Here's a response I recently posted over at the Ron Paul Forums...
erowe1, right now we hold guns to people's heads and tell them to contribute a lot of money to the public good (pay taxes). If we stopped pointing the gun at people...meaning taxes were completely voluntary...would people still contribute the same amount of money to the public good?
No, obviously not. Because of the free-rider problem the LEVELS of public goods production would drop. When I was in Afghanistan there were numerous other NGOs providing assistance for the Afghans. However, the American military provided 50 times more assistance than all the NGOs in Afghanistan combined. We provided greater overall levels of assistance but at greater cost per unit.
Right now your plan is to reduce taxes to 0%. The minor detail in your plan is that we live in a Democracy. It's tug of war and there are just as many people on the other side. Good or bad the people on the other side depend on the public goods and services that your taxes pay for.
Here's an excerpt of one of the questions asked at the end of the Tea Party Movement and Government discussion on C-Span...
...seeming to claim that this is a major historic moment and that what we are going to see is almost a permanent national commitment towards limited government. Um, I'm skeptical, and I'd like you to perhaps review what you think, Mr. Bell, since Mr. Tapscott is gone, is the key evidence that proves that a corner has been turned. And the reason that I am asking...the reason why I am skeptical is that you could look at Teixeira and Judis thesis, I think it was around 2005, when they were predicting a permanent progressive majority. You can look at some articles in 2003 after the first Bush mid term election arguing that there is a permanent Republican majority. You can go back all the way to 1912 when Taft drove out the progressives from the Republican Party and see that pro-limited government...pro-state activist government have been going at it all this time for almost 100 years now and it seems that one side periodically gains the upper hand and then the other side periodically gains the upper hand and each side, when they periodically gain the upper hand, claims a permanent victory. You can see these claims often. And then they go down in flames. So I'm wondering why you think that at this time the conservative limited government movement has won after 100 years of this and that the progressive state activist side has lost.
It's a pendulum that swings back and forth to SOME degree because conservatives have something to offer (less taxes) and liberals have something to offer (more public goods). When the pendulum swings too far in one direction then either higher taxes or less public goods sets it swinging in the opposite direction. Will the pendulum ever reach moderate libertarians? Probably not. And I'll bet good money it certainly will never reach Anarcho-capitalists.
Here's what the libertarian Spencer Jayden has to say on the matter...
What can't be denied is how liberals managed to move government policy in a left direction for almost a 100 years, so slowly that they never earned the scorn libertarians do.
The pattern is clear. Right now you're like that gifted little kid in the Far Side comic strip that is pushing on the door when the door clearly says PULL. If the door isn't opening by pushing then try pulling. If we're not making significant progress trying to push public goods over to the free market then we need to try pulling the free-market over to public goods.
I know it's hard but we need to stop solely focusing on the gun that is pointed at our head. Instead we should make the obvious point that it's our hard earned money and we should be able to choose which public goods it helps support. Given a choice, people will choose the public good which provides them with the most bang for their buck. As inefficient government organizations lose funding they will be forced to cut costs and operate more efficiently.
The result will be direct competition between the private market and the public market for the production of public goods. The invisible hand will decide the ideal division of labor between the two markets. If it's true that the private market can produce all public goods more efficiently than the public market then gradually funds will be redirected from the public market to the private market.