Wait, who defined income as the gold standard of the "progressiveness" of a tax system? If I make $200,000 and have $20 million of property, should I pay less tax than someone who makes $400,000 and has $500,000 in property?
It's not taxing net worth it is taxing one specific type of property. Most of Jeff Bezos' money isn't in real estate. It is regressive in that everyone needs housing. With an income tax you can have a zero/negative tax rate on low earners. Everyone who isn't homeless (even if through rent) pays property taxes.
You can see this effect if you compare the effective tax rates of California that has a income tax to Texas which relies on sales and property taxes.
California still has sales and property taxes so it isn't perfectly progressive, but it is much better.
I also don't really like how with property tax you can end up losing your assets. Let's say you work for years doing construction and pay off your house and then you end up on disability after hurting yourself. With property taxes you can end up losing your home.
I'm not convinced though that you are arguing in good faith and aren't just one of the few who benefit from a lower effective tax rate from regressive taxes. Why do you think a wealth tax is the best form of taxation and how would you implement it?
I'm probably very progressive by American standards. I think the state should exist to protect citizens from the worst of the slings and arrows. That's the purpose of the state.
Society should provide a basic level of health insurance, including disability allowance. (America's example suggests that this cannot be done privately, because insurers can bully citizens with size asymmetry.)
I don't think that disability allowance should cover the property tax for a massive ranch, but it should allow a moderate lifestyle. If you pile all your wealth into lots of real estate and become disabled, you may then have a hard choice: rent out some property, or downsize. But I don't think that's too bad. I'm not arguing for guaranteed luxury.
An average middle-class worker owning an average house who becomes disabled should not have to downsize; the allowance should cover property tax and running costs.
And yes, I'd fund this benefit from wealth taxes such as property tax.
Stepping back to address your main point, porqué no los dos?
Tax property, but cover it for poor citizens with negative income tax.
Professional landlords should profit from the value of maintenance they perform but, let's be real, what they mainly do is arbitrage rent against their credit rating on secured assets. That margin ought to be narrow; fuck 'em.
It's an undesired effect to subsidise scroungers, but the lesser of the evils compared to rent-seeking. On one hand, scroungers are poor, on the other, they're wealthy.
Since you assumed I was arguing in bad faith here, I assume that you are too, and that you are someone who is property rich but not very productive (eg a landlord of some kind, or a Californian benefiting from prop 13), and you are interested in keeping your privileged tax status.
Personally, I am in the top 10% of income earners, but not the top 1%, and I get most of my income from LTCG (this is how the tax code incentivizes you to structure your income, and I follow incentives).
All of your arguments here and the resulting evidence assume that "fairness" in a tax system is about charging people with high incomes more. Specifically, that progressive taxation - which has nothing to do with political progressiveness or social progress, and is just about the tax progressing as your income goes up - is the fair way to tax people. It is not. Pulling out these sources as arguments in favor of progressive taxation is begging the question.
Income and wealth are correlated, but they are not the same. Income and the societal costs of your existence are also not correlated. All of these "tax fairness" pictures and websites use a sleight of hand to deflect the attention from the wealthy: they use "1%" to refer to the top 1% of income earners, not the people who you would think are actually in "the 1%" as occupy wall street would have identified.
The people who take the brunt of the burden of today's progressive tax system are middle class doctors, lawyers, and software engineers. These are not people who take up a lot of resources or place a significant drain on society - they tend to spend their time working rather than joyriding in yachts and private jets or lobbying for subsidies for their businesses. These are people who create a lot of value for the rest of the economy, and it is silly to use "progressive" taxation to punish this value creation.
Progressive taxes, in my opinion, are not fair. They are the wealthy pulling up the ladder and making it harder to compete with them. They are taxing people who benefit society a lot in order to subsidize people who have accrued a lot of resources in the past.
Wealth in assets tends to move from things that aren't real estate to real estate. Companies tend to go bust after 100 years or so, even investing in every company on the market exposes you to fairly high beta, things like gold don't appreciate much, government bonds don't have an appropriate term or appropriate returns for 100 year time horizons, etc. If you want to preserve a fortune, or if you are investing for longer than a 50 year time horizon, you do it in real estate.
Therefore, the loss of property due to taxation is not a bug: it's a feature. If you are property rich, you should have a long-term incentive in making sure that your community does well, and you benefit a lot from the systems that maintain your property rights. You should be happy to pay higher property taxes because of that. Ultimately, your property rights are about excluding other people from using that property, and the government guarantees that right using the courts and using guns. If you want to stay property rich, you should have to do something that benefits society.
In comparison, a fair tax system, in my opinion, should be about the drain of resources that you place on society (this does not include things like welfare payments, which are not societal drains, but transfers of wealth). This means:
* Vehicle and gas taxes based on how much you drive, as well as taxes on railroads, flights, etc.
* Physical property taxes
* Luxury goods consumption taxes - a VAT or a sales tax works
* Carbon and pollution taxes
* Sin taxes
* High fines for criminal acts - preferably income-based or wealth-based fines
* License fees for resource extraction
* Fees and taxes for intellectual property maintenance
* A flat income tax that applies to all forms of income over a certain amount
Align the taxes with the costs that society bears for your existence. That should also have the benefit of further disincentivizing antisocial behavior. Tax people for the value they drain from the society, not for the value they add. *That* is fair.
