Last week the town of Buford, Wyoming was sold for $900,000. For that price they got an exit from the highway, a small business, some land, and a zip code. With the towns sole resident moving to Colorado… it’s safe to say Buford wasn’t purchased for it’s strong tax base.
The idea that you could buy a whole zip code or even an entire island in this country for the right price got me thinking about our income tax code. There’s a lot of talk about a flat tax or even a minimum tax for the super rich. We all want something that’s fair, and truth be told, we all want to pay as little as possible while reaping massive benefits when we want them.
In reality, we have a system that is exactly like the airline industries baggage fees. We are rewarding people for bad behavior. Airlines charge for bags which forces everyone to cram as much into their carry-on as possible. Then the airlines and passengers complain about overhead baggage space? If they wanted less overhead baggage space they’d make it free to check bags and charge $10 per item for carry-on. Duh.
It’s the same thing with our income tax system. We reward people with deductions for doing things they wouldn’t naturally do just to lower their tax rate.
But what if your tax rate was based solely on where you lived? What if we rewarded people who chose to live in less desirable places with paying the lowest federal income taxes while people who lived places highly desirable or overpopulated paid higher taxes? I mean, if you’re a bagillionaire and you want to pay 10% income taxes… maybe you should live in Yuma, Arizona? But if you want to live on 5th Avenue in a mega-penthouse, that’ll cost you at least 35%.
That way the rich can keep getting richer. They just have to make the holes of America a bit more fabulous.