Why Pay Taxes when User Fees are Better

September 27th 2005

Libertarians Slash, Replace Taxes with Spending Challenges, User Fees, Trusts, and Permanent Funds

Libertarianism targets tools to enhance individual rights, and their liberty of use, replacing coercive old-fashioned government programs by creative non-government alternatives, fulfilling the Constitution’s ideals.

The myth? Taxes are “the price we pay for civilization.” Textbooks say no system of justice can exist without it; that it’s the first task of public management; and even Franklin said that, like death, you couldn’t avoid them. Overturn that myth: if civilization is less coercion, taxes are the price we pay for incomplete civilization.

The reality? Once enacted taxes not only grow but become the engine for abuses of power needed to enforce their increasing scope. Adults are treated like government slaves—democratically authorized or not—taxed in every area, from the womb to the tomb. Rights and privacy vanish in “implied powers” to enforce taxes.As taxes multiply people have no idea of the real total tax burden (over 60% in many cases); what they’re spent for (One Libertarian weapon in tax reduction is simply embarrassing legislators by revealing they’re raising taxes for things no one’s defined or, like education, are supposedly already funded); or why: The US has gone from a Constitution with a few optional taxes by relatively un-intrusive methods to co-operating with international “standards” actually demanding that any country with low taxes raise them..

The truth? All ignore numerous examples, from parts of Elizabethan England to medieval German towns to lotteries for public funds to Ancient Thailand to the Amish to the present where taxes aren’t used.

Is there a better way? Yes. Libertarian tools are being adopted: To treat public services as a business with an attitude that costs should go down constantly, nut rise. Why not think big and seek well managed services that pay you, and make that challenge to officials? Stop confusing Public with Government: they’re not the same. A private entity can have a public purpose; the real difference is if you’re being compelled. Junk the free rider model, where taxes are justified on the basis some will benefit from “universal services” who don’t pay, making service inertia a virtue. Why not public trusts designed to be open to all? More:

• Spending Challenges. Citizen Teams are getting a hold of public budgets and finding that, by challenging each item line by line and asking if voluntary options are even being considered, they’re locating what consultants have said for years: by the program’s own standards often over 90% of money spent is wasted compared to options of self-help, co-ops, competing firms, or using simple business methods. The trick: Test budgets line-by-line for voluntary alternatives, and standard methods: user needs, best practices, performance standards, business accounting.

• User Fees and Lotteries: Some things are just wanted by some users. Libertarians suggest set-asides for low-income and to keep reducing the fees, and earmarking lottery funds.

• Self-help through co-operatives, personal accounts. Examples: user-owned public utilities, IRA’s.

• An “Un-Tax” with Permanent Funds. I had a hand in this. At 12 I wrote a short paper suggesting that if government assets and efficiency savings were simply earmarked, captured and invested by long term “permanent” funds not run by government, all could soon get a check that would simultaneously cure unemployment, poverty, basic costs, and retirement woes. I had no idea that I’d overturned 200 years of economics, but my well-connected doting Dad did, and sent the paper to Attorney General William Rogers, later Alaska Governor Jay Hammond (they were all old buddies), Libertarian economist L. von Mises, Robert Kennedy, and even Martin Luther King Jr., who as it turns out had similar thoughts. Libertarian legislators in Alaska took up the idea, and the Alaska Permanent Fund dividend plan arose. Now Alaskans have no income tax and a small family gets about $10,000 yearly and growing. Remember: a twelve year old could figure this out.

Bottom Line? Take Action.Taxes are obsolete. Bring these tools to your community: Share this article; call for tax exemptions: of conscience, homesteads, elderly; for challenge teams; local Permanent Funds. It’s time for attitude change: To see officials calling for more taxes, ‘fair taxes,’ or any tax as uninformed or incompetent. For info on fund, Libertarian Dick Randolph: http://www.apfc.org/publications/TP5-3.cfm

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By Michael Gilson-De Lemos
International Columnist, Fortune 100 consultant, and activist Michael Gilson-De Lemos coordinates the Libertarian International Organization and has more in his upcoming JOIN US!: The Gilson Plan and Libertarian Solutions Empowering People Now.

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Keywords and misspellings:  Libertarian libertarean user fees feas