I'd like to get some feedback / thoughts / discussions about an idea which I kind of wonder why (as far as I know) nobody in politics has tried to bring up / implement yet:
Why don't we finance states by taxing property instead of income?
I mean I think I know why: It was easier to tax income instead of property in the pre-electronics era and states are the biggest social structures with the most inertia we have.
But nowadays it should be fairly simple to tax at least the two most important property types: land & stocks.
Lands are easy to tax because most modern states have a central register (cadastre) where buying and selling of land needs to be reported along with the price paid. Many states tax the sell, but not the owning of land.
Stocks are easy to tax since they are traded electronically worldwide and banks have already tons of required reporting to do in most states. Wouldn't be a biggie to add another reporting requirement telling the state who bought which amount of stocks form whom for which price.
I think this model of taxation would have huge benefits over the currently established one, because:
1.) Taxing income stifles the economy. There's lots of services that simply aren't provided / consumed in some countries since the in some states up to or even over 50% added taxes on them are to expensive.
2.) Taxing income instead of property hinders hard-working people to get richer and makes it easy for the rich to stay rich without contributing to society. Which in turn ensures / increases the huge difference in economic power between rich and poor. Which especially in times of economic hardship may lead to civil unrest which in it's extreme forms can lead to societies collapsing.
3.) The huge difference in economic power from point 2. endangers even the most stables democracies today, because with today's importance and state of social networks the rich can simply buy enough influence on them to manipulate election outcomes to fit their needs.
To ease property taxes impact on the population a big portion of taxes on property of natural persons could be replaced by inheritance taxes. Though to keep things fair for natural persons that don't have the know-how and riches to create legal person (like companies) those legal persons need to have property taxes that accumulate to at least the same percentage as inheritance taxes for natural persons over the average live span of natural persons. (since legal persons have the advantage of not dying, at least not with any property left to put taxes on (bankruptcy..))
A few states have inheritance taxes and or property taxes in place today but as far as I can tell they only make up a tiny fraction of their budgets. I think they should mostly replace VAT, income tax and income tax in disguise like national insurance.
I'd like to NOT mix up this proposal with discussions about how big state budgets should be. That in my mind is a completely different question than what taxes should be collected to finance those state budgets independently of their size.