I am a new student here and am enjoying the site very much. I am currently reading the must-reads and anything else I can get my hands on. My opinion on the Austrian school and how I feel about it was summed up precisely by Pascal Salin in a speech delivered for recognition of the Gary Schlarbaum Prize, and reprinted on the Mises Daily under the title, “Austrian Economics: The Ultimate Achievement of an Intellectual Journey.”
"For many years I had been an Austrian economist without knowing it. But when I did discover Austrian economics, I was amazed, because economics appeared as it ought to be: not as a patchwork of partial theories, of different fields of thought without any link between them, but as a logical process of thought founded on realistic assumptions about individual action. Economics became coherent. As Mises rightly wrote, “There are no such things as ‘economics of labor’ or ‘economics of agriculture.’ There is only one coherent body of economics.” - Pascal Salin
This is exactly how I felt, although my study on economics probably wasn’t nearly as complete as Mr Salin!![:)]
Regardless, I have a question about income taxes. I understand the Austrian or Libertarian viewpoint is that taxes are unneccessary and destroy wealth, incentive, capital creation, and freedom. Taxes provide a method for the the government to continually increase spending and steal private property from citizens. It seems the general consensus among the authors here is that goverment should generate some revenue for national defense (albiet smaller), police, firefighters, and general support of functions that provide for the protection of private property.
I agree with that premise, but I can’t find what the stated solution to abolishing the income tax is. How will the goverment raise the neccessary revenue? Eliminate all trade tariffs, excise taxes, ect, ect?? Where does the goverment get the revenue to pay the president, servicement, and judges? What would the country look like under this system? Any links to book or articles on the subject would also be welcome.
A large portion of “fellow travellers” believe in the complete abolishment of government. But, if we assume that there is a limited government then must assume that the government must make some revenue in order to pay for whatever service it provides (national security, law and order, et cetera). In the Mises Daily article Do Austrians Have a Better Idea?, author Robert P. Murphy suggests where the revenue will stem from:
Getting rid of the income tax will knock out much of the federal revenues, and taking out all payroll “contributions” would take us into the realm of “unserious.” Note that in 2007, even without the personal and corporate income tax, the federal government still took in more than $1 trillion in receipts.
These $1 trillion can come from taxes on consumables, as suggested:
The loss of some $1.5 trillion in annual tax receipts sounds absurd, but the actual figure would be lower, because of “supply-side” effects. That is, the true stimulus to the economy from such an enormous tax cut would cause the revenues from other sources to grow. So long as the federal budget were cut by, say, a trillion dollars, within a few years it would be in the black.
But, obviously, a tax cut would require curtailing federal expenditures (decreasing the burder of government on the citizen), which includes a reduction in military spending, the prison and education budget, et cetera.
In order to stay in business without taxation government will have to privatize the only thing it is supposed to be producing, security. That means that you will have as much security provided by the government as you paid for.
There are three ways how government can fund itself through voluntary means:
Enforcement of contract fees. The government could demand payment to sustain the courts which enforce contracts.
Criminal fees. When someone is convicted of a crime, that person should be responsible for not only reparations to the victim but for upholding the government’s work as well.
Business ventures. The government may still coin money and operate the postal service, while allowing competition. The government could put pressure on its business ventures to operate profitably. One way it could do so would be partially privatizing it, creating incentives to make the firm competitive, while still bringing in revenues for government.
That said, a crucial question is whether or not government is truly necessary. The wealthy have too much power in a government-dominated system. By privatizing defense, protection, and legal services, we allow society to be more efficient and more equal, since the rich no longer have the power to lobby and bribe government officials. You might want to see this.
Not necessarily. The financing of law enforcement, and the set of laws, are two different things. Being able to choose the financing, doesn’t mean that you can choose what law to follow.
We’d assume that the laws enacted would be for the benefit of the protection of private property, in general, and for the benefit of the consumer in specific industries (for example, the road industry would need security in order to make their roads safer and attract customers). In that sense, private security would still be more efficient, because they would work on what kind of security is specifically demanded (not blanket laws).
I believe that a consumption tax (which is already implemented) provides the solution to your question. In the top 23 percent tax bracket, the federal Income tax on citizens takes away about 18 percent of their paychecks, this is simply unacceptable.
Under a consumption tax, 18 percent is already taken to pay for the non-sense programs we see today, I say replace them with nothing and use the consumption tax to pay for a domestic army.
No, it becomes banished from society like any other gang of theives. A host of real companies would replace it, each specializing in one of the many fields that governments monopolize today
For me this becomes the sticky point with Libertarianism. Our U.S. Constitution (http://www.usconstitution.net) was very definately and very purposefully set up to have a very limited government. (Have I used ‘very’ enough?) The trouble is that like our gov’t, every gov’t in history has always grown and expanded. There just doesn’t seem to be any way to do it once and for all.
Our founding fathers knew this. Their solution is that we must revolt from time to time - in an armed rebellion. Then start over again with the same original Constitution (without the 14th or later ammendments, and maybe earlier).
“What country can preserve its liberties if its rulers are not warned from time to time that its people preserve the spirit of resistance? Let them take arms…The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”
*-*Thomas Jefferson
If we do not have an armed rebellion, then what historically happens in a democracy degenerated into mob rule is a dictatorship.
Not all dictators are bad. Lichtenstein has a king and has done very well. But most dictator governments, communist, fachist, etc., vasicilate between good and bad and finally end up being overrun by a more successful country or taken over by the barbarians (terrorists today). Of course with any dictator we’ve lost our freedom and rights. But we have already lost most. And as a people and a culture and a society we have become so weak, shameful, and dishonorable that we do not resist and willingly give up those freedoms. Instead we say 'oh please, give me, give me, give me".
Well, the U.S. government did manage without the income tax for quite a while, even having “too much money” at one point. But it could easily be run on donations and fees for using government services. A quirky idea would national and state lotteries. If that doesn’t generate enough, its way too big.
(sorry for hitting that “Suggested by” button - I wasn’t sure what would happen if I pressed it.)
“The trouble is that like our gov’t, every gov’t in history has always grown and expanded. There just doesn’t seem to be any way to do it once and for all.”
Actually, I think there is a way.
In order to have order, we need law. But not just any old law. Rational law. Objectively verifiable law. A law that protects Individuals against the initiation of force.
So, ban the initiation of force.
It would make it really easy to be cognizant of the law.
You bring up some good points. However, my idea is that government has to reform to the point that it does not initiate agression or own any illegitimate stuff, or they are forcibly reformed.