[hnbad]

The biggest problem with income tax is that income tax does not distinguish by source of income. There was a proposal in Switzerland to establish a separate capital gains tax with a considerably higher tax rate that targets income from capital (rent, stocks, dividends, etc) though sadly it failed to get enough votes.

The problem with LVT is that most billionaires don't have most of their wealth in land. It's just a specific version of a wealth tax that targets a form of wealth that is no longer the biggest factor in what makes the extremely rich, well, extremely rich. LVT won't turn Bezos or Musk into non-billionaires.

[eru]

Most countries already tax capital gains at a different rate than other income. For example here in Singapore we have a maximum marginal income tax of 22% and a capital gains tax of 0%. (Dividends are taxed separately.)

What was special about the Swiss proposal?

> The problem with LVT is that most billionaires don't have most of their wealth in land. It's just a specific version of a wealth tax that targets a form of wealth that is no longer the biggest factor in what makes the extremely rich, well, extremely rich. LVT won't turn Bezos or Musk into non-billionaires.

Bezos worked very hard and his company Amazon benefitted many customers, workers and investors. If you have a tax system manages to raise a lot of money to the government with no deadweight losses, then it's an extra bonus if it leaves Bezos to his billions, too. That should encourage other people to emulate him.

Land is still extremely important in the modern economy. You might think eg modern Internet companies don't have much to do with land, but for some reason they still mostly cluster in a few spots around the globe, like Silicon Valley; despite the high rent in those places. They must get some advantage from that land there.

An LVT would allow to drop income taxes and capital taxes to 0%.

[hnbad]

> What was special about the Swiss proposal?

The proposal taxed capital gains significantly higher than income from wages. It also had a wider definition of capital gain. The tax was also to only kick in for capital gains income exceeding a certain amount that exempted most median income earners' retirement accounts.

> Bezos worked very hard

You and I have very different views of this then. By this logic the midwive or nurse who delivered Jeff Bezos should deserve more wealth than him because she not only delivered the baby that went on to become the man to do all those things but also delivered many others throughout her career and likely spent long hours working just as hard if not harder. Or if you think considering indirect effects is unfair, literally any sanitation worker probably works harder and benefits people's lives more than Bezos ever did directly. And somehow all of them do their work without needing the existence of billionaires to encourage them because nobody ever became a billionaire by spending their life decluttering sewage systems or delivering babies.

Even if you were able to make the argument that Bezos worked thousands of times harder than the workers that made money for him, I disagree that we should compensate such "harder work" on a near-linear (or even exponential) scale because once spending a thousand dollars or one dollar becomes a rounding error for you, money stops being something you exchange for goods and services and starts being something you use to exert power over a supposedly democratic system.

If you believe in democracy (i.e. political power should be evenly distributed among the people), you either need to abandon capitalism (or more abstractly: the ability to exert political power by using money) or prevent the existence of billionaires (i.e. massive inequality in the distribution of money). If you also care about the climate crisis, the latter seems a no-brainer because without the ability to exert political power all the billionaires' money is good for is wasting resources by trying to figure out how many gold-plated yachts you can stack on top of each other.

> Land is still extremely important in the modern economy.

And yet you can't make an argument for why "modern Internet companies" cluster in a few places with high rent. If you want to fix the entire economy by introducing a land value tax maybe you should first have a solid grasp on why certain land is currently valuable and how an LVT would impact that.

> An LVT would allow to drop income taxes and capital taxes to 0%.

I know that Georgites believe this but you also completely sidestepped my point about LVT in essence being a limited wealth tax. This also presupposes that dropping income and capital taxes to 0% is something we want when the only historical data we have suggest that dropping income taxes and taxing capital gains lower than income from wages has led to a drastic widening of the wealth gap.

The LVT is a tool specifically designed to hurt landlords (and arguably it's not even very good at that as LVT on rented properties just translates to higher rents). It tries to solve "efficient land use". I'm not interested in making the market more efficient. I see market extremism as as much of a threat to humanity as religious extremism.