I’ve read various essays by Libertarian writers explaining the supposed “advantages” of a “tax free” society. Supposedly “user fees” would replace taxes. I can see a lot of problems with this idea, including a level of complexity that will create a degree of inconveniency just as bad if not even worse than dealing with our various existing tax agencies. There is no sense in creating something that makes more trouble than what we already have…
However, there is a solution to this. Given the amount of financial transactions that take place every year in the US, with a fairly conservative estimate of one hundred trillion dollars a year, an automated financial transaction of tax of no more than 3.5% would be necessary to replace every current tax that now exists. The average American now pays a total tax rate almost ten times this figure! One reason for this is that our tax collection system is quite inefficient with rather large amounts of “overhead” involved. Also, the amount of time needed to figure out what you “owe” would add to your “costs” in that this is time used up. Time that can not be put to any productive use. Time that is in fact “taken” by various government taxing agencies. Then there are the fees charged by tax preparation businesses like H&R Block after you’ve done the work of getting things in order. Even for a retired senior citizen like myself, its a full day’s work getting everything put together before taking it to H&R block, which charges a fair sum just to work up a tax form. One for the State of Michigan. Another for the federal government. And when my wife worked in the City of Muskegon, there was yet another form necessary for that too!
An Automated Financial Transaction Tax eliminates all this. There no longer would be an income tax, sales taxes, payroll taxes, property taxes, capital gains tax, excise taxes, fuel taxes. I use the figure of 3.5% because there is a lot of activity that government does that can be eliminated without any harm. The federal government would cost about $500 billion a year, which would cover national defense and relations with other nations. Everything else would be turned over to the states to handle as they see fit. Social Security and Medicare and Medicaid should be run by a semi-private agency not a part of the federal government. Benefits would be “flat rated”, based upon a determined poverty level. As health care will be completely and totally “free market”, the cost of these services will drop considerably, especially as most people will be able to take care of most of their own basic health needs without involving a physician into the picture. At the present time you can buy test equipment to measure blood pressure, cholesterol, and blood sugar for less than $100. Medications to treat these conditions would run less than $200. What health insurance that will still exist will be only for major medical costs. This is the way car insurance works. You don’t use insurance for oil changes! Plus without prescription laws and such, people will have the ability to take care of far more medical problems than what is allowed today under our “monopoly medicine”… You will have to do some “study”, but the necessary information is available for study.
Unemployment is caused by various factors, including the large amounts of taxes that businesses have to pay. Federal taxes, state taxes, local taxes, property taxes, unemployment taxes, workman’s compensation “insurance”. All of which decrease the number of jobs and lower the amount of wages and salaries that employers can pay. Also deficit spending means that the value of the dollars we earn is reduced over time. Additionally this tends to raise prices and lower returns from savings, making us poorer.
For those seeking public office on the Libertarian ticket, it is important to point out the advantages of lower taxes, more personal freedom, lower medical costs, lower living costs. Most likely housing costs, rents will also drop. Without government enforcement of drug laws, prescription laws, professional and occupational licensing, the increase in the standard of living on a per capita will be at least $3,000 a year per person. Add up the amount of taxes you pay now. Both in income tax, sales taxes, capital gains, payroll tax, property tax. Plus miscellaneous taxes of the sort that you pay for cable TV, telephone, etc. Plus the high cost of health care because of professional monopoly. Then too, the cost of the world’s most expensive military. Americans actually do pay taxes much closer to what Europeans today pay. We just get less back for our money.
Under a Libertarian administration all of this comes to an end. We get back the country we used to have. A country that attracted people from other developed countries because of our greater level of opportunity and more freedoms. Unfortunately both of our major political parties have decided that they “like” having a “big government”. Their only disagreement is over what that “big government” is supposed to do. Along with spending more money than it takes in, which creates deficits and reduces the value of a dollar. In my lifetime the value of the dollar has fallen by a factor of “ten” (10). So that minimum wage of $7.25 an hour is actually worth less than the dollar an hour that I earned in my first full time job! (back in 1959) Back then there was also more freedom too than what we have now. You could buy military surplus rifles by mail order! That freedom disappeared in 1968. This implies to me that the government no longer trusts its own citizens… So far as I’m concerned, the feeling is mutual. And Obama has been one of the worst Presidents we’ve elected since 1789. Nor is today’s Congress much better. Hopefully we can change things for the better! We do have some serious issues facing us, including government pension funds that are underfunded relative to the promises that were made. And the Post Office is in economic trouble. Our deficit is now up to $17 trillion dollars while Medicare costs rise year after year to the point that Medicare will go bankrupt inside this decade unless something is done… We are also facing national health care costs that will likely be $3 trillion dollars very soon now!