price of land -- but they are part of the equation.
