Wednesday, October 12, 2011

Aikido, Dune and Taxes

On some forum an anarcho-capitalist asked me how to get rid of taxes. This was my reply...

People say the only two certainties in life are death and taxes. Taxes have probably been around for a lot longer than 2000 years. By trying to fight taxes you're pretty much going up against an immortal. You are not going to defeat this opponent by tackling it head on.

Aikido is a pretty good martial art if you want to go up against an opponent that is far bigger than yourself. It teaches you how to use your opponent's size and strength against them.

Pragmatarianism is the political equivalent of Aikido. It's the only way that you're going to be able to defeat taxes.

The first move in pragmatarianism is by far the hardest. It is to completely embrace the tax rate. This will feel totally unnatural for conservatives, libertarians and anarcho-capitalists. But you most not fear. Because fear is the little-death that will bring total obliteration. You must face your fear. You must permit it to pass over you and through you. And when it has gone past you will turn the inner eye to see its path. Where the fear has gone there will be nothing. Only you will remain.*

If you don't face your fear then you'll never get close enough to your opponent in order to apply the invisible hand technique. This is the second move...taxpayers will directly allocate their taxes among the various government organizations at anytime throughout the year.

Once you apply the invisible hand to government then people's spending decisions in the private sector will determine their spending decisions in the public sector. This is the key concept. If the Red Cross is more effective and efficient than FEMA then people who value disaster relief might not allocate any of their taxes to FEMA. If FEMA loses all funding then the scope of government will narrow. As we already know, narrowing the scope of government will lower the tax rate.

At this point your opponent will be off balance. To utterly destroy your opponent you'll need to ensure that there are private organizations that make every single government organization completely redundant. Not only that but these private organizations must provide more bang for taxpayers' bucks than the government organizations.

The beauty of this concept is that, the more you try and defeat taxes the more we all benefit from the increased competition between the two sectors. Government organizations will either operate efficiently or they will be replaced by efficient private organizations. Either way we win.

Not only that but there's no logical reason for liberals to oppose this system. Everything is evidence based. No leap of faith is required.  The majority of taxpayers won't care whether an organization is public or private...they'll just spend their money on whatever organizations produce the best results at the lowest costs.

In reality though...I wonder which is more unlikely...libertarians accepting taxes or liberals accepting the invisible hand?



  1. "As we already know, narrowing the scope of government will lower the tax rate."

    How do you figure "we" know this? Certainly not from experience. This is what I am most skeptical of. I do not think The State will ever lower the "tax" rate voluntarily- not even if there weren't a single program or agency left to spend that money on. They would keep the money rolling in and sit on it. They'll hold onto it "in case of an emergency" or something. If they aren't budgeted, they will skim funds and still profit "off the books".

    I have no desire to "defeat taxes". That's as pie-in-the-sky as defeating any other kind of theft as a category. All you can do is protect (or hide) your property from the thief as well as you can in the current situation, and defend yourself when necessary. Saying it is your goal to "defeat taxes" is like The State declaring war on terrorism. You can't ever defeat any category of evil once and for all.

    I'd rather withdraw consent and hide my property from all thieves as well as I can instead of letting them steal within certain guidelines.

    In some states lottery ticket proceeds are mandated by law to ONLY go toward certain types of programs (outdoor programs or education). Yet, over and over I have seen those funds used for other programs beyond what is permitted. People complain, and occasionally the "error" is corrected, but as soon as the politicians believe they can get away with it again, they will try.

    I have a strong suspicion that this would happen with "tax" money directed in certain ways.

    Another big problem I have with this is that you will have to have a bureaucracy to allocate and manage the tax money. To write the checks to the chosen agencies and programs. If no one votes to support this particular bureaucracy with "their" portion of the "tax", would their wishes be over-ridden? After all, the politicians will claim that this is a "necessary" part of the system that can't be eliminated no matter whether it is wanted or not. Or, would you get to allocate 90% of "your taxes" where you want, but the other 10% (or whatever) is put where it is "needed" no matter what you want?

  2. Kent, let me clarify the logistics. Taxpayers would be able to directly allocate their taxes among the various government organizations at anytime throughout the year. Each GO website would have a fundraising progress bar and they would send a notification to the IRS as soon as a taxpayer submitted a payment.

    The DOD giving money to the EPA would be almost unlikely as the NRA giving money to PETA. If the DOD actually did give money to the EPA then taxpayers might think twice about allocating their money to the DOD in the future.

    It's reasonable to be skeptical regarding the tax rate decreasing...there aren't too examples of limited-government advocates successfully narrowing the scope of government.

    Honestly, when I first ran across anarcho-capitalism it gave me the heebie jeebies. But I was able to finally accept that non-profit organizations can provide all the same public goods that government organizations can. That being said, I still can't get away from the free-rider problem.

    That means that on one hand we would have low levels of efficiently produced public goods and on the other hand we would have high levels of inefficiently produced public goods.

    Pragmatarianism is the only way that we can have high levels of efficiently produced public goods.

    I know you have a strong deontological perspective on taxes...but pragmatarianism at least gives you a fighting chance. Not only that but it might be the best way to introduce the concept of anarcho-capitalism to other people. Without pragmatarianism I really wouldn't have been willing or able to give anarcho-capitalism a second thought.

    Here's a thread on an anarcho-capitalism forum where I provide a bit more background on my introduction to the concept...Pragmatarianism and Universal Suffrage.

  3. And who pays for the administration of the IRS if no one sees fit to donate their "required" money to them? Do you think the IRS fund raising bar would actually see any action? Or do you think the IRS would donate their services? Or, would the GOs donate a portion to keep the IRS running? As a cost of doing business. If so, this gets back to the problem of your "tax" money being sent to a government agency that you did not agree to fund.

  4. Kent, yes, you have great arguments that free-riders are not a problem and wouldn't be a problem...but pragmatarianism could actually prove it without risking the possibility that you might be wrong.

    I'm pretty sure all the IRS employees would probably "donate" some of their taxes to the IRS. They would probably remind all their friends and family as well.

    If that didn't cover it then they would have to do what non-profits have had to do all along...cut costs and/or fund-raise by trying to convince the American public of their value.

  5. Government employees pay no taxes. Ever. Zero. The pretense that they do is the financial equivalent of a

    perpetual motion device that keeps the economically ignorant among us content. All government employee

    pay comes from government-confiscated "taxes" and the "taxes" they pay go back to government. Plus some is always lost in the shuffle between parties.

    If I paid you $100 dollars, but then demanded you pay a "tax" of 20% back to me, did I just give you $100 or only $80? Now, if I paid you $100 but you paid a third party $20, I have actually, in fact, paid you $100 even if you passed some of it along. There is a difference.

    So, even if every IRS employee designated the IRS as their only beneficiary there would be a net loss- it wouldn't be enough to keep the perpetual motion machine going. How many of their friends and family would have to send all their "taxes" to the IRS to keep it from evaporating? And, what happens when they can't fund it enough to keep it going and do the minimal "job" you have laid out for it (including I assume, tax compliance enforcement)? Would it be allowed to die?

  6. Herbert Spencer* was just plain awesome. Here's a quote from him..."A governmental agency, originally formed to discharge a function, is apt to reach a stage at which its self-sustentation becomes the primary thing and the function to be performed by it the secondary thing."

    I have no idea if the IRS would be allowed to die...but seeing it fight to survive would be priceless. Its ability to survive would be directly tied to its effectiveness at discharging its original function.

    Of course, the less redundant its existence is then the less likely that people will watch it die and not "donate" any of their taxes to it. But if you created a non-profit organization for the sole purpose of enforcing tax compliance...and it was led by some of the most respected names in the field...and you demonstrated results...then surely people would have no problem allowing the IRS to die.

    Personally, I have trouble seeing how a non-government organization could truly enforce anything...but I certainly wouldn't argue against results. That's the beauty of pragmatarianism.

    I dunno...maybe by giving people a choice the "warm glow" feeling that would result from allowing them to directly choose which government organizations received their individual taxes would be in itself sufficient motivation for people to contribute a sufficient amount of money to government organizations. Maybe taxpayers might individually donate a little less but maybe more people would pay taxes...thus the overall level of contributions would stay the same...

    In other words, if you're right that the free-rider problem is not a problem then the IRS would not be able to provide any conclusive evidence of its value. If it couldn't conclusively show that there was a strong positive correlation between people funding the IRS and people funding the government then people would not fund the IRS.

    *see his thoughts on the scope of government and his thoughts on limiting the power of congress.

  7. So you admit that your pragmatarian philosophy is just a roundabout way of destroying the government.