Dear Editor,

Carl Milsted in "Towards a Truly Progressive Tax System" has a good proposal in reforming taxes to wealth in the form of real estate.
He should go further to exempt buildings from the tax on base it only on the land value, so that there is no disincentive to improvements.

But his proposal to tax the value of corporations is flawed. First, there are also businesses that are not corporations. Second, a firm making no profits would have the burden of paying a tax that would put it deeper in debt. But worst of all, this taxes investment and production, creating the deadweight loss of less of both.

He then wants to combine this with a national sales tax, which inflicts a further excess burden. Why not instead tax bad things, such as pollution and traffic congestion? Government can get sufficient revenue from user fees, land rent, and charges on pollution and congestion.

Fred Foldvary
Berkeley, California