30 de abril de 2011

Inheritance Tax and Property Tax

Inheritance Tax
Inheritance tax is another Keyensian method of wealth redistribution. It is based on the idea that a portion of the accumulated wealth of individuals needs to be redistributed through the government to those in greater need. It is, in my opinion, an excellent example of a society that takes a utilitarian view of its citizens. What else can explain the willingness to add to the grief of surviving relatives by making them pay for what they inherit from the one who died? Beyond that, there is not much difference between the inheritance tax and an income tax. The inheritance is treated as a special form of income and taxed at its own special rate.

Property Tax
The main problem I have with property tax as it is implemented here in the United States is that it actually negates the principle of ownership. I say this because, regardless of what it may say on the deed of title, you can be evicted from what is supposed to be your property for failure to pay the tax. In what way is this different from the early feudal period where the landlord could kick out the tenants for failure to pay the required tax? I can see none. Despite the fact that we claim to own our property, we are in fact nothing more than tenants with more rights to the property than renters.
Another problem with property taxes is that the government claims a revenue from that which it has not provided. John Médaille makes excellent points on the claim that a community can make on the value it has provided to the land, but the current practice of property taxes goes well beyond that. It also taxes the value provided by the individual or business as though the community has some natural claim to it. It is one thing to say that the presence of community has provided value to a piece of land and therefore the community can make a claim against that value; it is quite another thing to say that the community can make a claim against an increase value of your house on that land because you decided to improve it at your own expense.
These problems are the reason I cannot support property taxes as they are currently implemented. With these defects in place, I would personally prefer the sales tax.

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