Friday, February 23, 2007

Florida: Sales Tax v. Property Tax

I caught this blog entry from The Tax Foundation, a Think Tank to which I often will turn in order to find some very informative information about tax policy and tax statistics. The author expresses some dire concern that Florida may cut property taxes, while increasing the sales tax to compensate. When I read his warning, it reminded me of the difference between a Conservative and a Libertarian.

Conservatives will often make the argument in favor of tax cuts on pragmatic grounds, and usually will resort to pointing out that cutting taxes will increase the amount of revenue to the State, because the increased economic activity will result in more taxable sources, and thus offset the tax cut. The goal, to Conservatives, is to increase the amount of resources given to the State.

Libertarians, on the other hand, make the argument in favor of tax cuts on principled grounds: taxation is, frankly, theft. Theft is wrong. It is immoral to deprive a person of his property without just cause. Cutting taxes reduces or eliminates such theft and is the only morally justifiable course of action. The goal for Libertarians is that individuals be secure in their rights and property.

Where do I stand on this Florida issue of property vs. sales tax? I think, on its face, it sounds like a good idea. A sales tax is, as the author of the blog notes, avoidable. One can purchase off the internet, go across a border, or simply abstain from consuming to reduce one’s tax burden, while a property tax isn’t as escapable. Also, property taxes, in principle, turn us all into renters (one plank of the Communist Manifesto). Just as if you don’t pay the rent on your apartment, so too if you don’t pay the property tax, you can be “evicted” from your home by your landlord, the State.

So, I don’t really have a problem with the swap. I’m not particularly sympathetic to the argument that the State is going to lose money in the deal. Good! Let it! Maybe it’ll create more room for the productive sector to fill in the gaps.


Blogger doinkicarus said...

"A sales tax is, as the author of the blog notes, avoidable. One can purchase off the internet..."

And you can be busted for tax evasion, too. Most states have what is called a "sales & use tax." Which means, that the snowboard I bought from a small company in CO, if it is primarily used in MI, is subject to taxation in MI, and I am legally obliged to claim the purchase on my return, and to pay taxes to MI for the purchase of said snowboard.

3:00 PM  
Blogger Libertarian Jason said...

I've heard about stuff like that. I think NY has something similar. My sense of it is, though, the enforcement costs are astronomical, and the State just doesn't have the ability to monitor people's habits down to the nth degree.

11:00 AM  
Anonymous Anonymous said...

For the last few years, Ohio income tax forms have included an entry for sales tax collections of out-of-state mail order and internet sales.

May the BOYN rest lightly.

1:02 PM  

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