EXOTIC TAXATION
In Theory
Over the years, there have been many different types of taxation but most of them fall within the previous classes or are combinations or derivations of them. There are two however, that are worth mentioning:
- Voluntary Taxation: as it name implies, taxes are paid on a strictly voluntary basis since there is no coercion. Most governments are against this form of taxation simply because their income would decrease substantially. From their point of view, taxation must be enforced, otherwise people would not be paying their “fair share”.
- Negative Taxation: in this type of system, a person is allowed to cash-in excess tax credits. In some taxation systems, tax credits are given for certain circumstances. However, these credits can only bring taxes down to zero. In this proposed system, these credits would be permitted to go negative, in which case the government would have to return the negative amount to the citizen. Most governments did not consider this system simply because it would decrease government income.
In Reality
Voluntary Taxation
It would seem that this system is something that Absolute Austro-Libertarians would be able to accept, alas, this is not the case. We are not against the voluntary nature of the tax, but we are against taxation. The issue is that taxation, all taxation, since it has a negative impact on economic levels. We want maximum prosperity for everyone, not as dictated by the crackpot politician currently in power. Taxation, even when voluntary, has a negative effect on our wealth, therefore, why would we accept it?
And that’s not all of it. Let’s go a step further. Let’s supposed that somehow a voluntary taxation level can be imposed. We know from studies that taxes would drop to a level of around 20 to 30 % from current levels. These levels are extremely low. What would prevent a politician from beginning to enforce taxation again? Answer: nothing. As we have expressed in many other lessons, the government has absolute powers over everyone. For as long as there is a government, even if taxation is voluntary, we will be in danger. Therefore, we must reject voluntary taxation.
Negative Taxation
This concept is taken right out of the communist text book and applied a coat of modernism and pseudo-capitalism. What this type of tax implies in practice is a guaranteed minimum income level for all citizens. This is *exactly* what communism attempted to do and we all know how it ended. The issue is not that we don’t want people to get out of poverty, the issue is that there is only one viable way to do so: free markets. The only thing that a “guaranteed” minimum income guarantees is disaster. There are at least two mayor problems. The first one is that the government would have to provide untold amounts of wealth that will either be taxed out of the most productive people or inflated out of all proportion. In any case, the end game is economic disaster. The second problem is that such a system would teach people that there is no reason to work, prosper and contribute to the growth of the human race. This would be so because minimum income is guaranteed just by doing exactly nothing! This is not a theoretical point, it has been proven time and time again with welfare systems. Once such a system is in place, there will always be a majority of people gaming it. It is human nature. It is inevitable. For these reasons, we reject the notion that a negative taxation system would have any use in the real world.
Conclusion
Taxation is not only illegitimate, but it is economically disastrous and personally damaging and injuring. There are no practical methods of taxation simply because the only fair tax is ZERO. If you depart from this figure, no matter what you do it will be unfair, the only question is who will suffer the most.
Some things in life are simple, this is one of them: taxation is thievery, plain and simple.
Here you are, with the truth in your hands. You may wash them or pass it on. Up to you.
Note: please see the Glossary if you are unfamiliar with certain words.
