The current state of our tax system claims to be voluntary. However, the voluntary nature comes with a caveat that if you refuse to file your taxes, stiff penalties will be levied. Isn’t force the antithesis to voluntarism?
With tax season upon us, I began contemplating how we could remodel the tax code so that the money would not be taken under the threat of force (essentially theft), and instead would truly reflect the nature of a voluntary tax system. Federal Income Tax is anywhere between 10-40% depending on your income bracket. Add this on top of sales tax, property tax, ObamaCare health insurance tax, gas tax, the list goes on and on, and we see that a large portion of our income is removed from us and given to the government. Now, some people may have no issue with paying their “fair share” in taxes, and I applaud those people and believe that if they want to continue in the current system, who has the right to tell them they cannot do so? No one. That is the crux of liberty, people are free to do as they please so long as they do not infringe on the property rights of others. But what could an alternate system look like that couples our current tax system with a truly voluntary one that allows citizens to give to the government, charities, or use all their income for themselves? After all, your income is a byproduct of your labor, so you should be free to use it as you please.
What I advocate for is a voluntary tax system, that is still in the hands of the government, but allows individuals to opt out of the current tax system. So let’s look at how this could work in practice. Let’s use the example of an existing employee at the start of a new year. At the beginning of the new year, the government would send out forms (or do it electronically, semantics really) to each individual employed in the workforce. For those that are not currently employed, they would be able to fill out the necessary paperwork when they are hired on by a company, not much different than we have currently. However, in this paperwork, there would be a listing of percentages individuals could opt to have withheld from their paycheck each period. Within these options, there would be a percentage that notes it is the rate that existed prior to the new system so those who wished to continue to give money to the government at the same rate they were previously would have no issue defaulting to that option. However, there would also be options for people to give a smaller or larger portion of their paycheck depending on their own beliefs. The more altruistic individuals, who believe their money is best put to use by the government could opt to give a larger percentage of their income, while those who are skeptical about government efficiency can decide to have little to none taken out of their paycheck. This would be the true embodiment of a voluntary tax system, but could also alleviate some concerns many people have about the government going completely unfunded when people say things like “taxation is theft.”
This would almost certainly result in a decrease in government revenues. Obviously, we would need to have a decrease in government expenditures as well otherwise we risk running up our $20 trillion debt even higher. The specifics of government programs that ought to be cut will cloud the intent of the tax plan, so that won’t be discussed. It is necessary, however, to discuss what would happen when the government cut funding to certain programs.
Many people believe that if the government isn’t going to provide a good or service, it will go unfunded and society as a whole will be made worse off. I would argue the opposite. Government bureaucracy clogs the system with needless administrators who serve little purpose beyond shuffling papers from one department to the next while ensuring the sometimes hundreds of pages are filled out correctly and meet the regulatory requirements. This increases costs to the taxpayers and adds to the tax burden that seems to be ever increasing.
Instead, individuals could decide to give their money directly to nonprofits they trust, rather than the government. To illustrate this example lets look at the recent case of Planned Parenthood. With the recent move to cease funding Planned Parenthood with federal dollars I have seen a great outcry on social media websites and heard it from conversations with friends and strangers alike. Clearly, people believe this institution should be in operation. Great! I see no problem with individuals rallying behind a cause and gaining as much support as they can to make sure the services Planned Parenthood provides can be offered for generations to come. But if you were one of the people outraged by President Trumps’ policy, what are you personally doing to help their cause? Are you donating directly to planned parenthood because it is a cause you care about? If so, I applaud you. If not, and there are certainly plenty of reasons why individuals cannot donate themselves, joining the cause and making the issue known to the public is just as important as donating yourself.
This is the point of the voluntary tax system. Maybe the federal government shouldn’t be in the business of providing services that can be funded by citizens directly, especially if individuals are now able to keep more of their income to fund programs and causes they care about personally. If a person is against abortion, why should they be forced to fund an institution that provides them when there are plenty of other people willing to donate their time and money to the cause? The same goes for other issues such as gun rights, refugee advocacy, and many other hotbed issues we face in our society today.
People generally tend to live by a live and let live philosophy. It was not long ago that we saw the gay rights issue have many on the right up in arms about how it went against the Bible. Today, we don’t even see it as a topic of discussion anymore. It has a lot to do with fear of changing the status quo, but also imposing the beliefs of some, even if they are the majority, on the rest of society. Voluntary taxes could not only help American’s give more to the causes they believe in, while not forcing them to fund programs they are against, but can also work to help reduce the tension in our divided society.
As a society, we should view it as our responsibility to help our neighbors in need. It is not your right as a person to say that the government should take from someone else to give to you or a cause you care about. I would not be able to go to your door, ask you for money and upon your refusal put a gun to your head and force you to fork over the cash. If I did, it would be considered a crime. If a person can’t do it themselves, what gives the government the authority to do it on your behalf?