Personally, I think our philosophy of taxation should be “tax what you take, not what you make”.
Because there’s finite land on Earth and nobody has created it, you occupying any parcel of it necessarily denies others from its benefit. Hence, a land value tax in proportion to the value of land you have taken from the rest of society.
Similar for finite natural resources. There are finite mineral deposits, finite oil deposits, finite phosphate deposits, etc., and anyone who extracts them takes something from the rest of society. Hence, we ought to have a severance tax in proportion to the value of the resource you have taken from the rest of society.
And also similar for negative externalities. When you pollute a river or the atmosphere or cause any other negative externality, you are forcing those around you to bear some of your costs, that is you are taking value from them to give to yourself. Hence, we ought to have externality taxes (aka “Pigouvian taxes”) in proportion to the amount of harm you have caused to society.
Further, I think taxing along this principle leads to the best overall outcomes, not just from an abstract sense of “fairness”, but from pragmatic economic outcomes.
Take land value taxes: economically speaking, LVT is just a great tax with great properties that has seen great empirical success.
But yeah, absolutely everything else should be tax-free. The government shouldn’t even be tracking your income, much less taxing you on it. Tax the land hoarders and polluters instead.
Personally, I think our philosophy of taxation should be “tax what you take, not what you make”.
Because there’s finite land on Earth and nobody has created it, you occupying any parcel of it necessarily denies others from its benefit. Hence, a land value tax in proportion to the value of land you have taken from the rest of society.
Similar for finite natural resources. There are finite mineral deposits, finite oil deposits, finite phosphate deposits, etc., and anyone who extracts them takes something from the rest of society. Hence, we ought to have a severance tax in proportion to the value of the resource you have taken from the rest of society.
And also similar for negative externalities. When you pollute a river or the atmosphere or cause any other negative externality, you are forcing those around you to bear some of your costs, that is you are taking value from them to give to yourself. Hence, we ought to have externality taxes (aka “Pigouvian taxes”) in proportion to the amount of harm you have caused to society.
Further, I think taxing along this principle leads to the best overall outcomes, not just from an abstract sense of “fairness”, but from pragmatic economic outcomes.
Take land value taxes: economically speaking, LVT is just a great tax with great properties that has seen great empirical success.
Or severance taxes: Norway has used them brilliantly to solve the resource curse.
Or Pigouvian taxes: basically all economists agree carbon tax-and-dividend is the single best climate policy.
But yeah, absolutely everything else should be tax-free. The government shouldn’t even be tracking your income, much less taxing you on it. Tax the land hoarders and polluters instead.