Re: How to solve the tax problem w/o anarchy or force

Vladimir writes:
> what we really need is a government which can personalize its
> services, and people pay for what they use. 

yes, agree.  In other words we need freedom for business to compete in
provision of all services currently monopolised by government.

> more and more this is becoming technically feasible. it will bring
> the potential of capitalistic competition and free markets to
> govt. how?  well services that no one uses will tend to whither, and
> the healthy ones will receive greater budgets.

But also you need multiple providers of services, otherwise your
freedom of choice is limited.

If you can opt out of literally any goverment service, I suspect
government revenues would nearly disappear.  Everything they "supply"
can be supplied more cheaply by business.  So what government remained
would have to compete on a fair basis with private industry.

> the big quandary is people who can't pay for what they use
> like social security. ultimately the question is how much
> money the state has the authority to collect for this kind of
> thing, and the political answer has varied every year, but it
> has gone up every year in the 20th century generally.

I think the state should have no authority to collect anything.
Charity at the point of a gun is not charity.  The state is an
extremely inefficient distributor of charitable funds anyway.

> the big problem imho is fraud/waste/corruption in govt though.  I
> think if a lot of it were eliminated we would be flabbergasted at
> how little a personal contribution it takes to take care of people
> who need it. bureaucracies are the most expensive thing on the
> planet. here's hoping that cyberspace will cut through the
> *ultimate* middleman: govt.

Amen to that.

Adam

the distinction between govt and business is sometimes an
arbitrary one. for example govt agencies typically contract
with private companies to perform govt services. a massive
example of this is the defense industry. what I would tend
to propose is a system where this is augmented and finetuned
to the point the govt become a very efficient sorting mechanism
for channeling money to businesses that are the most efficient.
a very interesting combination of the ideas of free market and
govt service.

AB, I disagree that people would opt out of virtually all govt
services. bzzzzzzzt. think of things like trash collection etc.
I do believe the vast majority of things the govt does would
tend to stay there even if people had a choice.

the big libertarian question is, as you raise it: should people
have to pay for things they don't want. well consider things like
roads, police or fire protection, or the court system. 
what if you don't pay, but then dial
911 anyway? or you dial 911 and they ask for your credit card
first? <g>   it really does seem to me like there is a legitimate
role for a certain amount of money to be collected for govt
service. imho it is far, far less than whatis being collected
today. if taxes were 5-10% people wouldn't give as much a damn
about the govt and how it worked. it's because taxes are so high
that people are screeching more. screeching but not acting, as
usual.

libertarians tend to be awfully realistic some times. who pays for
roads when everyone uses them? but I'm definitely into the basic
libertarian ideas.

Vladimir Nuri writes:
> the distinction between govt and business is sometimes an
> arbitrary one. for example govt agencies typically contract
> with private companies to perform govt services. a massive
> example of this is the defense industry. what I would tend
> to propose is a system where this is augmented and finetuned
> to the point the govt become a very efficient sorting mechanism
> for channeling money to businesses that are the most efficient.

Even when government does sub-contract, the inefficiency is usually I
think pretty horrendous by industry standards:

1. the subcontracted work is probably not at all desired by the
customers (us the tax payers)

2. the subcontracted work is probably poorly specified, so the
contractor does work which inefficiently works towards the customers
requirements

3. because governments are monopolies they have no incentive to choose
the best value for money contract, or to try hard to obtain reasonable
contracts

4. because governments employees are often corrupt kick backs are
taken by corrupt employees to accept other than the best value for
money contractor

> AB, I disagree that people would opt out of virtually all govt
> services. bzzzzzzzt. think of things like trash collection etc.
> I do believe the vast majority of things the govt does would
> tend to stay there even if people had a choice.

Everything that can easily be privatised would either be privatised
(because it would be so much cheaper without all the corruption,
ineptitude and lack of efficiency insentive), or for the first time
some competition would be introduced into government and they would
actually compete on an even basis.  Either outcome is preferable over
the current situation, and a direct result of allowing competition.

> the big libertarian question is, as you raise it: should people
> have to pay for things they don't want. 

absolutely not.

> well consider things like roads, 

if you don't drive you shouldn't have to pay for them.

> police

if you have hired a private security firm for protection you shouldn't
have to pay for the police (who as others have noted mostly do
unproductive things, and prosecute victimless crimes, and generally
harrass people).

> or fire protection

well if your house burns down, and you haven't taken fire insurance
with a fire fighting service, and can't afford the fee, well that's
tough luck.

> or the court system.  

I don't want to subsidize arbitration services locking away people for
victimless crimes, so I will subscribe to arbitration services which
don't do this.  See "Machinery of Freedom" by David Friedman for a
plausible frame work for choice in arbitration services and intra
service negotations.

Note quite a lot of business use independent arbitration services,
because it is much cheaper, fairer, and more predictable than the
government monopoly court system.

> what if you don't pay, but then dial 911 anyway?

they ask for your to authenticate your chaumian credential insurancce
contract.  if you can't do that they don't come, same as any other
0800-RENTACOP service.

> or you dial 911 and they ask for your credit card first? <g>

yup, exactly.

> it really does seem to me like there is a legitimate role for a
> certain amount of money to be collected for govt service. 

I think you can privatise everything.  Things which are called natural
monopolies could be managed by trade organisations or companies
bidding for management getting efficiency related fees.  Why should
politicians and the rest manage roads, why not a company.

> imho it is far, far less than whatis being collected today. 

zero I think woudl be best, or very very close.

> if taxes were 5-10% people wouldn't give as much a damn about the
> govt and how it worked. 

What all could you spend 5-10% of GNP on that couldn't be privatised?
Sounds like an awful lot of legalised theft yet!

> libertarians tend to be awfully realistic some times. who pays for
> roads when everyone uses them? 

don't pay not allowed to use.  not everyone uses them to drive cars
on.

Adam

Adam Back wrote:
> 
> Vladimir Nuri writes:
> > the distinction between govt and business is sometimes an
> > arbitrary one. for example govt agencies typically contract
> > with private companies to perform govt services. a massive
> > example of this is the defense industry. what I would tend
> > to propose is a system where this is augmented and finetuned
> > to the point the govt become a very efficient sorting mechanism
> > for channeling money to businesses that are the most efficient.
> 
> Even when government does sub-contract, the inefficiency is usually I
> think pretty horrendous by industry standards:
>  ...
>  ...
> > it really does seem to me like there is a legitimate role for a
> > certain amount of money to be collected for govt service.
> 
> I think you can privatise everything.  Things which are called natural
> monopolies could be managed by trade organisations or companies
> bidding for management getting efficiency related fees.  Why should
> politicians and the rest manage roads, why not a company.
> 
> > imho it is far, far less than whatis being collected today.
> 
> zero I think woudl be best, or very very close.
> 
> > if taxes were 5-10% people wouldn't give as much a damn about the
> > govt and how it worked.
> 
> What all could you spend 5-10% of GNP on that couldn't be privatised?
> Sounds like an awful lot of legalised theft yet!
> 
> > libertarians tend to be awfully realistic some times. who pays for
> > roads when everyone uses them?
> 
> don't pay not allowed to use.  not everyone uses them to drive cars
> on.
> 
> 
There is a real live example of this kind of transition.  New Zealand.

New Zealand is the nation that coined the term 'cradle to grave
socialism' (and also the first to offer women the vote --
coincidence?).  In 1986, the country was as close to bankrupt as was
possible to be.  The socialists were ousted and taxes slashed from 60+%
to 28%.  A GST was introduced, government monopolies were sold off --
mail delivery, post offices, power generation, water supplies, telephone
service, ports, airports, medical, road maintenance etc. Military
investment was reduced to a coast guard and a professional
infrastructure required for UN involvement.

The (almost) immediate result of this divestiture, was for affluence to
skyrocket due to the release of the entrepreneurial spirit (remember the
kiwi-fruit?) By the early '90s New Zealand was upgraded from 17th
standard of living in the world, to 3rd. Since then, taxes have been cut
thrice more.  Currently income taxes are at 21% and plans have been made
to eliminate them entirely in '00.  The entire economy is supported by
the GST of 12.5% (consumption tax).

Welfare still exists, although the population is steadily being weaned
off it.  Most of the diehard dole-bludgers have moved to Australia
(coinciding with a move of many businesses from Australia in the reverse
direction), which still has a 45% income tax rate to support them.  Much
to the chagrin of the doomsaying socialists, the standard of living
actually improved for all the population.  The atmosphere of economic
repression was replaced by cheerful optimism within 6 months of the
transition, and has been growing ever since. Currently, along with
Argentina, New Zealand is the only other country in the world to be in
the black.

Income taxes were kept on solely for the purpose of eliminating foreign
debt. This is due to be completed by '00.  The change in people's
attitudes has been radical. During the latest asian economic crisis, New
Zealand found itself severely affected by the decrease in its markets. 
Rather than a return to printing money and increased taxation, New
Zealand has further reduced its tax burden in the belief that the free
market will find the correct solution.

One other interesting change happened at the same time as the above. 
During the post world war II period, New Zealand (and Australia) were
afflicted by something that was known down-under as the 'English
disease' -- viz: trade unionism.  This second government was virtually
abolished in New Zealand by the passing of the Employment Contracts Act
of 1986.  Under this act, all people are considered to be self-employed
in the sense that everyone has the right to negotiate their own
employment contract, or to collectively bargain as they see fit. What
this means, is that there is no single standard of employer to employee
relationship defined by the government (or trade union).  For a
corporation to require exclusivity of its hired help is considered to be
an invalid employment contract under the act. Consequently, becoming an
'employee' in this sense implies that the income, derived from such
employment, is tax free.  This has been tested in the courts
successfully on a number of occasions.

Several benefits have ensued from this: firstly, everyone has developed
an understanding of how to organize their own financial affairs to
minimize their tax burden; secondly, being self-employed means the 20%
tax rate can be largely reduced through business write-offs; thirdly,
negotiation of contracts, in such an atmosphere, has largely eliminated
the 'us and them' mentality between the corporation and the worker.  Now
it is just a lot of independent co-operating peer companies; fourthly,
because there are no 'bosses' as such, people have a lot more latitude
on how and where they perform their work.  This has led to an incredible
amount of home office and business de-centralization and flexibility.

Its not yet perfect by libertarian standards, but the direction has been
chosen towards a model of government limited to an arbitration function
and to provide a common foreign policy.

My belief is that the creation of a libertarian environment in the US,
is unlikely without much social disruption and bloodshed.  Similarly for
the EU.  A more productive course of action is for libertarian minded
folk, to relocate themselves to countries that are amenable to such
changes in direction (Max! where can we go? Argentina maybe?), and work
to effect the creation of a showcase example of how it can work in
practise.  With the examples of New Zealand and Argentina and the growth
in their stability and affluence, this would be a constructive means of
affirming your libertarian beliefs, without violating the principle of
not initiating force, fraud or coercion.

At 3:39 PM -0500 11/10/98, Adam Back wrote:
>Vladimir Nuri writes:

>> well consider things like roads,
>
>if you don't drive you shouldn't have to pay for them.

>> libertarians tend to be awfully realistic some times. who pays for
>> roads when everyone uses them?
>
>don't pay not allowed to use.  not everyone uses them to drive cars
>on.

	Roads are the easiest (assuming a government model) things to apply
road use taxes to, simply tax gasoline, oil, and tires. Scale your tire tax
based on weight and apply it to bicycles as well, then everyone (execpt
peds) who uses pays.
--
"To sum up: The entire structure of antitrust statutes in this country is a
jumble of economic irrationality and ignorance. It is a product: (a) of a
gross misinterpretation of history, and (b) of rather nave, and certainly
unrealistic, economic theories." Alan Greenspan, "Anti-trust"
http://www.ecosystems.net/mgering/antitrust.html

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