Eliminate All Taxes!?

Is this a crazy idea? Maybe not! Please read the following carefully, and then please throw rocks at this idea.

Why do we have taxes? Certainly, we need government for the common infrastructure elements and services we all require as a society. Services such as fire protection must be provided as a service to everyone. We can't be deciding to extinguish a blaze based on whether the homeowner has paid for a certain type of fire protection. If we allowed some homes to burn because they did not pay firefighting taxes, those fires would quickly get out of control and everyone's homes would burn. Therefore, we have common fire services that we agree to fund so we can have mutual protection. Every fire is put out, regardless of how rich or poor you might be. There's really no other option here.

In a similar vein, we can't let some people remain sick as disease will spread through the population. Epidemics don't care if you are a citizen or not, whether you are covered or not, or whether you are a millionaire. We must keep the population healthy and change our system from disease care to health care. It is a great example of how greed-based design does not serve our best interests as a nation. Today, we are spending far more than any industrialized nation on healthcare and not a great many go uncovered, and even those who are covered may go into bankruptcy if they encounter a catastrophic medical condition.

It is government's role to provide these common infrastructure elements as well as national and border security, transportation services, care of the elderly and disabled, education, etc. The way we have decided to pay for these infrastructure elements is to levy taxes on the population of one form or another. Our system requires that we extract money from the economy to fund the government, and we attempt to set and balance a budget. As long as the taxes are fair and government is not spending on frivolous projects and diverting the money to line the pockets of public officials and their friends (which happens far too often), then we would hope that people would embrace the required funding of our common infrastructure, and most do.

However, with our current method of doing business, we find government frequently underfunded. We want certain functions to be funded, such as education, but we are faced with shortfalls, and the plea to "raise taxes" or "cut spending." Right now, we are in the midst of a 10% across-the-board spending cut, in defiance of voter approval of Proposition 98, which forces adequate funding of education. Cities can't make ends meet and infrastructure improvements that we desperately need are left for better times. Why does this happen?

At this time, our state government is in a financial crisis due to a dependence on volatile tax revenue streams that soar or crash, exaggerating state economic swings. In good times, programs are put into place that are well intentioned, but with commitments that extend into the future, thereby assuming a continuation of tax revenue along the lines of what we see today. In lean times, the volatile revenue streams crash, exaggerating the downturn of the economy. Our state revenue is mainly based on sales tax, which is tightly indexed to the state of the economy, and property tax, which is based on market valuations and is therefore also subject to rapid swings.

The federal government creates massive budgets with earmarks throughout, and then more recently, tacks on "supplemental" spending bills for the occupation of Iraq and operations in Afghanistan. Our federal deficit is massive, and again, in lean times, services are cut. The unregulated mortgage industry has contributed to the dire situation nationwide, a situation brought on by economic sleight of hand by then Federal Reserve Board Chair Alan Greenspan to reduce mortgage interest rates to a very low level and thereby encourage a real estate bubble.

To cover all this spending, we have an ungodly tax system, based on income


-- Raymond Lutz - 01 May 2008
Topic revision: r1 - 2008-05-01, RaymondLutz
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