Friday, January 27, 2006

Taxation Justification

Head over to The Free Liberal to see the mess that inspired this.

The issue at hand: is any level of taxation justified?

One thing I think we can agree on is that, for the most part, taxation is unavoidable. As they say, "The only things certain in life is death and taxes," to which I might add my own corrollery, that attempting to avoid taxation entirely speeds one on to the former condition, whether it be death by tax collector or death by uncontrolled thuggery. You're going to have to pay someone, whether it be the mob boss down the street, your own private security service (which you then have the opportunity to use to become the aformentioned mob boss), or the government tax man. In reality, it comes down to who you would rather pay... and I would argue that there are merits and downsides to all three of the possibilities I presented (not to mention the many that I did not).

However, that isn't the question. Taxes may be unavoidable, yes, but is any level of taxation justified? Every libertarian knows the argument (whether they like it or not). All taxation ultimately comes via the barrell of a gun: pay up or else, is the mantra of the taxman. Indeed, the protection money demand made by a gangster has the advantage of being honestly presented. Taxation is, in itself, a form of theft, though it's a form of theft most people are content to live with, given the alternatives.

However, I argue that it doesn't have to be that way. There are many places where "taxes" can be collected in such a way that, even though a demand is implied, the demand is generated in response to a wrong committed by the class doing the paying, or by a service provided that can only be provided by government. I will list a few types of taxes I think are justifiable.

Land Taxes

For me, this is the primary kind of taxation I think our government ought to be engaged in: taxation based upon land deeds. The reason for this is simple: land deeds are a "right" that is created by government. For while a man may have a right to his home, no man has an absolue right to control over acres and acres of land which are not his home; which, in some previous generation, was somebody else's home, wrongfully stolen from him. This is a right created by the government because it is advantageous to do so. The support of the farmer is greater than the support of the herdsman or hunter whose rights you violate by protecting him. The support of the real estate developer is even greater still.

The government registers land deeds. The government enforces land deeds. Therefore, the government has every right to be compensated for this service. And if the government is not compensated, the government has every right to cease providing said services; ie. to erase the land deed, and to stop protecting the owner from squatters and tresspassers.

Now, I offer this with the caveat that I believe that, to a certain extent, people ought to have the ability to choose their own governments. And I don't just mean people ought to be able to elect the rulers; I mean people ought to be allowed to secede from unsatisfactory governments in a regular and orderly fashion--and take their land with them. I don't think even government ought to be a government-created monopoly; a competitive market could keep the prices at an acceptable level.


Here is another thing I think is justified. Another service the government provides for us is the border, by which it protects us from the chaos caused by the unwise choices of other people's governments. We expect them to keep out terrorists, drug dealers, foreign criminals, and, of course, foreign military forces. I see no reason the government cannot charge those that choose to cross that border for the business they do as they cross it. The more pourous the border, the better conditions are for business; however, the more difficult it is for the border patrol to do their job. The government ought to be directly compensated for such crossings, assuming we expect them to police the borders in the first place.

Again, if we expect the government to defend our borders, they have every right to compensation for that service. Now, it would be nice if someone could come up with a way of allowing market forces to influence the level of compensation that occurs. At the very least, regular and orderly secession practices should be established.

Pollution Taxes

Imagine someone went up to your house and stuck a hose in through the window. Imagine further that they then began pumping green paint in through that hose, ruining your carpet. You would expect the courts to force them to pay the cost of replacing the carpet, and rightfully so.

Imagine further that instead of pumping paint, they pumped toxic gasses into your house. Your best friend (the dog) died as a result. You would likely expect considerably greater compensation.

Now imagine that instead of lethal levels, they instead pumped in levels of pollutants over years of time that caused your child to have a case of asthma he would not have otherwise had. Would you expect them to pay the medical bills that resulted?

Simply put, polluters profit at the expense of people that have to use the resource they are polluting. And while clear-cut localized pollution can be handled by existing legal procedures, the more dispersed and general kinds of pollution (air pollution, for example) cannot be. That would be one *serious* class action suit, and inhumanly expensive.

Instead, polluters ought to be charged directly for their use of our air, water, or whatever as a repository for their byproducts. Just as you (or SOMEBODY) has to pay the dump for the dumping of solid wastes, polluters should have to pay the air district for the dumping of their byproducts. Preferably, it ought to be charged by that level of government which is closest to both the offender and those offended. For example, if most of California's Central Valley's air pollution is produced in the Valley itself, it ought to be an agency created for, of, and by the people of the Central Valley that does the charging. That way, we can make our own decisions as to the trade-offs: clean air, economic development, economic compensation, enforcement costs.

If there's a whole lot of pollution coming from another specific air district, such that it can be proven in a court of law, then regular legal procedures can be used to address that issue, district to district.

If the case for global warming ever goes beyond the politically-motivated house of cards it presently is, I could even support a general tax on carbon-based fossil fuels. (I can already support the taxation of their use by cities, where the concentration of the associated pollutants is already a nuisance at best, a hazard at worst.) The best thing about this tax is it would be collected at a very minimal set of locations: wellheads, mineshafts, and ports of entry. The taxman wouldn't have to be peaking into everybody's business in order to collect it.

Representation By Contribution

This isn't so much a form of taxation, as an alternative to taxation I think would solve more than just the coercive taxation problem. It could solve a whole host of problems, as I've described before. (If you want to read something more current regarding monetary corruption in government, go here.) Since I have, I'll touch on the basics, and a few more observations about the possible benefits.

Simply put, you have one house in a bicameral legislature chosen according to voluntary contribution to the government. As time goes by, people contribute to the government, and receive shares in the next senate election in return. These shares can be traded on the open market. When the election comes, the shareholders vote in the election much as any set of shareholders would elect a board of directors, the difference being that once they've voted, their shares are no longer good.

I've already gone over the benefits in the matter of legislative corruption by money extensively; that was my primary motivation in the original writing.

Another benefit has to do with differences in size between governmental power in different countries. Some states have power that extends over the whole globe. Others can barely keep order internally, and can't even defend against a pushy multinational corporation. There are benefits to both types of countries that adopt this system.

For the global hegemon, this provides them with a way of providing foreigners representation in a government that definately has an impact upon them, in a manner that strengthens the global hegemon. If Brazil, for example, is concerned that our ag subsidies, trade restrictions, and foreign policy are a threat to their own well being, they could buy a seat on our own senate, gaining not only a voice, but a vote on such policies. However, they also directly strengthen our hegemony via direct monetary contribution. It's a win-win situation, in my opinion.

For the tiny third world country, however, this provides them with a direct and regular way to benefit from the presence of multinational corporations. It wouldn't be hard at all for the people of such a country to say, "Okay, we'll pass any law you originate in our own senate, if it meets our satisfaction." The multinational contributes directly to the government in question by buying up pretty much the entire senate. However, the people of that country still have the other half of the bicameral legislature, as well as the executive branch; it can deny truly offensive measures. And, of course, as the country develops, the amount of capital circulating locally increases, allowing local contributors to compete more and more effectively with the foreign multinational.


I hope I have convinced some people that there is such a thing as "taxes" which can be justified. I think all these could be described as "use fees," but of such a general nature they could completely replace our existing tax regime... assuming we abandoned our present out-of-control spending policies. I hope to hear from someone on this issue.

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