My values on tax policy have largely been shaped by the book Tax Shift from Seattle's Sightline Institute.
Some examples, emphasizing changes that could be made at the county level (but some may require authorization by the state legislature):
- sales taxes: Sales tax is a regressive tax that places a huge deadweight on the economy and provides no societal benefit.
+ resource consumption taxes: any resource which is limited but not otherwise accounted for in the market should be taxed. This includes clean air (pollution), road capacity (congestion), excessive road wear (due to studded tires or vehicle weight), etc.
- real estate improvement value taxes: real estate improvements should be exempt from taxes. It's silly to penalize property owners for improving their property by increasing their taxes. Exempting improvements also opens the door to higher taxes on real estate land (see next).
+ real estate land value taxes: land should be taxed based on its value (as it is today). This echos the 'limited resource consumption taxes' above. More importantly, it may provide a sustainable and equitable way of paying for public improvements through value capture or tax-increment financing: those properties that benefit from public improvements will see their land value go up, thereby generating more tax revenue; meanwhile, those properties that do not see as much benefit pay proportionally less. Tax exemptions should be granted for land uses which both do not generate revenue and benefit the community (public courtyards, churches, open/park space, etc), as it is expected that these land uses will increase the value of surrounding properties. (Also see 'Georgism'.)
Finance education with income tax. Education is expensive. Students are poor. But good education promotes future income and economic advancement for our society. Successful people and companies often owe a significant share of credit to the education that gave them the knowledge and skills necessary to succeed. Therefore, funding education with income tax seems appropriate. (Income tax should be progressive, not flat, and possibly even exempt those below the median income.)
Finance the armed forces with a wealth tax. The armed forces exist in order to protect our country and all that we have. Therefore, it should be funded through a tax on all that we have. However, this should only be used to pay for maintenance of the military organization, not for the cost of foreign wars which present no immediate risk to our nation. Instead, any new war should only be funded through a tax dedicated to funding the war. For example, if a war is commenced in order to ensure access to oil reserves, the war should be funded with a gas tax. (Of course then there's the problem of getting elected officials to admit to it being a war for oil...)
Finance local public improvements with land value tax. Tax revenue from the value of the land could be used to fund local public infrastructure without increasing tax rates! New models for tax revenue through increasing the value of land with local public improvements will need to be developed in order to establish backing for bonds that will pay for the improvements and be paid down through increased cash flow from increased property values.
Finance public safety with real estate improvement value tax. Tax revenue from the value of improvements upon the land should be directed towards protecting those improvements--specifically, public safety services including fire and police.
Finance health care with...I haven't figured this out yet. <sigh>
Taxes on investment income. What would be the disadvantage of taxing long-term capital gains at the same rate as income? Clearly much of the uber-rich get a significant discount on their tax bill due to this, as it represents a significant part of their income. Much of the rationale for not taxing the rich is the fear of penalizing people who work hard...but I don't think living off investment income counts as "hard work". (Obviously retirement accounts are excluded from this.)
Some have cited supposed unfairness of taxes in that 47% of americans pay no income tax (2009)
What's particularly ironic is that quite likely the red states--where the tea party movement is strongest *and* the cost of living is the lowest--are also probably already paying disproportionally less in taxes. To bring more fairness, perhaps the poverty line and tax brackets should be adjusted regionally to reflect the different costs of living across the country.
Additional future topics:
Agricultural subsidies...what's the point? Get rid of them! (Gradually.) (Also need to look closer at environmental impacts & mitigation.)
Gas/oil subsidies...what's the point? Get rid of them! (Gradually.)