Here’s an idea of where the government can make more revenue: tax other layers of government.

Right now, state and local government enjoys paying zero taxes on property and buildings it owns, on energy it consumes, on facilities it operates. City halls, government buildings, prisons, parks, even enormous the beautiful buildings owned by the police and owned the Pentagon are currently untaxed. There is an enormous amount of government property that should be taxed, but currently isn’t — because of antiquated laws that prohibit government from taxing other layers of government.

Imagine for a minute if the State of New York was required to pay both local and federal taxes on the Empire State Plaza. For one thing, such a lavish building complex would have never been built. But even if was built, they would have used much cheaper materials, to avoid paying so much in local and federal taxes. Likewise, imagine if the City of Albany had to pay state and federal taxes on City Hall — it would have been long ago sold off to private developers — who would turn this beautiful old building into a hotel, conference center or dinning hall. Government would move to an efficient, non-descript building in a lower-cost part of the city.

Likewise, imagine if the City of Albany had to pay state and federal income tax on fines, property tax payments, other forms of revenue. The City of Albany would likely find it necessary to cut services, and find economies — as they would be making less money on each dollar they brought in. Yes, local property taxes and fines might increase to cover some of the cost of paying taxes to other levels of government — but also local government would shrink. Correspondingly, the state and federal governments could cut their taxes, because the federal and state governments would be collecting income tax on the city’s fines, taxes, and other sources of revenue.

Taxes are a proven method of reducing spending. At first it might seem silly for government to tax each other layer of government, but taxes on government spending will discourage more government spending, leading to a smaller, more efficient government. No more lavish government buildings, no more lavish spending on politicians or bureaucrats, just a government that is a lean servant of the people. The more you think about it, taxing government could not only lead to more revenue, but also less government.