The Instigator
Pro (for)
0 Points
The Contender
Con (against)
8 Points

Progressive Flat Tax

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Voting Style: Open Point System: 7 Point
Started: 8/15/2013 Category: Politics
Updated: 5 years ago Status: Post Voting Period
Viewed: 1,432 times Debate No: 36725
Debate Rounds (3)
Comments (8)
Votes (2)




I support a gradually replacing the income tax with a 20% tax on the value of all land used for commercial and industrial purposes, excluding residential properties, accrued annually, the value of which is to be determined by a federal, state, or county tax assessor.


I accept.

BOP is on Pro. I will give him the first go at it.
First though, Pro must provide a definition for his statement 'Progressive Flat Tax' as it has everyone rightly confused...
Debate Round No. 1


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?

A land tax is an annual tax based on the estimated value of the land itself, as is determined by various factors such as what it sold for previously, what surrounding property values are, and what similar properties throughout the country have sold for. Some states, counties and municipalities have a similar tax called an "estate tax", (a tax on homes) amounting to 1 percent of the total value of the property you are living on.

This tax would not apply to homes, however, but commercial and industrial property, such as farmland, mountain areas with minerals such as coal or iron, forested areas used for lumber, commercial housing complexes such as apartments and hotels, office skyscrapers, factories, ect.

Implemented gradually this tax could eventually replace the expensive process of accruing income tax, as well as avoid the pitfalls of voluntary reporting. It would increase the value of peoples homes, force businesses to make more efficient use of the land, act as a deterrent to real estate speculation such as what led to the housing bubble, and create a vested interest in owning real properties.


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 Value

The 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 = 1,000,000
1% = 10,000
20% = 200,000

Land Value = 750,000
1% = 7,500
20% = 150,00

Land Value = 500,000
1% = 5,000
20% = 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 = Apartments

While 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.


4 = Upgrading

The 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 = 1,000,000
Tax = 200,000
Income = 450,000
Profit = 250,000

Land Value 2,000,000
Tax = 400,000
Income = 600,000
Profit = 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.
Debate Round No. 2


KBattleson forfeited this round.


Arguments Extanded :)
Debate Round No. 3
8 comments have been posted on this debate. Showing 1 through 8 records.
Posted by hatshepsut 3 years ago
Mistitled - a real estate tax was proposed.
Posted by KBattleson 5 years ago
People will still require land to produce goods, no matter what the tax rate is. We still need farmland to farm, factories to manufacture, lumber to mill, ore to process. A land tax will simply result in the land being driven down in price to the costs of production, instead of its hyper inflated values that have been created by endless loans and subsidies at astronomical interest rates banks charge to levy capital.

The same thinking might be applied to home loans and residential estates, though collapsing that bubble would have far more unintended consequences than collapsing the commercial real estate bubble.

You say taxing land will result in the land becoming worthless. If we tax labor instead, then shouldn't our labor become worthless as well? Our labor still has utility, as does land, all taxation does it drive up costs. A man that would otherwise be paid 60,000 dollars a year now has to be paid 80,000. Employers eat the costs, one way or another.

If anything, it would drive the price of land up, (after an initial dip) especially if it were implemented gradually, or as an tax option allowing businesses who own land to substitute land tax for income tax.
Posted by KBattleson 5 years ago
I do not think this proposal is quite so foolhardy as it might appear at first glance. Give it a second read, really think about it, and tell me what you think, and if you think you are up to it, tell me why it won't work.
Posted by KBattleson 5 years ago
If you cut everybodies salary in half, but doubled the number of goods and resources in the world, would we be richer or poorer?

Think carefully before you answer.

Holding companies could simply demand higher prices on their lease, which businesses could in turn pay for with by paying lower wages. Employees wouldn't mind, because they would still be getting paid the same amount of money they would after paying their income tax.

lets take a simple example.

say you have a small business that owns commercial property assessed at 1,000,000 dollars. it has 10 employees who make 80,000 dollars a year. These employees pay, after personal deductions, about 25% of their salaries per year in income tax.

That business would instead pay 200,000 dollars in property taxes per year. It would simply pay its employers 60,000 dollars per year instead of 80,000. The employees would still make the same amount of money they were before, because they no longer have to pay any income tax.
Posted by RoyLatham 5 years ago
He has to mean "progressive" in the sense of leftist, as a flat tax has no progressive rate. A high tax on land would result in land becoming almost worthless. Tax receipts would collapse.
Posted by Naysayer 5 years ago
I think he means progressive as a defined word, not a political philosophy.
Posted by InVinoVeritas 5 years ago
There's nothing particularly progressive about it.
Posted by SitaraForGod 5 years ago
How is a flat tax progressive? I myself support a 20% flat income tax.
2 votes have been placed for this debate. Showing 1 through 2 records.
Vote Placed by Mikal 5 years ago
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Total points awarded:07 
Reasons for voting decision: This may seem like its a vote bomb, but it is not. Con just flat bulldozed this debate. Offered contentions to everyone of pros statements, made his arguments easy to understand and presented it well. Had better spelling and also gets conduct due to FF. This was literally one sided.
Vote Placed by rajun 5 years ago
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Reasons for voting decision: I am not cool with such debates. Just that Pro forfeited... Undeserved tie, so one to con