*SOLUTION: Consensual Taxation (ONLY).

Posted: July 8, 2010 in 2010, Exclusives, Timeless
Tags: ,

They often say “vote with your pocketbook”. I say lets take that concept to the extreme. Imagine if on your IRS form instead of focusing on the check-boxes of ‘dependents’ you claim, the majority of the ordeal would be a compendium of all of the various things government does, and taxes us for.

Think about that: EVERYTHING the government does and taxes us for, itemized, in a checklist. The form would be more like a book. There would be so much that people would only have time to flip through trying to find things they actually support.

From there there could be a 1-10 system. Like the form has a column that states the total intended price tag, and then the next column shows how much would cost each individual under the government vision. From there you get a base-10 percentage option of how much of their intended price for you that you actually support.

I argue that this alone would solve pretty much everything. In fact, it would almost negate the need for congress critters and the office of the president, especially as we know them. I argue that politicians are the root of majority of our problems.

Although I detest ’emotional wedge issues’, I do often point out how it’s unfair that people who don’t support abortion are forced to pay for abortion related programs. If it were the other way around, and abortion were outlawed, should avid abortion supporters be forced to pay for anti-abortion programs? Considering this concept again recently brought me to the conclusion of this case point.

Imagine all of the issues. Now imagine all of those who avidly support them, and nastily don’t. Space: if you want to fund NASA’s Mars mission, go for it. Millions of people are rightfully obsessed with having a new 9/11 investigation. Let them! Let them opt to pay for it, or ignore it. Or consider Global Warming. Vast amounts of government funding goes towards numerous things and studies related to that issue. Hey, if people want to pay for such things, let them. But don’t force everyone else to. If people didn’t have to be taxed to death in relation to things they don’t support, why should they?

I came to this conclusion over a month ago. I posted about it over at ATS, but at first I didn’t know what best to call it. It had to have a title.  Finally “Consent Taxation” came to mind. Before I had the title, I had no luck finding anything like it, even via Google God. But as soon as I thought of the title I immediately found another person with the same idea. Charles B. Petzold is the first person I know of to brainstorm this idea. He even already has a Facebook page specifically for the idea (if you like this concept the first thing to do is support his page):

The concept is simple in theory, but perhaps more complicated in implementation. However, if people can file taxes, than they can just as easily do this. In fact, they may even find a personal interest in doing so, as it promotes their own wishes, and makes their voice heard. It would essentially operate much like the IRS does now (ironically), in that people would be filing tax consent forms to the Fed, state, and local governments, with each new budget cycle. The Fed, states, and local government would publicly submit their budget proposals, and proposed spending initiatives before each budget cycle. The public (those who give a #), would than review these proposals for a period of time, before their tax consent forms were due. Based on the public’s feedback, budgets would be created on a strictly popular vote basis. Some of the items would be shorter term, and others longer term. The longer term issues would naturally be of the most importance on any given consent form. The form itself would essentially be a checklist of items presented to the taxpayer. The taxpayer would be able to indicate the level of importance they lend to each item, possibly by use of the old “on a scale of 1-5” format, which would dictate the amount they deemed fit to spend on it….or…. they could check “unsatisfactory”, indicating they have no interest whatsoever in having their tax money being spent on that item. If implemented, the American people would be so jaw-dropped by the long lists of frivolous spending, that it would be cut short in a very small amount of time. Almost sounds too simple, doesn’t it?….. Well, so simple, I think it would work.

Other than Petzold’s pages, searching for “consent taxation ‘check list'” brought up a bunch of dead end looking PDF files, etc.

Wikipedia’s Taxation as Theft entry talks about the unfairness of being forced to pay taxes on things we haven’t consented to, but fails to mention an outline of that being the solution to the problem.

Instead it says this:

In taxation a taxpayer wasn’t given a choice in what services to pay for. Somebody else chooses on behalf of the payer without his/her explicit consent as to what services to pay for, even if the payer does not use that service or believes against that particular service. If it were possible to track where exactly a taxpayer’s tax money goes, the taxpayer could pay that entity directly. However, besides the logistic difficulties of this proposal, a country’s inhabitants routinely benefit from non-excludable goods or services, such as national defense or infrastructure. This is discussed in greater detail in David Osterfeld’s paper “Social Utility” and Government Transfers of Wealth: An Austrian Perspective.

That paper can be found here. This paragraph is striking:

Currently, in excess of 50 percent of the budgets of practically all governments in the world are devoted to transfer payments. This makes wealth transfers, at least quantitatively, the most important function of government. The official justification for these activities is that they increase “social utility.” Since transferring wealth from some individuals to others reduces choice sets of the former while expanding them for the latter, this means that some are forced to choose between options that provide them with less utility than those they would have chosen on the market, while others are able to choose from options that would not be open to them on the market. Since the utility of some is reduced while that of others is increased, any claim that social utility has been increased implies the ability to compare, if not measure, the utilities of different individuals. Thus, the justification for wealth transfers clearly implies the use of utility in its cardinal sense (Simon), defined here as the ability to measure and/or compare the utilities of different individuals. Those who maintain that wealth transfers can and do increase social utility should be able to support this claim with adequate evidence.

50% of government is in deciding what to transfer from who and to where? It’s sounds like things might be better off if we do that decision making for them. This would seriously marginalize their power over us.

A little further down:

The results of the foregoing are interesting. One may say with certainty that the market always increases social utility. On the other hand, one can never state with certainty that any act of government ever increases social utility, and the only conclusion one could ever make with absolute certainty is that a given act of government reduced “social utility.” And this, as we shall see, is not as unlikely as might be thought.

That paper is a good read, but I somehow didn’t find mention of how that Wikipedia entry I cited put it that: “If it were possible to track where exactly a taxpayer’s tax money goes, the taxpayer could pay that entity directly. However, besides the logistic difficulties of this proposal, a country’s inhabitants routinely benefit from non-excludable goods or services, such as national defense or infrastructure.” The paper more seems to completely argue against taxes altogether, and I didn’t see that bit about it being “impossible to track where tax money goes’.

Instead it says this:

This means that it is impossible to ascertain whether a given government action increased or decreased net social utility or left it unchanged.

I also came across:
Public Choice Theory

One of the chief underpinnings of public choice theory is the lack of incentives for voters to monitor government effectively. Anthony Downs, in one of the earliest public choice books, An Economic Theory of Democracy, pointed out that the voter is largely ignorant of political issues and that this ignorance is rational. Even though the result of an election may be very important, an individual’s vote rarely decides an election. Thus, the direct impact of casting a well-informed vote is almost nil; the voter has virtually no chance to determine the outcome of the election. So spending time following the issues is not personally worthwhile for the voter. Evidence for this claim is found in the fact that public opinion polls consistently find that less than half of all voting-age Americans can name their own congressional representative.

Public choice economists point out that this incentive to be ignorant is rare in the private sector. Someone who buys a car typically wants to be well informed about the car he or she selects. That is because the car buyer’s choice is decisive—he or she pays only for the one chosen. If the choice is wise, the buyer will benefit; if it is unwise, the buyer will suffer directly. Voting lacks that kind of direct result. Therefore, most voters are largely ignorant about the positions of the people for whom they vote. Except for a few highly publicized issues, they do not pay a lot of attention to what legislative bodies do, and even when they do pay attention, they have little incentive to gain the background knowledge and analytic skill needed to understand the issues.

That deals directly with my arguments that people are predictably ignorant as they feel voting and participating in the system as we know to be irrelevant.

This section also highlights some of what I’ve been saying:

Public choice economists also examine the actions of legislators. Although legislators are expected to pursue the “public interest,” they make decisions on how to use other people’s resources, not their own. Furthermore, these resources must be provided by taxpayers and by those hurt by regulations whether they want to provide them or not. Politicians may intend to spend taxpayer money wisely. Efficient decisions, however, will neither save their own money nor give them any proportion of the wealth they save for citizens. There is no direct reward for fighting powerful interest groups in order to confer benefits on a public that is not even aware of the benefits or of who conferred them. Thus, the incentives for good management in the public interest are weak. In contrast, interest groups are organized by people with very strong gains to be made from governmental action. They provide politicians with campaign funds and campaign workers. In return they receive at least the “ear” of the politician and often gain support for their goals.

In other words, because legislators have the power to tax and to extract resources in other coercive ways, and because voters monitor their behavior poorly, legislators behave in ways that are costly to citizens.

What is odd however is that I don’t see any mention of the ideal of ‘Consent Taxation” mentioned in the Public Choice Theory model. It’s like it’s right on the tips of their tongues, but PCT seems more about “studies the behavior of politicians and government”.

Much More To Come…

  1. My friend,

    I am flattered that you quoted my taxation idea. Im glad to hear more people think the same way, & even more glad that you promote it. Like most slobs, I have a job which takes up 99% of my time, or Id be doing more on this. I am also sorry for not calling you back directly, (you called me during end of month accounting, & I was crazy busy). I am happy to call you, & nyour readers friends & will speak to you, eventually (LOL)

    • Very, very interesting idea.

      I find this to have a couple of problems.

      1. Isn’t this just a ‘modern day direct democracy’? Majority wins, minority loses; repeat this until minority revolts. This seems to be the outcome, how can you reduce the impact of the majority voting on the same thing; for they have the same or similar interest. Or do you have the mindset: to win a war, requires casualties? Is it possible to consciously ignore the minority of a population; for all men are not morally sounds and the majority will trample over the minority subconsciously or consciously.

      2. Secondly, to trust the public is to trust their minds. Our education system as you know is terrible in every sense of the word. How can you trust a nation who follows GWB to war with Iraq under the impression to fight a war on terror to adequately decide what is best for themselves? It seems an objective and imperative change to education must be sought before this becomes practical.


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