> If I had to pick, I think I'd prefer the gross receipts tax, but I haven't studied the underlying economics to come to a conclusion on which is better/worse.
Gross receipts tax is just sales tax that doesn't show up on the customer's receipt. They like to pretend that it's then the seller who pays it instead of the buyer, but that's not how it works. It gets paid by whoever can't pass it on. In a competitive market that's the consumer, because the seller already has thin margins and can't absorb the cost without going out of business. (In a monopolistic market it's the monopolist, but that's just as true of sales tax -- in a monopolistic market the customer can't absorb higher prices because they're already paying monopoly prices.)
> SF already has a fairly high sales tax (~9%), so I doubt they could raise it anymore (I'm considering sales tax and VAT to be the same for this discussion, since they lead to the same revenue for the government, and same cost for the consumer).
Denmark and Sweden have 25% VAT. The EU requires it to be at least 15%.
> it's a regressive tax (the poor spend more of their income/wealth on consumption vs. the rich)
People always use this argument to justify income tax over VAT even though everything about the income tax doesn't actually work like that. "Progressive income tax" but not for FICA, which is like half the income tax ordinary people pay, and hey let's disguise that fact by alleging that it's being paid half by the employer even though that's not how it works. Let's put a cap on that too, so the wealthiest pay proportionally less than regular people. And then we'll have a bunch of means-tested benefits so that even for the "progressive" income tax, in practice lower income people are paying the highest marginal rates due to the benefits phase outs. Meanwhile we'll have income tax on the "profit" of international corporations, but only on paper because they don't actually report their profits in your country.
It also doesn't work when comparing VAT to property tax, because the rich generally don't use a disproportionate amount of their wealth to buy real estate -- unless it's rental properties in which case the property tax ends up being passed on to the tenants.
If you want to make VAT progressive then use it to fund a UBI. All of these other games only give people with accountants more holes to hide in.
From what I've read, the land tax is the most progressive tax.
All taxes except the land tax cause some sort of dead weight loss, which just leads to lower spending and economic activity, which leads to more unemployment.
> because the rich generally don't use a disproportionate amount of their wealth to buy real estate
Most valuable land is owned by the wealthy, and most poor people rent, so I don't see how a land tax would fall on the poor more than the wealthy.
> the property tax ends up being passed on to the tenants.
A land tax cannot be passed onto a tenant, since the supply of land is fixed, and so taxing land doesn't changing the supply-demand curve (leaving the equilibrium price the same).
> All of these other games only give people with accountants more holes to hide in
Actually, land tax has the least loopholes. Capital, businesses, high income individuals etc. can simple move to a jurisdiction with lower taxes if they want to. But they can't take their land with them, so the tax will always be paid (either they keep it, and pay the tax, or sell it to someone else, who can then use it).
Land and property taxes are absolutely passed on to tenants. If the tax is higher than the rent that can be extracted, that just means you have improperly priced the land/property. You can prove it by trying to sell the property at which point, no investor is going to buy the land for a price that won't be profitable so the price will fall decreasing the effective tax until it is profitable to rent it out when factoring in the taxes.
> All taxes except the land tax cause some sort of dead weight loss, which just leads to lower spending and economic activity, which leads to more unemployment.
Land tax does the same thing. If you try to generate all tax revenue from land tax then land tax is really high. Land tax is set based on the value of the land, so land in the city center becomes even more expensive than it is already and you increase the incentive for sprawl by not allowing the owners of the best land to recoup its value themselves, which deters investment there. (Property tax does this too, and moreso, because it taxes the investment in buildings as well; but trying to get 100% of tax revenue from property tax would be problematic too. It's bad enough as it is.)
> Most valuable land is owned by the wealthy, and most poor people rent, so I don't see how a land tax would fall on the poor more than the wealthy.
Rents are always proportional to ownership costs. If it cost much less to rent than own then the existing owners would sell their properties to by non-real estate investments until property values fell to parity. If it cost much more to rent than own then investors would bid up property values or build more properties in order to get those returns, until that wasn't the case anymore.
If you increase the cost of property ownership, you increase rents, and vice versa.
> A land tax cannot be passed onto a tenant, since the supply of land is fixed, and so taxing land doesn't changing the supply-demand curve (leaving the equilibrium price the same).
Tenants don't buy land, they by housing units. You can build more housing units or not on the same land.
> the tax will always be paid (either they keep it, and pay the tax, or sell it to someone else, who can then use it).
This is the basic flaw in the land tax theory -- that somebody has to pay the tax.
A piece of undeveloped land in the city center starts off as very valuable, so it has a very high land tax. Anybody who wants to buy it had better be getting a very large return. It makes it more profitable to buy one plot of land and build a 100 story building on it than to buy ten plots and build 10 story buildings. So enough people do that and break even from that to saturate the local demand for real estate.
But then there are those other 9 plots which are now empty, or still have 5 story buildings on them, next to the 100 story buildings. There isn't enough local demand to justify any more 100 story buildings, but they're paying the same land tax as the 100 story building next to them because the land is of the same type and in the same approximate location, so they're completely bankrupt. The land is worthless because the tax is more than the returns you can get from it -- you can't build another 100 story building because the rental market is saturated and its existence would lower rents to below your cost, but nothing else brings in enough revenue to pay the land tax either.
So you abandon the property, or donate it to a non-profit which doesn't pay the tax, and the tax is thereby avoided.
So in the most desirable locations you end up with a handful of very tall buildings next to a larger number of abandoned lots. That is not efficient land allocation.
Meanwhile in the suburbs the land value is not very high because it isn't as scarce (compare how much land is in the city center to how much is in the suburbs around it), and affluent people like to live there anyway, so everybody with money is living there and paying low taxes. And even there you might get the same thing -- a few 20 story buildings that completely fill a plot of land where people live, surrounded by empty lots.
Gross receipts tax is just sales tax that doesn't show up on the customer's receipt. They like to pretend that it's then the seller who pays it instead of the buyer, but that's not how it works. It gets paid by whoever can't pass it on. In a competitive market that's the consumer, because the seller already has thin margins and can't absorb the cost without going out of business. (In a monopolistic market it's the monopolist, but that's just as true of sales tax -- in a monopolistic market the customer can't absorb higher prices because they're already paying monopoly prices.)
> SF already has a fairly high sales tax (~9%), so I doubt they could raise it anymore (I'm considering sales tax and VAT to be the same for this discussion, since they lead to the same revenue for the government, and same cost for the consumer).
Denmark and Sweden have 25% VAT. The EU requires it to be at least 15%.
> it's a regressive tax (the poor spend more of their income/wealth on consumption vs. the rich)
People always use this argument to justify income tax over VAT even though everything about the income tax doesn't actually work like that. "Progressive income tax" but not for FICA, which is like half the income tax ordinary people pay, and hey let's disguise that fact by alleging that it's being paid half by the employer even though that's not how it works. Let's put a cap on that too, so the wealthiest pay proportionally less than regular people. And then we'll have a bunch of means-tested benefits so that even for the "progressive" income tax, in practice lower income people are paying the highest marginal rates due to the benefits phase outs. Meanwhile we'll have income tax on the "profit" of international corporations, but only on paper because they don't actually report their profits in your country.
It also doesn't work when comparing VAT to property tax, because the rich generally don't use a disproportionate amount of their wealth to buy real estate -- unless it's rental properties in which case the property tax ends up being passed on to the tenants.
If you want to make VAT progressive then use it to fund a UBI. All of these other games only give people with accountants more holes to hide in.