Dying of Money : Lessons of the Great German and American Inflations by Jens O. Parsson

Author:Jens O. Parsson [Parsson, Jens O.]
Language: eng
Format: epub
Publisher: Wellspring Press, Boston, Mass.
Published: 1973-12-31T16:00:00+00:00

Notes

31

American Taxes

If tax structure is at the heart of the modern economic problem, the American tax structure in the inflation was from every relevant viewpoint a monstrosity. It was scarcely less absurd than the tax structure that forced Germany into the World War I inflation, lacking even so much as a single broad-based tax available to the central government rather than the component states. American taxes began with a 1913 framework that was poorly conceived at its building and was never fundamentally remodelled. They progressed through myriad clumsy modifications until the labyrinthine handiwork that remained resembled what the Capitol building might have looked like if the elected legislators had been allowed, in committee, to draw the plans and erect the stonework.

The principal absurdities of the American tax structure fell into two main categories. The first was a complete inability to mount capital taxes sufficiently broad and massive to relieve the need for inflation. The second was an extreme proclivity for needless complexities and artificial distinctions which stimulated the useless, hindered the useful, and bewildered everyone. Many of the principal absurdities had a foot in each category. The principal absurdities that bear mention were in the areas of net worth taxes, inheritance taxes, capital gains taxes, corporation taxes, and progressive income taxes.

Net worth taxes in the American tax structure were absurd by their absence. Comprehensive net worth taxes were unknown to the United States, although many of the Continental European nations including Germany, the Netherlands, Luxembourg, Switzerland, and all the Scandinavian countries had smoothly functioning net worth taxes as important parts of their tax structures. A net worth tax is the broadest and most direct imaginable tax on all of capital and only capital. If ever any tax promised to be broad enough and massive enough to take the place of the inflation tax on money wealth, it would be a net worth tax on all of wealth. A net worth tax sufficient to do the job in the American structure would not have to be a heavy tax. A tax in the range of 2% of value in normal times, perhaps less, and higher only in times of emergency such as wartimes, would be enough. A net yield of perhaps $30 billion of new revenue would be about right. This net worth tax on the value of capital, in addition to a regular income tax on the balance of income from capital, would be what imposed on capital a total tax burden heavier to the correct degree than on personal income. Even so, most kinds of capital would bear a lighter total tax burden than they did under the existing American hodgepodge of capital taxes including corporate taxes, double dividend taxes, and inflation taxes.

A net worth tax could incorporate into a uniform structure the welter of local real estate taxes that threatened to crush many localities of the United States. Real estate taxes were peculiar to the English-speaking countries. Those countries of Continental Europe that used the greatly superior net worth tax generally did not have appreciable real estate taxes in addition.

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