Progressive Flat Tax

Thank you. I shall bring forth my case I don't really see how I can be any clearer than I was in my initial argument, but I will try. Perhaps you can tell me which part of it has you confused?How something can be a Flat Tax, but also Progressive. A Flat Tax implies it doesn't increase, period, while a Progressive Tax increases with value.==========================================================1 = Property ValueThe Property Value takes into account the potential of owning the land, and in business, the potential revenue. Land that is going to cost a lot to own without increased potential is not worth as much as land with the same potential but less cost.Since the cost of ownership is increased by a 20% tax, a huge amount, but the potential return in revenue does not increase, the overall value of the land decreases. This is different from Income Tax because Income Tax only affects business value, but because it's based off the income, less income means less cost. It won't affect the land value. A 20% Estate Tax will hurt smaller businesses and lower the overall Land Value.It raises cost of ownership without outweighing the increased cost with increased benefits. As we see from the chart above...As Tax increases, so does the cost of owning the land. The benefits stay the same, while the Profit decreases.This lowers the value of owning the land.The problem becomes Land Value. Land Value will decrease when the cost of owning it rises and the benefits/profits don't. This will destroy the Real Estate market for corporate ventures, and many will find themselves selling out before they take the hit.This is also counter-productive, as the tax is based off Property Value. While the Percent is the same, how much each percent is worth decreases.-----------------------Land Value = 1,000,0001% = 10,00020% = 200,000Land Value = 750,0001% = 7,50020% = 150,00Land Value = 500,0001% = 5,00020% = 100,000-----------------------At first, this would counter profit loss, but the total worth of Corporate Assets would crumple under the loss of Assessed Value. This could, and likely would, hurt stock value drastically. The Market would either fully crash, or move up and down rapidly and dangerously.2 = Small Business, Shops, Factories, etc...Not every company can increase (or for Small Business, afford to increase) the profitability per square mile. Some companies, like shops, don't draw direct profit off the land, so increasing Land Usage Efficiency isn't an option for them. This applies to Factories as well.Because Real Estate is only proportionate to Real Estate Value, the amount may not always be proportionate to the income. If income increases, the Estate Value increases, and the increased cost may not be fairly proportionate to the increased profit.For many business, having an Income tax is good because it'll match Income. The cost of a 20% Estate Tax may not fairly represent that Profit, and for many, might overshadow it. An Example is a small Main Street shop, Where the land value is high due to location, not necessarily profitability. As the above shows, Income Tax allows a larger profit as Income increases. For every $10,000 increase, taxes increases by $2,500, leaving a profit increase of $7,500. Real Estate Taxes wouldn't allow for such flawless execution, especially shops and Small Businesses where 20% of the Real Estate value might be larger than the actual Profit. These businesses can't increase profitability per acre, and depend on the taxes to be proportionate to their Income to survive. The average Tax on Property Value is around $1 per $100 of value, or 1%, so it's affordable.3 = ApartmentsWhile Apartments are considered Residential, they are still Commercial Properties, and will be taxed.Apartments depend on Income Tax, because only a set amount is removed from the Income. The idea of an Apartment is to rent out housing at a set price that is usually well below Property Value. People who can't afford the full cost of a Properties Value must rent an Apartment at a more affordable cost. The Apartment will make a long-term profit. The Idea is that the Rent Value is below Land Value, making it more affordable than buying at full Land Value (as no one will Rent a place, paying full Land Value yearly.)Apartments will likely lose out, as they would be taxed on the full value of the Property. The Rent Value is well below 20%. The yearly cost of an $800-a-month rental would be $9,600. The Land Value (including Land and all Improvements, including the House) must be less than $48,000 for a 20% Real Estate Tax to be under Rent Value. It must be much further less for the Rent Value to make up the Tax plus every other cost and paycheck. The problem with the prior numbers is that $800 is slightly above average for Apartments, the actual Land Value will no doubt far overshadow profits.Unless renting cost skyrocket, the Apartments will go out of business. This is bad because now the Government won't get any tax off them (highly counter-productive) and people will homeless. Apartments will simply disappear. Increased costs means no one will live there. They won't go out and get a house (which will likely be more worth the cost) because they couldn't afford it in the first place.This will remove a Trillion dollar industry(1) and leave 35,000,000 people (11% of the Population) homeless. Either that, or the Industry won't be taxed (a major tax loss). You can't tax them with Income Tax and expect the acceptance of other companies.[1] http://www.nmhc.org...4 = UpgradingThe Pro mentioned how companies will Increase the profitability and efficency per Acre... This won't happen.Increasing efficency and profitability per Acre will increase it's Land Value, and thus cost more. Most businesses would find it more profitable to keep the Land Value where it is. Increasing any potentional the land has will simply increase the Value getting taxed, and will become a major expanse for the company, as the increased tax amount may not be proportionately worth the extra Profit.--------------------Land Value = 1,000,000Tax = 200,000Income = 450,000Profit = 250,000Land Value 2,000,000Tax = 400,000Income = 600,000Profit = 200,000--------------------The thing about Income Tax is that it doesn't tax based on the Increased Land Value, but the Increased Profit Value, so the extra Profit is worth it.The problem with Real Estate Tax is that the Land Value will include that same Increased Profit Value, plus the cost of Improvements and the cost of more up-to-date technology. This means it'll increase from Increased Profit Value plus much more, unlike Income Tax which Only increases from Increased Profit Value.This will make many Companies hesitate to advance, as many advancements and improvements will increase the overall cost of Taxes more than it will the Overall Profit.This will stop most of our Economic Growth.This means that if the Tax lowers Land Value, stocks and Real Estate crumple. If the Companies manage to increase Land Value (and Profit), Taxes will likely rise higher than the Profit did. It is likely the Land Value will crumple, and any Improvement or Advancement made afterwards will raise Land Value, thus raising taxes, thus crumpling the Land Value further. The hit on the Real Estate industry and Stock Prices will counter any potentional profit the company hoped to gain.==========================================================For these many reasons, replacing the Income Tax with a Real Estate Tax would destroy property worth, and be harmful to companies who can't increase the Profitability per Acre. This also hurts Apartments and Commercials residents, and will have negative effects on Stock Prices, which is measured by the worth of a Companies Assets, including it's Land.I now pass it on to Pro.