Federal Taxes under a Libertarian Government? NO!

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 9^th 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 1/9^th 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!