Imagine, if you will, a government funded by user fees instead of by taxes.
Are you being defended? The defense department can send you a bill for that. Is Congress doing something for you? It can send you a bill for that.
The nice thing about approaching things this way is that if Congress is doing something that you don’t want it to do (like invading Iraq, or giving money to solar energy companies, or sending retirement checks to millionaires), or that it shouldn’t be doing, or that doesn’t benefit you, or that it’s totally screwed up, then you don’t pay.
With user fees, you know exactly what you’re paying for.
Could you imagine taking your car to be fixed and being handed an un-itemized bill, so you don’t know whether you’re being charged for parts, labor, or work that they did on other people’s cars, or beer and pizza for after-work parties, or anything else?
Or could you imagine getting a bill from a local garage that you’ve never used, demanding that you pay for work done on cars owned by people you don’t know? No one would stand for it. But that’s basically how taxes work.
Where government user fees are concerned, they can’t be more than a typical person can afford to pay. That places a cap on what can be spent. This is the argument for uniform taxes in the Federalist Papers: They have natural limits that do not apply to progressive taxes or even so-called ‘flat’ taxes.
You can’t just decide to spend a bunch of money and then figure out who can afford to pay how much for the total, which is basically how taxes work.
But if the government is merely enforcing contracts, punishing crimes (as opposed to sins and vices), and repelling invasions — in other words, protecting the rights of the people, as opposed to ‘protecting’ the people — how much would that really cost?
By hiding what’s going on, and by divorcing collection from spending, taxes encourage the government to expand into all kinds of areas where it has no business doing anything. That leads directly to the ability of wealthy and well-connected people to make use of government to pursue their goals using force instead of persuasion.
This is to say, taxes amplify, rather than reduce, coercion and undermine, rather than enhance, equality before the law.
Except uniform taxes, which work this way: Here’s the total bill, T, for what the government is doing. There are N people in the country (or the state or the town), so your share of the bill is T/N.
This is like a user fee, with a lot of individual fees wrapped up into one payment.
Of course, if the total bill includes subsidies to particular businesses or industries or payments to particular classes of people, then it’s not a user fee at all. It’s just a hidden form of wealth redistribution: Do a favor to someone, while passing the cost along to everyone.
That’s why each person would have to get not just a number (‘Here’s what you owe’), but an itemized bill (‘Here’s what we did for you, personally’), on which individual amounts could be challenged (‘No, I didn’t really benefit from spending $500 million on training Syrian rebels, or from spending $200 thousand on sports at our local schools’).
The federal government alone is on track to spend about $6.9 trillion next year. With a uniform tax, they’d be sending everyone a bill for $6,900,000,000,000/330,000,000, which is just shy of $21,000. And that’s every person. A family of four would get a bill for $84,000.
Imagine, if you will, the kind of reaction that would generate and the kinds of changes that would ensue. Better yet, try imagining ever getting to that point in the first place if taxes were uniform, i.e., if government was funded with user fees. It couldn’t happen. Taxes made it possible.
But what about essential spending, like defense? The defense budget is around $800 billion. Divide the cost by the population, and everyone gets a bill for about $2400. That’s steep but payable — and it includes a lot of things that aren’t, strictly speaking, about ‘defending’ anything but jobs.
Of course, most of what government does isn’t like defense. It’s mostly telling some people that they must do things or can’t do things; taking property from some people to give it to others; and so on. Most of what government does benefits one group at the expense of everyone else — or as Tommy Shelby put it, deliberately makes things better for some people by deliberately making them worse for other people.
And this is all possible because we’ve been conditioned to think that majority approval by a group of a few hundred people in one city somehow represents ‘the decisions of the whole’. But to follow the decisions of the whole, government shouldn’t be able to do anything without, say, 95% approval.
Imagine, if you will, a country where no new law (or expenditure) could be authorized without support from 95% of the entire memberships of the House and Senate, or their state-level equivalents; and where any existing law could be repealed with 5% support from the same.
We’d still have laws against directly harming persons and property. We’d still have laws against theft, robbery fraud, and breach of contract.
But we wouldn’t have laws enforcing tribal preferences regarding things like marriage, self-medication, voluntary exchanges of goods and services, unpopular forms of entertainment, and so on. We wouldn’t have laws that redistribute wealth from the people who earned it to other people who are believed, by a small number of elected officials and unelected bureaucrats, to deserve it. We wouldn’t be authorizing the use of our armed forces to police the world and try to remake other countries in our own image. And so on.
If we took seriously the idea that government should follow the decisions of the whole, rather than the decisions of a plurality, the government would be at least two orders of magnitude smaller than it is. And it would be at least an approximation to the government that we were promised in the Declaration of Independence: One that protects our rights, and derives its just powers from our consent.
Imagine, if you will, having a government like that.