Posted: Apr 27, 2005 By: Brad Malamud

Subject: single property tax


Dear Sirs and Madams:

As a 1979 LL.M. in Tax from NYU, I have a detailed background in taxation. My view is that not only are the current tax laws overly complicated, but they are overly politisized. Strangely, the solution is quite simple. So is the premise. First, no matter what system of taxes are used, revenue must eventually equal government expenditures.

Replace all income tax with a national property tax! Also eliminate all other taxes on individuals and corporations doing business in the United States.

Easy and inexpensive to enforce. No more IRS.
Has worked for decades for states.
As value increases, so does tax, without raising rates.
Everyone pays, but it is progressive, since rich own far more property.
Renters pay since they live on property.
Foreign companies pay since they rent, or ship into this country, etc.
Saves billions of dollars on accountants and tax compliance.
No tax returns are required. Government mails out property taxes (like states).
Failure to pay results in sale of property (like states).
Should bring capital back to USA since our banking system would not subject interest or dividends to taxation! This should allow for lower interest rates and improve the economy.
Almost everyones take-home pay would increase (hopefully enough to pay the property tax).
Politics would be limited on tax increases.
Underreporting would be eliminated.
The cheating that would result from a VAT would be eliminated.
Tax cheating and underreporting would be eliminated.

Expensive for people on fixed income who have appreciated property but little income.
Could allow a deferral until death, etc. for those individuals.
Could allow a phase in over 10 years to allow economy to adjust.
Need a national policy for dealing with net leases (this tax was not contemplated)

I would not replace FICA and FUTA since those are not taxes. I would also not exempt any property from this tax, except government property. All private property would be tax (thus lowering the effective rate). One could argue for two rates, personal and commercial. But this is a simple decision.

Thank you for your consideration.

Brad Malamud