Having said what he had to say about taxes on rent and profits, #AdamSmith pauses, now, for an appendix to handle the taxation of the land and stock that generate rent and profit. (V.ii.h) #WealthOfTweets #SmithTweets
Dear readers, we hope you are tax nerds. (We still and forever ❤ you, nerds.) @TurboTax @IRSnews @HRBlock (V.ii.h) #WealthOfTweets #SmithTweets
Taxing the revenue generated by land or stock doesn't diminish the ability of that land or stock to generate revenue. But taxing away a portion of the revenue-generating property does. (V.ii.h.1) #WealthOfTweets #SmithTweets
This taxation generally happens when property is changing hands. Especially where the sale is conspicuous, as in the case of lands and houses or when someone dies. In these cases, the transaction can be taxed directly. (V.ii.h.2) #WealthOfTweets #SmithTweets
Here are some ways that you can tax these things:
- Directly in the case of conspicuous transactions
- Stamp duties (papers for transactions must be stamped to be valid)
- Duties for a required public record of the transfer
(V.ii.h.1–2) #WealthOfTweets #SmithTweets
Sometimes the tax varies based on the relationship between the deceased person and their heirs. (V.ii.h.4) #WealthOfTweets #SmithTweets
This makes sense, says Smith: the death of a father whose children live with him makes them poorer. But inheritance by adult children with their own households increases their fortune. (V.ii.h.4) #WealthOfTweets #SmithTweets
Land transfer taxes were a major source of revenue for the government under feudal law, but they were also onerous. (V.ii.h.5–6) #WealthOfTweets #SmithTweets
In Britain, stamp duties in Smith's time depended not on the value of the property being transferred but on the type of deed being written (this would make them unequal). Britain didn't have registration duties. (V.ii.h.9) #WealthOfTweets #SmithTweets
Even though stamp-duties and registration duties are new, they're pretty universal. Why? "There is no art which one government sooner learns of another than that of draining money from the pockets of the people." #SmithSnark (V.ii.h.12) #WealthOfTweets #SmithTweets
(That might be our favorite #SmithSnark)
"There is no art which one government sooner learns of another than that of draining money from the pockets of the people." #SmithSnark (V.ii.h.12)
There's no way around inheritance taxes falling on the heir. But Smith thinks it's worth asking on whom the burden of the tax for other property transfers falls. (V.ii.h.13) #WealthOfTweets #SmithTweets
People selling property almost always *have* to sell, while buyers rarely *have* to buy. It's easy to imagine that the burden of the tax falls on the relatively privileged seller, which makes these taxes crueller and more oppressive. (V.ii.h.13) #WealthOfTweets #SmithTweets
[We, the SmithTweeters, are looking in vain for the heartless, greed-driven, ruthless capitalist Adam Smith that we've heard so much about.] (V.ii.h.13) #WealthOfTweets #SmithTweets
Taxes on transferred property enrich the government at the expense of the people who would otherwise use that property to make the country richer. They're an "unthrifty" tax. (V.ii.h.14) #WealthOfTweets #SmithTweets
Also, taxes on property transfers are unequal...though they do meet the other three maxims of good taxation. (V.ii.h.15) #WealthOfTweets #SmithTweets
Duties on registration are badly abused in France. The officers who administer them extort the farmers. It doesn't have to be this way with these taxes, but in France it was. (V.ii.h.16) #WealthOfTweets #SmithTweets
Not all duties of registration (even when they're not French and corrupt) are created equal.
Registered mortgages are good for everyone.
Forcing the registration of every transfer of property would be bad for everyone. (V.ii.h.17) #WealthOfTweets #SmithTweets
The credit and the security of private individuals ought never to be trusted to the "probity and religion of the inferior officers of revenue". #SmithSnark (V.ii.h.17) #WealthOfTweets #SmithTweets
Even public harm, cruelty and oppression, the ruin of private investors, and the corruption of officers aren't likely to stop the government from multiplying these sorts of taxes, though, if it depends on them for revenue. (V.ii.h.13) #WealthOfTweets #SmithTweets
We, the SmithTweeters, are starting to think that Adam Smith was not an especially big fan of these sorts of taxes. (V.ii.h.13) #WealthOfTweets #SmithTweets
There are a bunch of things called stamp-duties that are not the types of stamp-duties Adam Smith has been talking about today. They are, properly, taxes on consumption. We'll get to those tomorrow! See you then! (V.ii.h.14) #WealthOfTweets #SmithTweets

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with @AdamSmithWorks

@AdamSmithWorks Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @adamsmithworks

4 Mar
#AdamSmith! #WealthOfNations! #Taxes! He's still going!
Today, at long last, we come to
consumption taxes!

We, the SmithTweeters, realize we've really built this up. (V.ii.k) #WealthOfTweets #SmithTweets
But! There's a lot of good stuff in here! So once more into the breach, dear Smithketeers...

Smith divides consumable commodities into necessaries and luxuries. (V.ii.k.2) #WealthOfTweets #SmithTweets
Smith includes in necessaries not just what's needed for physical survival, but what's required by common decency in a given society at a given time. He uses the examples of linen shirts and leather shoes for British working class men. (V.ii.k.3–4) #WealthOfTweets #SmithTweets
Read 22 tweets
3 Mar
#AdamSmith, #WealthOfNations, and #Taxes. There's a lot here. Will it ever end? The only way to find out is to keep reading!
Today: taxes on wages and head taxes. (V.ii.i–j) #WealthOfTweets #SmithTweets
Spoiler alert: #AdamSmith did not like "absurd and destructive" taxes on wages.
[We, the SmithTweeters, are taxed not on our wages, but per tweet. Still waiting for Smith to get to tweet taxes.] (V.ii.i) #WealthOfTweets #SmithTweets
Wages are set by the demand for labor and the cost of living. Taxes can therefore only raise what laborers must charge hourly. They can't go without necessities. They're necessities. (V.ii.i.1) #WealthOfTweets #SmithTweets
Read 24 tweets
1 Mar
#AdamSmith's thoughts on taxation: They are numerous, and outlined in detail in #WealthOfNations. Today we'll be looking at taxes on profit! (V.ii.f–g) #WealthOfTweets #SmithTweets
Smith starts out by reminding us that profits are divided into the part that pays the interest and the part over and above that which pays the interest.

You can't tax the over-and-above part directly. (V.ii.f.1–2) #WealthOfTweets #SmithTweets
Over-and-above paying the interest might sound like it's extra money, but it's not! It compensates the owner of stock for things like risk and trouble. If you tax away this profit, the owner of the stock won't employ it productively. (V.ii.f.2) #WealthOfTweets #SmithTweets
Read 28 tweets
28 Feb
Ready for more of #AdamSmith's thoughts on taxes from #WealthOfNations? Sure you are! (V.ii.e–h) #WealthOfTweets #SmithTweets
Taxes upon rent can also fall upon the rent of houses! House rent isn't like regular land-rent, though. It's split into two parts: the building-rent and the ground-rent. (V.ii.e.1) #WealthOfTweets #SmithTweets
Building-rent is really just the profit of the person who builds the building. Like all profit it's regulated by supply, demand, and the interest of money. (V.ii.e.2) #WealthOfTweets #SmithTweets"
Read 22 tweets
27 Feb
It's here! It's finally here! The (first) day #AdamSmith talks about taxes in #WealthOfNations!

We're assuming there's a group for whom this is exciting. We, the SmithTweeters, may not count ourselves among them. But let's go anyway! (V.ii.b) #WealthOfTweets #SmithTweets
Remember how Smith divided private revenue into rent, profit, and wages in the first book? Now he's gonna divide up taxes. Smith loves a good subdivision. Taxes can fall on:
1) Rent
2) Profits
3) Wages
4) All three indifferently. (V.ii.b.1) #WealthOfTweets #SmithTweets
He'll be dividing up three of these into further subdivisions, obvs. (V.ii.b.1) #WealthOfTweets #SmithTweets
Read 27 tweets
26 Feb
Now you know all the things #AdamSmith has to say about what the government should spend money on. But that money's gotta come from somewhere. What does #WealthOfNations say about how governments should get money to spend? (V.ii.) #WealthOfTweets #SmithTweets
I know the tax nerds have been waiting for this chapter (we ❤ you, nerds), but first Smith wants to talk about other sources of revenue "which may peculiarly belong to the Sovereign or Commonwealth". (V.ii.a) #WealthOfTweets #SmithTweets
IOW, before we get to taxes we've gotta cover businesses run by the sovereign (like the post office), public banks, public lending, and revenue from public lands.

But don't worry, we can do that pretty quickly...ish. (V.ii.a) #WealthOfTweets #SmithTweets
Read 17 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!