[Paradigm]

I think most libertarians recognize that as much as we hate taxes, there needs to be some form of taxation in order to support the legitimate functions of government. I also realize there's some disagreement among libertarians over exactly what form of taxation would be most compatible with a free society. Some advocate a flat income tax, others prefer a consumption tax, etc. What do you prefer?

Personally, I'm partial to the Land Value Tax(LVT). It was advocated by a few classic liberals including Adam Smith, though its most prominent advocate was Henry George. This tax is basically a reformed property tax. When you pay property tax, you are paying two taxes in one--a tax on the land, and a tax on the structure. Under the LVT, the building is untaxed and the land is uptaxed.

This produces a number of positive effects. First of all, by untaxing buildings, you free the owner to make improvements without worrying about a higher tax bill. Then, by uptaxing the land, you make it so that the most valuable plots of land must be put to good use to be profitable, thus removing the incentive for land speculation and breaking down land monopolies, creating a sort of moderate land reform, which provides more opportunity and a greater standard of living for the poor. Despite what some may think, the LVT has the tendency to drive down housing costs. Also, as many economists including Milton Friedman have acknowledged, the LVT is the only tax which does not interfere with the price of consumer goods, making it very free-market-friendly. In Hong Kong, the LVT combined with one of the most Laissez-Faire economies in the world brought great prosperity while simultaneously bridging the gap between rich and poor.

[Comrade Ogilvy]

I'm vehemently opposed to an income tax.

If government should exist then IMO, it should be funded by a national sales tax.

[Noumenon]

Rothbard refuted the LVT.

http://www.mises.org/rothbard/georgism.pdf

I agree with him; I think it would be a very bad idea. I think the best policy would be to have a few different kinds of taxes, all of which are kept to a minimum.

If government should exist then IMO, it should be funded by a national sales tax.

The national sales tax would be even more dangerous than the income tax, at least how it is currently proposed.

http://www.lewrockwell.com/gregory/gregory48.html

A minimal national sales tax, designed to greatly reduced the revenue of the federal government, would be a different matter.

[Comrade Ogilvy]

No, but if the state were only 1-10% of GDP, you could have a workable national sales tax.

At present, the US government is worth 20-30% of GDP. So yes I agree a national sales tax in that regard wouldn't work.

[Paradigm]

Rothbard refuted the LVT.

http://www.mises.org/rothbard/georgism.pdf

I agree with him; I think it would be a very bad idea. I think the best policy would be to have a few different kinds of taxes, all of which are kept to a minimum.

Wow, that refutation by Rothbard was laughably unimpressive. I wonder if he even read Progress and Poverty. Oh, where to begin...

First of all, George did not advocate a 100% tax on land. He preferred something more like 90-95%, so there would be enough value left to sell it on the market. Second, land value taxation differs from nationalization in that the government does not control the land--it merely collects its rental value. It makes no decisions at to who gets the land or what they do with it. And doesn't the idea India and China, two of the oldest countries in the world just needing more time strike you as rather ridiculous? If you go to India, there's actually quite a bit of capital, but it's concentrated in the hands of landowners while hunger and famine continue to plaque the poor areas of the country.

As for his question of how the tax is to be levied, he is apparently unaware that current calculations of property values count the land value separately from the value of improvements, so far from requiring an "army of tax assessors" as he puts it, it would require no more assessment than current property values(It would actually require less). Simply put, Rothbard doesn't know shit about land assessment or land value. Of course, if he really wanted to know, he could've just asked one of the countries that already has a land value tax(Japan has had it since before Henry George was born).

As for his point regarding idle land, he is missing the point(as usual). It is not idle land in itself that is George's concern, but rather the monopoly of productive land in the hands of land speculators who let it appreciate in value without putting it to productive use while restricting others from access to natural resources. In Brazil, for example, the vast majority of arable land, most of which goes unused, is owned by a tiny percent of the population, while peasant farmers have to cut down rainforest in order to grow enough food to support themselves.

Productive land is valuable, and the value of that land increases as others occupy less productive land. The more productive a plot of land is compared to the land everyone else inhabits, the greater the income the landowner gets from it. As population increases, and the best land is already taken, that causes that valuable land to appreciate in value. THAT is the source of land value, not some arbitrary government speculation, as Rothbard would have you believe. Thus, the land speculator gets rich off of the fact that others don't have access to arable land. He can either cash in these increased earnings or charge people for access to much-needed resources. I normally roll my eyes when some socialist tells me that wealth is created by keeping others in poverty, but in the case of land monopolies, it rings true.

Note that "productive" in this case means the potential to yield income, so this applies to cities as much as it does to farms. In fact, land values tend to be much higher in cities, particularly business districts, precisely because it can yield more income per square foot than a farm ever could. Even when we look at residential areas, the land value is affected by the cost of living there(income taxes and such) and the opportunities available(schools, jobs, public transportation, etc.).

Most business monopolies that do not come about from government intervention can only maintain their monopoly by keeping customer satisfaction high. This is because as soon as another company can give them a better offer, they will. With the land monopoly, the landowner provides no services to maintain it. He simply owns a finite natural resource and restricts others' access to it. He amasses great amounts of wealth at the expense of others from sitting on his ass doing nothing. It is as if one were to buy a city's reservoir and keep all the water to themselves, or else charge people high prices for the use of it.

I've already written way too much, so I'll stop here. This is the first time I've read any of Rothbard's writings, and I have to say I am sorely disappointed. The man is an idiot. I might take him somewhat seriously if he was actually refuting Georgism, and not some imaginary dystopia of his. The man needs to get his facts straight.

[Sans Salvador]

Yeah, Rothbard's "refutation" is laughable and one could only accept it if they had no fucking idea about George.

See Rothbard's argument completely refted here

Click here
[Todd D. Edit: I hate it when I have to sidescroll perfectly good debates. Use the URL tags for long links next time, aight?]

First of all, George did not advocate a 100% tax on land. He preferred something more like 90-95%, so there would be enough value left to sell it on the market.

"We already take some rent in taxation. We have only to make some changes in our modes of taxation to take it all" (P & P. 1992 , p.405)

And doesn't the idea India and China, two of the oldest countries in the world just needing more time strike you as rather ridiculous?

You miss Rothbard's point. Rothbard isn't saying that people in China haven't been performing labor for a long time, he is saying that the product of the labor were priamrily consumer goods, and thus don't last a long time (or, in other words, people there don't benefit much from production that took place long in the past).

Rothbard's argument is dubious, as is George's "Chicago fire" argument to the opposite effect, but it isn't nearly as ridiculous as you make it seem.