Voluntary taxation

[Captain Chaos]

A major issue for Libertarians (which seems to be the dominant political belief on this site) is the idea of government obtaining its money through forced taxation.

So, my question is this.


Is there a method of voluntary taxation? I know lotteries are considered one method - not sure I'd want to run a state or federal government on lotteries. Are there any other methods of voluntary taxation?

[Autolykos]

As I define taxation, it inherently involves force. So, no, there can be no such thing as "voluntary taxation" -- it would be an oxymoron. If it wasn't, then one could call e.g. paying for a burger at McDonald's "voluntary taxation".

- Rob

[bishop]

to some degree, sales tax is voluntary taxation.. you could always choose not to buy something and not pay the taxes..

my state usually has a sales tax holiday every year, and it's amazing how much people buy on those days.. they abstain from spending this money the other 364 days of the year - and perhaps it could be due to the sales tax.. myself, i'm looking to buy a big hdtv and some new furniture, but i'm probably going to wait until the tax holiday comes around.

[Captain Chaos]

Hmmmm

Here is definition #1 of 'tax' from dictionary.com:

Quote by: dictionary.com A contribution for the support of a government required of persons, groups, or businesses within the domain of that government.

It would appear that force is, indeed, implicit in taxation.


So, OK - the phrase voluntary taxation would have to mean something else...

How about this - can a government function through a combination of earned income, and voluntary contributions?

[Autolykos]

I guess that would depend on what said government wanted to do.

By "earned income", I take it you mean the provision and sale of goods and/or services? And "voluntary contributions" would mean something like charitable giving?

- Rob

[Autolykos]

Quote by: bishop to some degree, sales tax is voluntary taxation.. you could always choose not to buy something and not pay the taxes.. my state usually has a sales tax holiday every year, and it's amazing how much people buy on those days.. they abstain from spending this money the other 364 days of the year - and perhaps it could be due to the sales tax.. myself, i'm looking to buy a big hdtv and some new furniture, but i'm probably going to wait until the tax holiday comes around.

On the part of consumers, that's true. The sales tax is voluntary. However, business owners do not have that luxury. They must pay the part of their revenues that falls under the sales tax to the state and/or local governments. Otherwise, they go to jail, forfeit their assets, etc. So it's easier for consumers like you and I to not feel so bad about sales taxes, because they do not hit us directly. Business owners, on the other hand, have more direct experience with them.

Divide et impera, anyone?

- Rob

[lsbskins1]

Captain Chaos-
Don't surrender just because some people have to be coerced." We" (American voters of the past) voted for people who proposed taxation that was legislated and we did not withdraw support for those people who proposed and supported those measures. That is a form of majority acceptance. If you need 100 % voluntary compliance, you have an impossible standard. An impossible standard should not set the terms of acceptability, nor determine the definition of "voluntary taxation". Would you say that because some people want to commit suicide that you can not define "life" as a condition people voluntarily accept?

[lsbskins1]

On a more crass note, I would just like to point out that everyone has to be coerced into not shitting in their pants. Does that make the coersion "bad"?

[Captain Chaos]

Don't surrender just because some people have to be coerced

I am not so set in beliefs. I am, in fact, very willing to be persuaded. I just need that persuasion to be rational. Really rational, not pretend rational.

So, if government can actually function, to the degree that I want, by gathering money through contributions and fees for services - then I would be willing to explore such a concept.

The thing is, I see mostly wishful thinking here, not practical reality. I have a feeling such a government would leave lots of people dirt poort, with no practical means of escaping poverty. That would suck.

So, I am interested in the idea, as long as it can earn enough money to support sufficient services to ensure that people are empowered.

[bishop]

Quote by: lsbskins1 On a more crass note, I would just like to point out that everyone has to be coerced into not shitting in their pants. Does that make the coersion "bad"?

heh.. good one!

[leftcider]

Quote by: lsbskins1 On a more crass note, I would just like to point out that everyone has to be coerced into not shitting in their pants. Does that make the coersion "bad"?

Libertarians don't argue that coercion in parent-child relationships, or other private relationships, are always wrong, just that they don't need to extended (or should be minimized) between the individual and the state.

[GodBlessAmerica]

Quote by: Captain Chaos A major issue for Libertarians (which seems to be the dominant political belief on this site) is the idea of government obtaining its money through forced taxation. So, my question is this. Is there a method of voluntary taxation? I know lotteries are considered one method - not sure I'd want to run a state or federal government on lotteries. Are there any other methods of voluntary taxation?

Haven't you ever heard of BONDS before?

A Bond is a tax.

When you buy a new home, there are usually some bonds attached to make roads and schools that you have to agree to. (That I find reasonable to serve your home)

Then there are the endless bonds that mostly liberals/leftists try to shove down the people's throats with deceptive commercials that many citizens often too stupid to vote NO ON!

Vote no on all bonds.

[lsbskins1]

Quote by: leftcider Libertarians don't argue that coercion in parent-child relationships, or other private relationships, are always wrong, just that they don't need to extended (or should be minimized) between the individual and the state.

Really, did you think this was something that I could not "deduce" on my own? Or, is it that we are both having trouble detecting each other's tone? When you read the pants shitting quote, you should have injected lots of smarmy, smartassishness. But then, there is also the fact that I was addressing Rob, who takes absolute stands. He says taxation is wrong BECAUSE it is obtained through coersion. I was simply pointing out that coersion of a behavior can be beneficial to all concerned. I was responding to the absolute of his stance, not judging the stance of every libertarian or even any other libertarian. Mmm-K?

[zynner]

Quote by: Captain Chaos Is there a method of voluntary taxation?

Generally speaking, libertarians are willing to concede taxation but want to uphold the principle that any taxation is force. So, they tend to look for the least coercive means.

That starts by making the government as small as possible. For example, if the US government only served two functions, military and courts, and the military were only for national defense, then the entire US budget could be brought down to about $100 billion per year. The indirect taxes collected from duties on imports would probably pay the bill. Yes, it could be argued that even that is coercive, but you have to keep the entire libertarian platform in context: a very small government, for the purpose of maximim liberty for all.

Such a government would have no power to initiate wars. It would have no power to give corporate welfare to big business. Most of the problems that people think of as "free market" problems are really big government assisting big business. Libertarians see such a small government that it could not hand out favors. In such a society, businesses would most likely tend towards smaller companies. The mega corporations exist mostly because they are granted quasi-monopolies of sorts by big government politicians. Such would not be the case with a very small government.

Now, to answer your question, the nearest form of taxation to a true volunteer tax that I have seen was proposed by Ayn Rand. It is a voluntary tax on contracts.

First, the context. This would be a government that only served the functions of military, police and courts. Each individual would be free to pay taxes or not. However, if a person choose not to, then they would not have access to the courts. You would file a lawsuit against someone or be a defendant and you would be denied your hearing if you had not paid the tax. It's voluntary to pay, but you have to pay to get the benefits. Some people might not pay. There is a "free rider problem" in this. But it is beside the point: Enough people would be self-interested in paying that the system would function fine and, as a practical matter, everyone would actually end up being covered.

For example, you go into a bank and open a savings account. Picture the little guy against the big, bad corporate bank. But remember, the government is small and cannot give the big, bad corporate bank any favors. It is not a government bank. It is a private business, just like a grocery store. When you open a bank account, you sign some forms. Those are contracts. The parties to that contract could choose to pay a tax and have their business relationship covered by the courts -- or not. You can bet that the bank would require it, as a condition of opening an account for you. So, a tax would be paid on just about every transaction, except maybe private agreements between close friends or family members.

The United States gross domestic product is roughly $12 trillion each year. It's not a perfect measure of total sales and transactions, but use it as an example. If there were $12 trillion in transactions, then to raise $100 billion in taxes for the federal government, each transaction (which always includes a contract of some sort) would require a tax rate of less than 1%.

Furthermore, there are far more transactions than that. Conceivably, you could run all government taxation from the state level on a grand total of less than 5%, with the states sending their respective portion to the feds (through the constitutionally-specified process of apportionment).

In reality, nobody would be forced to pay directly, though at least one party to every contract would likely insist on it. It would ultimately be so small that it would just get absorbed into the cost of doing business.

Now, such a small government might seem inconceivable to some. But you have to ask: What do you really get for all those taxes?

The feds are paying more and more of their outgo on interest on the national debt, which is past spending. They spend a ton on a military that goes around the world making enemies. Wouldn't it be better to live in peace? Only 12% of the federal budget actually goes to all those government programs people scream about, other than the big chunks that go to Social Security and Medicare.

The current system has us paying: 0-35% income tax, plus 15% FICA tax, plus 7% sales tax in many places, plus 1-2% property tax most places, plus higher prices on goods and services to pay up to 35% to corporations for their income tax (they have to pass on all costs to their customer, including taxes), plus corporate taxes, plus federal and state gasoline taxes, plus those import duties on foreign goods, plus telephone taxes, etc., etc., etc. What if all of that were reduced down to a total of less than 5%? Don't you think the private sector could figure out a retirement system and health care system better than the bankrupt ones the government has given us? Don't you think we could do without the feds paying farmers to not grow food? Don't you think we could do away with NPR? Don't you think we could do without the feds giving money to churches? Couldn't we do without pretty much everything the feds do, other than a good national defense and court system? The schools don't get any better with more government involvement. Ditto government retirement plans, drug wars, education, etc.

And in the transition period, there is a way to protect current receipients of Social Security, too, through annuity contracts. But for now, just consider a tiny government with tiny taxes that are really voluntary. And the private sector flourishing to provide for the needs and desires of everyone. No corporate welfare. Less class warfare. Lots and lots of benefits to a smaller government.

It's called: LIBERTY.

~ zynner

[Autolykos]

Quote by: lsbskins1 Captain Chaos- Don't surrender just because some people have to be coerced." We" (American voters of the past) voted for people who proposed taxation that was legislated and we did not withdraw support for those people who proposed and supported those measures.

Again, that "we" must be exclusive here, for I am surely not included in it. For the record, I have never voted thus far.

Quote by: lsbskins1 That is a form of majority acceptance. If you need 100 % voluntary compliance, you have an impossible standard.

Yes. It means that it's next to impossible to maintain a "voluntary State", as the voluntary part means that one would be free to dissociate himself from the State apparatus without fear of reprisal by that State. Then again... that's my point.

Quote by: lsbskins1 An impossible standard should not set the terms of acceptability, nor determine the definition of "voluntary taxation". Would you say that because some people want to commit suicide that you can not define "life" as a condition people voluntarily accept?

Until they take action to end their lives, life is rather involuntary -- that is, the processes of life go on unhindered otherwise.

- Rob

[Autolykos]

Quote by: lsbskins1 On a more crass note, I would just like to point out that everyone has to be coerced into not shitting in their pants. Does that make the coersion "bad"?

It is the initiation of force that I consider morally wrong. Also, while we're on the subject of toilet training, it seems to me that there are readily non-coercive methods for achieving it in children.

- Rob

[Captain Chaos]

It is the initiation of force that I consider morally wrong.

So, what I am asking is, could government function by collecting taxes through donation, rather than coersion?

[grandpa]

Quote by: Captain Chaos So, what I am asking is, could government function by collecting taxes through donation, rather than coersion?

If one of the functions of government is to
insure peace (which is about a big a lie as one can find), then yes, it could use peaceful means of being funded.
And, more broadly, anything can work if it's do-able and an effort is made.

I've discussed this idea before in my voluntary line-item taxation thread, BTW.

Grandpa h.

[Captain Chaos]

I have my doubts about viability...

However.

The Red cross functions.
Humane societies function.

These organizations fulfill a roll that government would otherwise have to take. And, they do it through donation.


The problem is this. Such a method allows for free-riders. Some people will donate, because they want services. Others will not donate, because they want to use those services without paying for them.

This system essentially forces some people to pay for others.

Is that ok?

[zynner]

Quote by: Captain Chaos I have my doubts about viability... However. The Red cross functions. Humane societies function. These organizations fulfill a roll that government would otherwise have to take. And, they do it through donation. The problem is this. Such a method allows for free-riders. Some people will donate, because they want services. Others will not donate, because they want to use those services without paying for them. This system essentially forces some people to pay for others. Is that ok?

You might find this article interesting:

http://www.lewrockwell.com/rockwell/...aldefense.html

A couple of other points:

(1) We have free riders now -- lots and lots of them! So, it's not like we are talking about taking on free riders that we don't have now. Rather, we are talking about reducing the number of free riders by shifting how it's done.

(2) While a purist would like to eliminate the free rider problem as a philosphical principle, I think you will find that the free rider problem is largely a myth when put into actual reality. For example, if I own an apartment building, I will want fire protection for it. It will be built into the cost of the rent (just as taxes are today), so the renter and landlord will both pay. Is someone getting a free ride? And if parametics is part of any privately-owned fire department, membership in which is required by any insurance company, which in turn is required by any lender on any apartment building, is there really a free rider anywhere? It is all absorbed into the cost that everybody pays -- voluntarily. Nobody is forcing that landlord to buy that property or get that loan. And nobody is forcing that renter to rent it. But each benefits by choosing to do so. And all aspects of those decisions will have to be factored in, such as whether or not the strings attached (having insurance, fire and paramedics service) are worth it. Plus, if all land is privately owned, then even those homeless people who eventually find a kind soul to allow them to sleep on their back porch are protected by the insurance/fire/paramedics/hospital/whatever policies the homeowner has.

Bottom line: the free market will work all this out. No one person or central agency (aka: government) can possibly do it as efficiently as individuals working in their own best interests can.

~ zynner