Bitcoin doesn’t do anything to prevent taxation of real estate or otherwise conspicuous property (which, incidentally, I find to be superior forms of taxation anyway). The government says, “this land is worth X GBP, pay y% of that or be evicted”. It doesn’t need to follow trillions of transactions to get that to work. It only has to follow transactions related to transfers of such conspicuous items, which (unlike with other valuables) it has significant control over due to people’s need for government to recognize that ownership.
For example, if a gold coin is stolen from you, “good luck getting it back”, but if a horde somehow decided to “steal” your house, the government doesn’t have any problem eviicting them and giving it back to you. Since people want the government’s title registries to recognize their ownership of a house, I suspect they would play along and disclose purchase price in home sales. (And this is all assuming the government will bother to get property valuations correct in the first place...)
taxation of real estate or otherwise conspicuous property (which, incidentally, I find to be superior forms of taxation anyway)
What are the examples you’re thinking of of countries who get the major, or even a substantial, proportion of general revenue from land taxes rather than income and/or sales tax?
It’s a state, not a country, obviously- but until recently New Hampshire had not sale or income tax. The government was funded almost exclusively by real estate taxes and government run liquor stores.
None, but it becomes a bigger fraction as transactions become easier to hide. This phenomenon is mentioned in an article by Paul Birch and my nemesis. (Edit: actually, that article doubles as a warning of how governments are likely to respond to the difficulty of monitoring transactions, and it’s neither pleasant, nor the kind that brings about revolutionary change.)
The reasons I had for deeming it superior are that:
It’s more transparent and hard to privately evade.
It doesn’t require extensive monitoring of all the transactions in the economy.
It doesn’t punish people for engaging in Pareto-optimal transactions (working for someone, buying something, etc.)
That’s one thing that (i think) most economists do agree on: the first best tax scheme is a land tax scheme—on the value of the land, not the value added (by building houses, apartment buildings, or skyscrapers).
This is politically infeasible and measuring the value added is difficult, so the second best most economists push for (i think) is a sales tax which at least doesn’t discourage productive behavior.
The income tax, on the other hand, is just a terrible idea.
Many economists do support the land tax, but think it is too low to support government functions. I think a better criteria is—restrict the government only to the extent that you can support with a land tax, since a land tax is basically the approrpriation of a positive externality(civilization all around you)
When the tax approaches the rent of the property, the capitalised land value drops to zero. If the land tax is based on percentages, you’ll have the rate escalating way beyond 100%. No problem for homo economicus, but most real world people would be shocked by seeing property tax rates of 100000%.
Bitcoin doesn’t do anything to prevent taxation of real estate or otherwise conspicuous property (which, incidentally, I find to be superior forms of taxation anyway). The government says, “this land is worth X GBP, pay y% of that or be evicted”. It doesn’t need to follow trillions of transactions to get that to work. It only has to follow transactions related to transfers of such conspicuous items, which (unlike with other valuables) it has significant control over due to people’s need for government to recognize that ownership.
For example, if a gold coin is stolen from you, “good luck getting it back”, but if a horde somehow decided to “steal” your house, the government doesn’t have any problem eviicting them and giving it back to you. Since people want the government’s title registries to recognize their ownership of a house, I suspect they would play along and disclose purchase price in home sales. (And this is all assuming the government will bother to get property valuations correct in the first place...)
What are the examples you’re thinking of of countries who get the major, or even a substantial, proportion of general revenue from land taxes rather than income and/or sales tax?
It’s a state, not a country, obviously- but until recently New Hampshire had not sale or income tax. The government was funded almost exclusively by real estate taxes and government run liquor stores.
None, but it becomes a bigger fraction as transactions become easier to hide. This phenomenon is mentioned in an article by Paul Birch and my nemesis. (Edit: actually, that article doubles as a warning of how governments are likely to respond to the difficulty of monitoring transactions, and it’s neither pleasant, nor the kind that brings about revolutionary change.)
The reasons I had for deeming it superior are that:
It’s more transparent and hard to privately evade.
It doesn’t require extensive monitoring of all the transactions in the economy.
It doesn’t punish people for engaging in Pareto-optimal transactions (working for someone, buying something, etc.)
That’s one thing that (i think) most economists do agree on: the first best tax scheme is a land tax scheme—on the value of the land, not the value added (by building houses, apartment buildings, or skyscrapers).
This is politically infeasible and measuring the value added is difficult, so the second best most economists push for (i think) is a sales tax which at least doesn’t discourage productive behavior.
The income tax, on the other hand, is just a terrible idea.
Is this your statement or that of economists? (I ask because the rest of your post is about what economists say.)
Both, though like the other statements about what most economists think, I’ll note that I’m not super-certain.
Many economists do support the land tax, but think it is too low to support government functions. I think a better criteria is—restrict the government only to the extent that you can support with a land tax, since a land tax is basically the approrpriation of a positive externality(civilization all around you)
Why can’t the rate just be set higher?
When the tax approaches the rent of the property, the capitalised land value drops to zero. If the land tax is based on percentages, you’ll have the rate escalating way beyond 100%. No problem for homo economicus, but most real world people would be shocked by seeing property tax rates of 100000%.