Solving Problems
They do it in Texas and Pennsylvania and other states. In Texas, they have no state income tax, but higher property taxes. About 15 cities and districts in Pennsylvania reduce the levy on improvements such as homes and buildings and slightly increase the fee on land which encourages landowners to use their land more wisely and put it to use which helps affordable housing and increases development. We can’t do anything quite like that in California right now because of Prop 13, but Prop 13 is not perfect and can be improved.
Nobel Prize-winning economist Milton Friedman calls this the “least bad tax.” In San Diego, the Port of San Diego is an example of collecting ground rent, a variation on this theme. It works very well. Alaska also provides a powerful example of reducing taxes on production, labor, and income. It eliminated state income taxes entirely and on top of that pays Alaska residents about $1,500 per year ($1,600 in 2018)—a kind of reverse income tax. They are fortunate to have substantial oil revenues and a population of only 738,068 (in 2018).
Nobel Prize-winning economist Milton Friedman calls this the “least bad tax.” In San Diego, the Port of San Diego is an example of collecting ground rent, a variation on this theme. It works very well. Alaska also provides a powerful example of reducing taxes on production, labor, and income. It eliminated state income taxes entirely and on top of that pays Alaska residents about $1,500 per year ($1,600 in 2018)—a kind of reverse income tax. They are fortunate to have substantial oil revenues and a population of only 738,068 (in 2018).