Federal
Taxes under a Libertarian Government? NO!
By
Martin
L. Cowen III
Freedom is the protection of private property,
including the rights to life, liberty, and the pursuit of happiness, by the
rule of law. Freedom is not the right to vote. The right to vote is a (not very
effective) tool intended to preserve freedom. Freedom has not been secured in
America by the right to vote. Jimmy Carter said on July 28, 2015: “Now it’s just
an oligarchy with unlimited political bribery being the essence…” Since
we have suggested that the right to vote is an inadequate guardian of freedom,
perhaps we should make clear that the best guardian for freedom is a Liberal
Education, education for free people. A “Liberal Education” has nothing to do
with the Socialists who claim the title “Liberal” today.
In Libertarian theory, freedom and
responsibility are related. An able adult person is free precisely because s/he
is responsible for his/her own life. In order to survive and flourish (i.e. to
live), a person must be free. Human action in freedom is the human method of survival and flourishing. The social ideal
for Libertarians is that all adult human relationships be voluntary. If both (or all) parties are not in accord, there is no
personal, social, or economic intercourse. Most people understand the principle
of voluntarism in their daily lives. If our would-be friends, colleagues, or
associates do not want to relate or trade with us, there is no relating or trading.
Unfortunately, with the growth of Government,
has come the creation of many laws and regulations that force people to interact in variety of ways. For most people forced
relationships are a way of life. Thousands of regulations govern virtually
every human economic transaction, rendering them at least partially involuntary.
Just think of the regulations governing employment in America, minimum wages, elaborate
benefits systems, restrictions on hours of employment, restrictions on
termination, and restrictions on work conditions.
Most non-Libertarians readers of this essay
will be happy about such regulations, because non-Libertarians believe in the
“Little People.” The “Little People” are able adults who Non-Libertarian Elites
think could not function without the intervention of the Government. One
supposes that there are able adults who do not mind being thought of as the
“Little People” by their Non-Libertarian Elitist “superiors.” Non-Libertarian Elites
believe that the “Little People” would be working in sweatshops and picking agricultural
produce for less than substance wages but for the Non-Libertarian Elites and
their Government.
But we stray too far. This essay is directed
to Libertarians. We are not trying to convert Non-Libertarian Elitists—a
hopeless task in any event. Our topic is taxes. Taxes involve the involuntary
taking of the private property of another by the Government.
Taxes are a violation of the voluntary
relationship principle of Libertarianism.
It will come as a surprise to many readers,
even non-Libertarian readers that direct taxation has not always existed. The
ancient Greek polis, for example, did not start out with a system of direct taxation.
A yeoman farmer in ancient Greece would not have tolerated a tax on his farm.
How, theoretically, might a Libertarian
government function without taxes?
In America, we have multiple layers of
government. We have the Federal Government, state governments, and local
governments. The problems of running these various governments without a system
of taxation are different at every level. Let us consider funding the Federal
Government first.
For Libertarians, we need not demonstrate
that the only legitimate functions of the Federal Government are legislation, police,
courts, and the military. Government is defined as the agency invested with the
sole right to initiate the offensive use of force. Individuals retain the right
to use defensive force. Governments can “offensively” intervene to arrest
people, to make and enforce judgments, and to project military power. Individuals
cannot arrest people, make and enforce judgment, and project military power
within a Libertarian society.
If these are the only legitimate functions of
the Federal Government, it is easy to imagine that a federal budget might be
10% of a federal budget these days. The current federal budget is about 4
trillion dollars per year. A tenth of that amount is 400 billion dollars.
National defense is currently about 570 billion dollars per year. Administration
of justice is currently about 54 billion dollars per year. General government
is about 23 billion dollars per year. The total current budget is 647 billion
dollars per year considering only legitimate functions of government, legislation,
police, courts, and the military.
No one reading this essay will conceive that
the current defense budget is reasonable. America engages in too many proxy wars,
all readers will agree. The budget for “general government” includes, one
supposes, over 50 million dollars spent on Presidential vacations over the last
6 years. Libertarians agree that the War on Drugs, a large portion of the “administration
of justice” budget item, is completely illegitimate. No one will doubt that
Congressional pay and benefits, including congressional staff, are grossly
excessive.
Correcting “waste and abuse” is a political
bromide. We are not talking about that.
The Presidency
Not only should presidential vacations be
completely eliminated as a government expense, the Presidency should be a
volunteer job. The President should not be paid for his/her work. S/he should
not receive an extravagant lifetime pension upon retirement from office. S/he
should not be protected day and night by a small army. Government service at
the federal level ought to be mostly voluntary. An individual is honored to be
chosen to lead his/her nation, especially the United States of America. An
individual who is mature enough and successful enough to warrant being chosen
President should not need to be supported by the government during his 4 or 8
years in office. If s/he needs extra spending money, s/he can get a paper
route.
In a Libertarian government, the job of being
President would not be full time. A Libertarian President has two jobs:
approving legislation passed by the Congress and commanding the armed forces. Congress,
as we shall shortly see, should not be in session for more than forty days per
year. Given this job description, the President need be in Washington D.C. only
time enough to sign next year’s budget.
The spectacle of the President’s interjection
of him/herself into every social controversy, competing with Kim Kardashian for
entertainment media face time, is disgraceful. A President would better serve
his/her country by hosting tours for high school children at the White House.
The Congress
Congress people are representatives of their
various states. Their salaries, if any, ought to be paid by those states. When
a person hires an agent to represent him/her in a negotiation in a distance
city, that person bears the expense of the agent. So it should be for Congress
people. Furthermore, as indicated above, there is no reason for Congress to be
in session for more than 40 days per year. The only routine business of
Congress is to make an annual budget. Rarely, the Congress might be called upon
to declare war. Being a Congress person or a Senator ought to be a part-time job,
just as it is in many state legislatures.
The Federal Courts
The Federal Courts are engaged in the War on
Drugs and in resolving disputes involving federal agencies, most of which will
cease to exist in a Libertarian government. The work load of the Federal Courts
is likely to drop to 1% of the current load in a Libertarian environment. If
the current budget is 7 billion dollars, 1% of that amount is 70 million
dollars.
Operating a court tends to be a full time job
for judges and clerks. Contrary to popular suspicion, most lawyers are not
independently wealthy and, therefore, cannot support themselves and be full time judges without pay. Therefore, federal judges
may have to be paid by the Federal Government.
The only Federal Court that must exist
according to the Constitution is the Supreme Court. The Constitution provides
that judges “shall receive for their services compensation.” If the 9 (do we need
9?) Justices of the Supreme Court received salaries of $200,000 per year, that
would mean an annual budget amount of $1,800,000. The Court will certainly need
a Clerk. Thus the salaries of the Supreme Court might conceivably be less than
2 million dollars per year.
Under present economic conditions, living in
Washington DC on $200,000 per year is no easy task. After the elimination of
most of the Federal Government by the installation of a Libertarian government,
Washington DC will become a veritable ghost town compared to its present
bloated economic status. Washington Metropolitan Statistical Area is the 9th
largest MSA currently. After Libertarian government, Washington MSA might
return to its original small town status.
A 2 million dollar Supreme Court budget could
be paid by a 40 thousand dollar tax on each of the fifty states.
Federal Police
There is no need for a federal police force. All
policing ought to be performed by the several states and local governments.
The Military
Thus far we have reduced the federal budget
to two million dollars per year for the Supreme Court. The biggest budget item of
a Libertarian federal government must necessarily be the military: Army, Navy, Air
Force, Marines, and Coast Guard. How would a Libertarian government pay for its
military?
A clue to the solution is the Second
Amendment to the Constitution: “A well regulated
militia being necessary to the security of a free state, the right of the
people to keep and bear arms shall not be infringed.”
Modern Americans have
little sense of the meaning of a well-regulated militia. We must look back to
the Ancient Greek polis for a better understanding of this concept. In Ancient
Greece the yeoman farmer was the basic political unit. The yeoman farmers were
also the hoplite soldiers who assembled, when necessary, to defend the polis
from invaders. These hoplite soldiers were not paid by the polis. They provided
their own weapons and armor. They left their farms, when necessary, and marched
to war with volunteer leaders and their neighbors.
America, and many large
countries, maintain standing armies. The soldiers are paid and their weapons
and training are supplied by the government.
The greatest problem with our present means
of waging war is that we do so with little psychological cost (except to those
families whose children are killed or wounded, and, of course, the killed and
wounded service members). The soldiers are volunteers. The Congress need not
decide to go to war. (The last Declaration of War was made on December 8, 1941,
a day after the Japanese attack on Pearl Harbor.) We do not pay for the wars.
(We generally borrow money to finance wars, money that is never to be paid
back.)
Under a Libertarian government we would
return to well-armed and well-regulated militias. Military service would be
opened to volunteers of all ages who might provide, by themselves or with the
help of patrons, for their own support, training, arming, and insurance in case
of death or injury. Such a soldier would cost nothing to the Federal
Government. The cost of a soldier, according to the Pentagon, is about 1.3 million
dollars per year. Of course, this number is ridiculous and includes the cost of
the proverbial $600 hammer.
What we Americans fail to appreciate is the
fact that America goes to war these days, not because our farms are at stake due
to an invading neighbor city-state, but rather because our leaders think for
reasons not necessarily related to national security that war is useful. (Blowing
up an aspirin factory might help divert press attention from a Presidential sex
scandal.) If there were a true need for war (Pearl Harbor attacked), most
red-blooded Americans would rally to the cause and take up arms.
Consider this proposal: In order to go to
war, a vote for war, whether by the Congress or by the people in the case of a
national referendum must be accompanied by a pledge to go to war personally or
to fund one soldier in the war for the duration. A Declaration of War would
include a budget for the war. The Vietnam War cost America about one trillion
dollars and 58,220 fatal casualties. There were 620,000 fatal casualties in the
Civil War. There were 407,300 fatal casualties in World War II (a total of 60
million people total were killed). No war would be declared in the absence of
sufficient pledges to fund the war as budgeted.
The military adventurism of America would
come to an abrupt end.
The problem though of aggressive totalitarian
regimes would not be solved by well-armed and well-regulated militias. America
needs to be prepared as a deterrent against surprise attacks by wicked world
powers. America needs a Central Intelligence Agency. America needs sufficient
military capacity to act as a deterrent against aggressive totalitarian regimes.
A recent intelligence spending estimate was 71
billion dollars. The amount is undoubtedly grossly inflated. If the budget were
10% of that amount, 7 billion dollars is still a lot of money, about $220 per
person per year or about 140 million dollars per state per year.
Intelligence is necessary, but military
infrastructure is equally important. The cost to operate an aircraft carrier is
reported to be 7 million dollars per day. The cost of an aircraft carrier is
reported to be 13 billion dollars. America presently has 10 aircraft carriers
in service. Aircraft carriers are only a small component of the infrastructure
of a modern military force.
We suggested above that the current military
budget is about 570 billion dollars per year. Undoubtedly, if America were not
participating in 5 to 134 proxy wars (varies according to definition), this
budget would be much less.
A Libertarian government might concede that
some little, secret foreign military aggressions (without a Declaration of War)
might be necessary. If, for example, a rogue nation were known to be making a
nuclear bomb to detonate in New York City, a secret Navy Seal operation to
eliminate the risk would be entirely appropriate. Intervention in various civil
wars across the globe is much less likely to be undertaken by a Libertarian
government. The touchstone for secret aggressions must be a clear and present
danger to geographic America.
To fund the present annual military budget
would cost about $2,000 per person. Assuming the budget is two times too big,
that still is $1,000 per person, or about 320 billion dollars per year. The
cost per four person family would be $4,000 per year.
So, how does a Libertarian government pay for
a military that costs $4,000 per family per year? The Libertarian government asks the citizens.
Americans are not stupid. They realize that
the world is a dangerous place. A major function of the President and the
Congress must be to make a carefully reasoned case to the American people to fund
voluntarily the military budget at the cost of $1,000 per person per year. Currently,
the IRS collects about $9,000 per person per year in taxes.
One thousand dollars per year per person is a
small price to pay for freedom from taxation and for safety from foreign aggression.
Conclusion
Enough of federal taxation for one essay.
We have asserted the basic Libertarian
position that the only legitimate functions of the Federal Government are
legislation, police, courts, and the military. We have suggested that the
office of the President of the United States ought to be an honorary, unpaid
post. We have suggested that Congress people, if paid at all, are paid by their
constituent states. We have suggested that the Supreme Court budget be 2
million dollars be year and be paid by a tax by the Federal Government upon state
governments. We have suggested that the military be manned, in large part, by
voluntary well-armed, well-regulated militias. We have suggested that funding
for international intelligence and military infrastructure be funded by
voluntary payments from citizens in an amount about 1/9th the current
total federal tax burden. We have suggested that going to war be done by votes
accompanied by pledges in manpower and funding sufficient to achieve the stated
objective in the Declaration of War.
A future essay will deal with state and local
taxes.
Most, save my Libertarian readers, will claim
this essay is Utopian. We agree that getting to a Libertarian government is a
difficult task. This essay sketches an outline of what such a government might
look like at the federal level. Imagining a free America in which all
relationships are voluntary may be Utopian, but it’s fun!
