Rule Five Tax Reform Friday

There’s been a lot of talk lately about what the GOP will do in the way of tax reform.  Speaking as a pretty hardcore libertarian, I’m guessing (in fact, I’m pretty damn certain) it won’t go far enough to suit me.

Let me tell you why.

Barry Goldwater once said “I have little interest in streamlining government or in making it more efficient, for I mean to reduce its size. I do not undertake to promote welfare, for I propose to extend freedom. My aim is not to pass laws, but to repeal them. It is not to inaugurate new programs, but to cancel old ones that do violence to the Constitution, or that have failed their purpose, or that impose on the people an unwarranted financial burden. I will not attempt to discover whether legislation is “needed” before I have first determined whether it is constitutionally permissible. And if I should later be attacked for neglecting my constituents’ “interests,” I shall reply that I was informed that their main interest is liberty and that in that cause I am doing the very best I can.”  I agree wholeheartedly; but there’s an important distinction to point out.

There are basically two types of libertarians.  There are anarcho-libertarians, who hope for a society with no government at all, where all government functions are fully privatized and all interactions are voluntary.  I don’t think this is a realistic viewpoint.  An anarcho-libertarian system is dependent on a perfect society, and relies on perfect (or at least pretty damned good) people.  The other type, of which I am a member, are the minimum-government or ‘small-statist’ libertarians, who seek (as Goldwater did) to reduce government to the minimum possible.  I see government as an evil, but a necessary evil, one that needs to be chained in place and confined to a few narrow purposes – otherwise liberty is forever endangered.

So, how does that relate to taxation?  The key word is voluntary.  Now, no system of taxation is ever completely voluntary.  Look at the structure of taxation as it exists today; if I were to start a charity, no matter how worthy, I couldn’t come take you and lock you in a cage for not contributing to my charity.  But we allow government to do what private citizens cannot do.  In this case, we allow government to initiate the use of force to obtain compliance.

That’s a terrible, dangerous power, and must be tightly restricted.  Right now, it’s not.  The Imperial Leviathan grows more powerful with each passing year, and on tax policy, President Trump is proposing to rearrange the deck chairs on the Titanic.  Here is his tax reform plan; the four primary points are:

  1. Tax relief for middle class Americans: In order to achieve the American dream, let people keep more money in their pockets and increase after-tax wages.
  2. Simplify the tax code to reduce the headaches Americans face in preparing their taxes and  let everyone keep more of their money.
  3. Grow the American economy by discouraging corporate inversions, adding a huge number of new jobs, and making America globally competitive again.
  4. Doesn’t add to our debt and deficit, which are already too large.

Don’t get me wrong; as proposed Imperial reforms go it’s one of the better of a bad lot, except for that last bit, which strains credulity just a tad.  But it’s just a reform of the existing system.  That, in my considered opinion, doesn’t go far enough.  It still depends on an involuntary surrender of the citizens’ productivity, a requirement backed up (maybe indirectly, but even so) by men with guns.

I’d rather junk the whole corrupt, overly complicated system.

Instead of taxing production, let’s tax consumption.  There’s already one such proposed system in the pipeline, where it has been sitting for quite a while with no progress; that would be the FairTax.  A consumption-based tax system, like the FairTax, would increase the tax base enormously, from maybe 155 million taxpayers to over 300 million – including tourists, temporary residents, and even illegal aliens.  It would tax the underground economy (drug dealers and con men buy cars, houses, and computers, among other things, and would pay the tax on those items.)

But most importantly of all, it would make the tax system as voluntary as a tax system would be; every consumer has to consume a certain amount (some proposals exclude essentials like groceries, rent/mortgage, and tuition) but one can pick and choose.  Another advantage, and this is a big advantage where privacy is concerned, is that the free citizens won’t be required to disclose all of their financial affairs to the Imperial and various State governments.

I’d like to see more talk about this, but I’m resigned to it not happening.  In the meantime, I’ll settle for the new arrangement of deck chairs.  I guess.