Taxes

Abstract

This is a compendium of several related notes on taxes. Section I presents a simple general tax scheme. It is a tax on value added by labor and capital that does not favor one over the other. Section II, on business income taxes, contrasts the taxation of business income for closely held pass-through entities and open corporations. Section III discusses property taxes as annual taxes on housing services and so a form of income tax. Section IV turns to wealth taxes. Its main point is that like property taxes, wealth taxes imposed annually are income taxes that are large relative to annual income or consumption services from taxed assets. As a result, wealth taxes can have large negative effects on prices of taxed assets. The paper closes with (what I think is) a fun section contrasting governments and non-profits and the way they are financed. The puzzle posed is to explain why people donate to nonprofits but minimize tax payments to governments even though governments and nonprofits engage in many of the same activities.