tag:blogger.com,1999:blog-4058766287077382431.post8477864436476541940..comments2024-03-23T04:01:39.348-04:00Comments on Understanding Society: Taxes on businessDan Littlehttp://www.blogger.com/profile/15953897221283103880noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-4058766287077382431.post-2563290306865276172011-05-07T17:13:53.164-04:002011-05-07T17:13:53.164-04:00The simple way to figure tax share is to cost serv...The simple way to figure tax share is to cost services out pro rata, on the principle, pay for what you use. Take municipal and state expenditure and divide it up that way.<br /><br />Pretty simple in the case of fire, security, etc, based on appraised value of property. School tax is based on number of children in school. That's what conservatives want, I believe.<br /><br />Taxes operate differently at the federal level, since the federal government is the currency issuer while states, municipalities are currency users like households and firms, and they must fund expenditure with revenue, debt, drawing on savings or selling assets. <br /><br />The currency issuer in a fiat system such as is in place now funds itself directly, without needing to tax or borrow. There are political restraints imposed on this in the name of fiscal discipline, but they are imposed by Congress and Congress changes them at will, like the requirement to issue Treasuries and the debt ceiling. Tsy issuance is not necessary operationally under the current monetary regime.) <br /><br />Tax obligations give the currency value, since those with tax obligations must obtain it from the state. Taxes also serve to extract spending power to control inflation. There is therefore no direct connection between federal taxation and federal expenditure, since the federal government does not need revenue for funding. <br /><br />The federal government can always create currency to purchase real resources for public purpose, including transfer payments. The only contraints on the fiscal power of the federal government are inflation, exchange rate, and availability of real resources. (See www.mmtwiki.org.)<br /><br />Taxation is imposed primarily for two reasons. The first is inflation control and taxes can and should be targeted to this. Taxes are also used to discourage behavior that is undesirable socially. These can be combined by taxing away economic rent — land rent, monopoly rent, and financial rent — while encouraging productive investment as well as income and wealth distribution.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.com