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The "quiet catastrophe" is particularly dismaying because it is so quiet, without social turmoil or even debate. It is this: After 88 consecutive months of the economic expansion that began in June 2009, a smaller percentage of American males in the prime working years (ages 25 to 54) are working than were working near the end of the Great Depression in 1940, when the unemployment rate was above 14 percent. If the labor-force participation rate were as high today as it was as recently as 2000, nearly 10 million more Americans would have jobs.
The work rate for adult men has plunged 13 percentage points in a half-century. This "work deficit" of "Great Depression-scale underutilization" of male potential workers is the subject of Nicholas Eberstadt's new monograph "Men Without Work: America's Invisible Crisis," which explores the economic and moral causes and consequences of this:
Is it an aberration, or a harbinger of things to come?
(Score: 2) by quintessence on Sunday October 09 2016, @05:22AM
You need a new tax scheme entirely
Land Value Tax
https://en.wikipedia.org/wiki/Land_value_tax [wikipedia.org]
I swear why this doesn't get more play is beyond me.
Progressive, "voluntary", nearly impossible to skip out on, and no dead weight loss.
Out of most of the taxation schemes, this seems to have the least amount of negatives.
(Score: 0) by Anonymous Coward on Sunday October 09 2016, @05:35AM
It doesn't get more play because land is not the primary source of wealth or income.
You can have a skyscraper resting on a single acre, housing thousands of workers beavering away without pause, generating massive wealth, while around it a farmer farms a thousand acres, feeding those people, and barely scraping a profit.
Even if you decide to declare that the farmland is worth less because less income is deriving from it, all you're doing is creating an income tax by stealth.
If your taxes are too high, people simply give up the land (remember jinglemail?) and leave for other countries.
In effect, it's surprisingly easy to skip out on, offers a lot of dead weight losses, and in the experience of the state with the least progressive tax structure, land taxes actually turn out to be hideously regressive.
For your information, that state is Washington, and the reasons are complex but broadly come down to: poor people stuck on land they can't sell (because of the tax bill) and without anywhere to go. It's more complex than that, but that's the basic outline.
Sorry, cool idea, but land value taxes are a proven bad plan. Consumption taxes are, by comparison, progressive, flexible, and a lot harder to avoid.
(Score: 2) by quintessence on Sunday October 09 2016, @05:52AM
Sorry, but that makes absolutely no sense.
Washington state in particular doesn't have LVT, so drawing conclusions from there is absurd.
Not to mention any people living in a skyscraper surround by farmland would only do so if there aren't better options available (it is still a market after all). Any wealth made by those people is kept since there isn't any income or consumption tax, and the only tax paid is by the landowner, which can't be passed on.
Come again?
(Score: 0) by Anonymous Coward on Sunday October 09 2016, @06:03AM
Washington state has a close approximation of a land value tax. Land is assessed as per the highest and best use of that land, and taxed accordingly.
I'm sorry you didn't know this. But it's easily verified online.
The example of the skyscraper wasn't about living in it (although that's possible as well) but performing productive work in it. Such a skyscraper would have a huge assessed value because of its utility in the context of extracting rents. That means that the owner of the land on which the skyscraper rests gets taxed like a Vegas casino, while the farmland either gets lightly taxed, or confiscated to pay ludicrously punitive taxes.
Do you get it now?
(Score: 3, Informative) by quintessence on Sunday October 09 2016, @06:31AM
Yeah, no.
Washington taxes the property as well as the structure, which is antithetical to the LVT, not to mention per here
https://wallethub.com/edu/states-with-the-highest-and-lowest-property-taxes/11585/ [wallethub.com]
is middle of the road as far as that goes.
The tax rate is based upon the state's budget, which again...
And Washington state has one of the highest sales tax rates.
http://taxfoundation.org/article/state-and-local-sales-tax-rates-2015 [taxfoundation.org]
Having among the highest land and sales tax (by your measure) should lead to economic catastrophe, and yet is among the wealthiest states.
Come again?
Such a skyscraper would have a huge assessed value
And you have no clue what you are talking about (the hint is in the name: land value tax).
(Score: 0) by Anonymous Coward on Sunday October 09 2016, @04:46PM
OK, let me break it down for you, Barney-style.
The Land Value Tax - so far, so good. Land. The value thereof. Tax that.
All good so far? Good. Now sit down and put your thinking cap on, because this is where it gets complicated...
The tax is on the value of the land - and how is that measured? Go ahead, think this one over. It's a biggie.
The value of the land is heavily influenced by improvements on it, including construction of buildings (whether residential, commercial, industrial or whatever) as well as the proximity of facilities, both natural and constructed.
Any attempt to tax two plots of land, functionally identical except for one being used to grow wheat while the other has a bustling office on it, would either raise nearly no revenue at all, or put every farmer and logger in the state out of business in a week. This is why it is "highest and best use", with allowances for green space.
As for your earlier remark that the owner would have no way of passing the tax on, that's flat-out ignorant. It becomes a cut of the rent, period. That's what happens today, and if it stops happening, people go out of business until they simply cede the land to the state in lieu of tax payment.
As for Washington's tax rates, sure the actual rates aren't that high, but it has very regressive taxes because of the way that those taxes on fixed property hit the poor disproportionately. Again, let me break this down for you, because you're having a hard time with the concepts:
Bobby's granddad left him three acres with a house, carved out from granddad's farm, so that Bobby will have a place to live. Bobby's house is out in the boondocks, because that's where the farm was. Bobby can't get much of a job out there, and the land is too small to farm without the kind of capital that would allow for intensive agriculture - that Bobby doesn't have. Bobby sits there on his land, with his house, with no, or low paying work, and the taxes accumulate. Pretty soon, Bobby has a tax bill he can't hope to pay, but keeps the property as long as he lives there because they won't evict him; just put a lien on the property. The lien means that even if he sold his nearly-useless three acres, he'd get pretty much nothing for it and then be broke and homeless.
So he's trapped.
Rich people in Redmond don't give a fuck about Bobby's problems, because they have no issues paying their property taxes. They can buy his property when he goes bankrupt for a song and a dance at auction, and put sprawling country mansions on the land, with room for Junior to have his quad, and Sis to keep her pony.
The net result, over time and space, is the progressive hollowing of rural Washington.
Go, Progress!
(Score: 2) by quintessence on Sunday October 09 2016, @06:38PM
All hat, no cattle.
First you claimed Washington has a land value tax (it does not. Singapore does. Argue from there.). Then some very ingenious example (how many skyscrapers do you see next to farm land?) of how the tax is unfair against the farmland (except the value of the farm land has gone up without the owner doing much of anything. Riiight.). And now some hubbub about highest and best use, which is easily remedied by taxing based only on the purchase price.
Did you get that?
But onward to Bobby.
So Bobby essentially living rent free until he dies doesn't have any economic value? Really?
And of course the only option available to Bobby is to be a slave to the land. Not once does it cross his mind to sell the property (even if at less than market value) to pursue a higher paying job. Or possibly keep the property as getaway with his higher paying job, and pay the taxes on it which should be minimal since it is out in the boonies. Is Bobby a character in an economic horror movie, because he seems to pick the worst possible course of action under your tutelage?
But hey, lets keep Bobby on the farm. What benefits does he get with LVT?
NO OTHER TAXES.
It seems to me he could do reasonably well not paying any taxes (liens) until he dies or the property is sold. And even a modest paying job could be workable if he isn't taxed at about 40% (back of the envelope calculation of what people actually pay in taxes, from the income tax to gas tax).
You mean to tell me a land tax (which is typically a few percentage points at most) is substantially more than a consumption tax? Supposing the land is valued at $100,000 (and that's being exceeding generous), the total tax bill would be around $1,000 under Washington's current property tax (can't find an assessment for just the land, but I figure adding in a nation LVT should be pretty close) . Assuming he can work full time with the minimum wage there, even a modest 2% consumption tax with the sales tax there would put the total tax bill at around $1,700.
Do tell.
But wait! There's more!
Let's see how Bobby does under a consumption tax.
THE ENTIRETY OF HIS WAGES ARE TAXED IF HE IS UNABLE TO SAVE.
And somehow this is not regressive.
There might be some credible arguments against land tax (I haven't looked into it that deeply, and apparently neither have you), but yours certainly ain't it.
(Score: 0) by Anonymous Coward on Sunday October 09 2016, @07:49PM
Washington has a tax based on the assessed value of land. If you're going to go purely by the unimproved value of the land, pretending that property near highways isn't near highways, property with moorages doesn't have moorages, and so on, then sure. It doesn't have a land value tax. The problem with this idea is that it instantly (assuming you're raising anything like the revenue currently raised) turns farming and forestry outright inviable.
Let's do some math. Aside from federal acreage, there are about 30 million acres in Washington. To raise equivalent revenue to current revenue sources from those will require a return of over $600, annually, per acre. ($635 and change, basically.) Even a quarter square mile farm (not very big) will have to come up with over $100,000, every year, just to pay taxes.
East of the Cascades where the farms are bigger, or all over the hills and mountains where it's mostly logging? Yeah, a million dollar tax bill will look small.
Oh wait, we haven't excluded state lands (and there are a lot of those). Privately held land will have to be taxed yet more heavily just to keep the revenue up.
Now you want to say:
Fabulous. Now you're measuring it by purchase price, which is totally divorced from land improvements. No, wait, it's not. It's heavily influenced by land improvements. Now you're not taxing by unimproved land value any more, at which point you're back to assessed values (just closing your eyes and pretending that a sale does not constitute an assessment).
So pick one: either you're going by unimproved land value (in which case primary industries go bye-bye) or assessed values are OK (in which case Washington already does that).
I'm not saying that Bobby's roof over his head doesn't have economic value. I'm saying that he ends up either keeping it, or losing most of the value. If he (tries to) keep it, he ends up paying a lot of tax on a domicile of minimal practical value, and probably in the long term ends up losing it to the state anyway (this is one of the reasons that Washington was determined to have a heavily regressive tax policy) or he sells it at a loss and tries his luck elsewhere, in which case you have another property probably sitting around unoccupied like a bad smell. I'm not making a recommendation for Bobby, I'm trying to explain to you what people have already found to be the real case in the real world. Feel free to google this to your heart's content.
Your 40% figure, by the way, includes federal taxes, which is a separate issue here. I'm just talking about the (relatively modest) state tax bill.
As for the consumption tax issue, you're just flat wrong. There are lots of exemptions in consumption taxes for basic items such as food and clothing. You can quibble about which items should be, could be or might be taxed, but it's not hard to shape a consumption tax to be a lot less regressive than a property tax - more so, because renters inevitably get handed the property tax bill, rolled into their rent.
Summary:
Land value tax either goes by unimproved value (death to primary industries) or by improved value (what Washington already does, and has been shown to be massively regressive in practice, both with passing taxes on through rents, or through de facto extractive penalties on the population).
Consumption taxes are more flexibly applicable by exceptions, more easily shaped to be progressive, more flexibly applied to the relative value of products and can even be applied to the service industry. (I'm not advocating consumption taxes; I think that they are misguided, but they sure do a hell of a lot better on these metrics than land value taxes do.)
(Score: 1) by khallow on Sunday October 09 2016, @05:49PM
Washington taxes the property as well as the structure, which is antithetical to the LVT, not to mention per here
[...]
And you have no clue what you are talking about (the hint is in the name: land value tax).
Wait a minute, you're not proposing to tax the skyscraper? Then that makes this heavily regressive. Rich people can afford a lot more structure per unit area than poor people. I wouldn't give this proposal the time of day.
(Score: 0) by Anonymous Coward on Sunday October 09 2016, @02:05PM
You seem to have missed the VALUE part of the the land value tax.
It's not land size tax.
(Score: 0) by Anonymous Coward on Monday October 10 2016, @08:04PM
these kinds of taxes and the mindless slaves that support them enrage me. the federal government has NO legitimate claim to MY land. So, i'm supposed to pay rent to state and federal lords on land i "bought"? fuck you! Also, property tax will be abolished in my state in my lifetime or shit will get stupid. stupid slaves are always talking about which tax scheme is best to replace the income tax. The scum in DC doesn't need an income tax or the revenue it represents. those thieves need to get honest work. What we need to do is hang every federal reserve employee on TV, after a fair "get the fuck out/quit your job" warning. The whores that stay after the deadline get hung on TV. You kiss ass morons who keep supporting the federal government's abuses are next.