Very interesting stuff. I love the cuckold analogy. Extremely apropos.
For a minarchist State, courts could be financed purely with user-fees. But to fund a military, I’d favor a universal capitation tax. The advantage of a capitation tax is that it’s extremely regressive, which means that in a society with a republican form of government, it would be extremely difficult politically to raise the capitation tax (not to mention that at some point it would become uncollectible if too high), and so it would tend to remain minimal: the opposite tendency of a progressive income tax. For example, if we suppose there would be 200 million American citizens paying a capitation tax of $500, that would raise $100 billion annually, enough to finance a purely defensive military.
EDIT: Another wonderful advantage of a capitation tax is that it requires minimal intrusion into the private lives of citizens, compared to other kinds of taxes. The government doesn’t need to track your income, conduct audits, or keep an army of spies to make sure everyone is paying what they should. They also don’t need to monitor the border for tax contraband, or spy on merchants and track their sales. All the government needs is a list of eligible people (e.g. all citizens over the age of 18), which they compare to the incoming checks. Whoever doesn’t pay gets a phone-call. Simple. And it follows that a capitation tax should have the lowest adminstrative costs as well.
The reason why I thought of a tariff is political viability, not economic sanity. I understand that the people will end up having to pay an indirect tax due to the increased price of goods, but I think that a tariff would be easier to sell than another revenue-raising measure.
If there must be taxes, they should not be “easy to sell.” They should be maximally visible and offensive. This why inflation is the most insidious of all taxes, because it’s hidden - people don’t make connection between more government spending and inflation, so they don’t object as much as they would otherwise to more government spending. The cost of government should be made as visible as possible. These current wars of the U.S. would be much less popular I’m sure if the money required to wage them was extracted from the people through direct taxes, rather than borrowed and printed.