tax models

[Francois-Rene Rideau]

On Mon, May 29, 2000 at 07:01:39AM -0700, Fred Foldvary wrote:
>> Taxes on riches punish people for what they ARE;
>> François-René ÐVB Rideau
> 
> This needs to be disaggregated into riches created by nature and riches
> created by human action.
> Taxes on the rent of natural-resource riches does not punish people, while
> taxes on the products of human action does punish people.
>
>> Now for the second type of taxation, taxation on transactions,
>> seems fair to me. (1) one is taxed for things that one do
>> and is thus responsible for;
>
> What is fair about penalizing transactions that benefit the public and
> imposing an excess burden on the economy?

Taxing riches created by human action is same as taxing human action.
So basically, you take the very opposite claim of mine:
taxing people for that they ARE, for what nature does to them,
not for what they DO. Interesting.

Actually, that's the old debate of the 18th century physiocrats.
They, like you, believed that nature should be taxed, not men.
Political Economics finally rejected these physiocratic theses.
Maybe someone more knowledgeable in HET (History of Economical Thought)
than I am can say what arguments would put an end to them, if any.
Someone unknowledgeable but courageous might dig up the HET resources
(see http://fare.tunes.org/books/ for a list of pointers to them).
Although the physiocratic prejudice is still present in some of
Turgot's work, even Turgot has a good letter about values and money
where he shows a more modern view of value.

I think that Bastiat's chapter of the Economic Harmonies on Value
is great, as it shows that Value is born in human work,
and that gift of natures count nothing in it,
except as an initial reward for people discovering new techniques.
	http://bastiat.org/fr/de_la_valeur.html
(any english translation, anyone? or another similar text?)

In addition to what Bastiat says, my main contention
about the physiocratic conception of riches
is that it is impossible for an external observer to separate
the part of nature from the part of men, in a way that be both
just and applicable through law.
For instance, If I find out in the nature a diamond (or a lost piece of art);
should I be taxed according to its market value?
If I create it? If I buy it from the one who created it?
If I inherit it? What if everyone thought it was a very valuable item,
but actually it was not worth much? What in the contrary case?
In each case, how much did "nature" bring into the riches,
and how much are you going to tax whom?
And if something was found in the nature, then who are you to tax it?
And who was the owner to claim ownership?

> Taxes on the rent of natural-resource riches does not punish people,
> while taxes on the products of human action does punish people.
Yes, they do punish people, like all taxes (= the cost of governement).
Which is why taxes in general they should be kept as low as possible.
The question is, how to distribute taxes in a fair way,
that more or less matches the benefits of governement?

> What is fair about penalizing transactions that benefit the public and
> imposing an excess burden on the economy?
The fact that this transaction, being officially recognized by government,
covers expected governmental expenses to protect such transaction against
potential fraud, etc.

Moreover, what else is there to tax upon without being iniquitous?

[ François-René ÐVB Rideau | Reflection&Cybernethics | http://fare.tunes.org ]
[  TUNES project for a Free Reflective Computing System  | http://tunes.org  ]
Freedom transforms difficulty into opportunity, danger into responsibility.
"Protection" transforms difficulty into oppression, danger into tragedy.