My take on double taxation is that we are taxed once by the landowner for the benefits owing to location of a house (good transport connections, shopping facilities, schools, nice parks, etc.,) in addition to the taxes the government took off us to finance these public improvements.

This issue is connected with social justice, economic rent, resource taxation. How are these connected?

Think of what happened around the Jubilee (underground) Line Extension in London.

The government spent about three, or four or five billion pounds of our taxes to build it.
The result was that property values increased by about thirteen billion (conservative estimate). This has to be paid by new buyers to the sitting property owners who did nothing to produce this increase in the vale of their property.

These aspects of economics do not usually figure in discussions of economics in general. Yet these are the issues which hit everyone in a very practical way, whether they are interested in economics or not.

Lots of down votes :-(
Maybe what was expected was a write up on double taxation as understood by investors. That is, taxing the same earnings two levels, like paying income tax, then a tax on any interest earned by the income if saved.

My contention is that the government is obliged to take part of people's earned income, because it does not take the unearned increase in the value of common resources in private use (building land, in this context) as its legitimate income.
So double taxation, in the conventional sense, is just an effect of bad tax policy. Making it an issue is diverting attention from the underlying problem. Society needs government; government has to be funded; government has no money to cover its expenses and has to raise it from the citizens it is supposed to serve.

How governments finance their legitimate activities is a crucial branch of economics. Unfortunately, most modern taxes have serious negative side effects (dead weight effects) on usful economic activity:

  • if full employment is a good thing, why tax firms for employing people;
  • if we want people to work, why tax their wages;
  • if saving is a good thing, why tax interest earned;
  • if consumption is necessary for a buoyant economy, why increase the price of goods by nearly twenty percent;
  • etc.;
  • These questions may seem naive to conventional economists; but they are actually prompted by understanding economic laws from a viewpoint that is not blinkered by outdated theories which have been discredited by real economic life time after time in the past two hundred or so years.

    In fact, most modern taxes offend against the last two principles in the taxation write up. Current taxation policies "discourage the creation of wealth or taxpayer's work efforts", and "act as a disincentive to saving or investment".

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