Left-Voluntaryism: Can Voluntary Taxation be Progressive?

in voluntaryism •  last year

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The particular model for the type of social order that I wish to see is anarchist social democracy, which includes a voluntaryist ("voluntary taxationist") aspect. And I would like to elaborate on and defend this aspect of my anarchist theory here.

To begin with, it seems reasonable to outline the primary sources of revenue for the anarchist social democratic confederation (and for the municipalities that constitute the confederation). The four main sources of revenue would be: (1) land value tax, (2) interest and profit from banking, (3) corporate tax, and (4) income tax. Under anarchist social democracy, land would be publicly owned, so the land value tax would constitute rent owed to the community. Banking institutions would also be publicly owned, so profits from interest and such would go to the treasury. These first two sources of revenue would go towards funding a universal basic income for all citizens of the democratic confederation. All commercial and industrial enterprises would be regarded as public property (at least partially, if not entirely). Consequently, the community could demand its share of the profits as a sort of corporate tax. The income tax in this society would be entirely voluntary. Rates for income tax would be set through a democratic process, and payment would be voluntary, but the democratic confederation would confer certain privileges upon those who voluntarily pay income taxes. In turn, the privileges would be denied to those who refuse to pay their share. The corporate tax and income tax would go towards funding all other government services besides universal basic income (e.g. police, military, administration, regulatory agencies, welfare, etc.).

My model of anarchist social democracy incorporates the idea of “voluntary taxation” proposed by Auberon Herbert. Mr. Herbert argued that the government can and should be funded entirely through voluntary contributions. However, I have taken Herbert’s arguments for voluntaryism and synthesized it with Amartya Sen’s argument in favor of progressive taxation. I hardly think it is necessary for me to argue in this forum that compulsory income tax is theft, so I will simply assume that as fact for the purpose of this essay. However, the relative virtue of progressive taxation needs to be addressed. Furthermore, I will need to explain how these two seemingly contradictory ideas can be reconciled to one another. How could a voluntaryist society ever have a progressive income tax? How is it that an anarchist social democrat can go around advocating progressive taxation on an entirely voluntary basis?

voluntary contract

Auberon Herbert had a model of voluntary taxation that seems entirely unrealistic for modern times. There are a great many things that we need modern governments to do that were not a concern in the 1880, so Herbert’s scheme has become obsolete and is in need of revision. For instance, environmental concerns were not a big issue in Herbert’s day, but now we need local governments to be empowered to regulate industry in the interest of the greater community. If a corporation wants to pollute a river in order to save money on the disposal of toxic waste, there ought to be regulatory agencies to prevent them from doing so. Furthermore, it seems to me to be desirable for there to be public schools, universal healthcare, etc. And there can be no reasonable objection to such things so long as they are funded on a voluntary basis. Furthermore, the cost of infrastructure is considerably higher now that we have cars, planes, electricity, and massive bustling cities that require municipalities to ensure safe drinking water and proper disposal of waste and sewage. Thus, it seems to me that the voluntary taxation scheme needed for the sort of anarchist social democracy that I envision must be progressive in nature in order to bring in sufficient revenue to meet the needs of modern society.

Amartya Sen has a brilliant argument for the justice of progressive taxation. Suppose that there is a flat income tax of 50%. A person making 10,000 dollars a year will pay 5,000 dollars in taxes. That’s nearly a year’s worth of mortgage payments! A person making 1,000,000 dollars a year will pay 500,000 dollars. However, the amount that they are left with is ridiculously large. The rich man still enjoys a standard of living that is 100 times greater than that of the poor man mentioned. The total revenue brought in by this flat tax on these two individuals is 505,000 dollars. Yet, the flat tax has impoverished the first individual and allowed the second individual to still live in luxury. The flat tax is not a fair tax because the burden of the tax is heavier on the poor than on the rich. The first man is likely a laborer, who works hard every day. The second man is likely a speculative investor who earns the majority of his income from exploiting the system or by exploiting people. Let’s revise our tax system along progressive lines. The first man will now pay a 10% tax, costing him a manageable 1,000 dollars per year. The second man will now pay a 51% tax, which is not much of an increase. He will now pay 510,000 dollars. This still leaves the wealthy man with plenty of wealth. By no means is either individual impoverished by this tax. Yet, this progressive tax actually brings in more revenue. This progressive tax is more reasonable and more equitable because it ensures that the burden of taxation is fairly distributed and brings in more revenue at the same time.

revenue

The system of voluntary taxation under anarchist social democracy would be progressive. However, a voluntary tax will only be paid if there are sufficient benefits offered in exchange for paying taxes. Since the taxation would not be compulsory, the government must offer something sufficiently valuable in exchange for taxes; the government must incentivize people to voluntarily contribute to its treasury. How shall the government incentivize people to willingly pay their taxes without compulsion?

The system that I envision would be Georgist and mutualist, which means that the anarchist social democratic confederation would have a land trust (since all land would be publicly-owned) and a public central bank within a social credit banking confederation. Competing currencies would be allowed, but only the standard currency would be accepted as payment for taxes. These two geo-mutualist aspects of my model of anarchist social democracy are essential to the success of the voluntary taxation scheme that I propose. These two public institutions—the land trust and the banks—would demand that one pays taxes in exchange for their services. Also, keep in mind that the system of government that I propose consists of a confederation of directly democratic popular assemblies, consistent with the anarchism of Murray Bookchin. I am not supporting big government or statism. (You can find more on these topics of geo-mutualism and direct democracy in my other Steemit posts or on my website, i.e. AnarchistSocialDemocracy.com.)

In order to incentivize people to pay their taxes, the land trust would require that proof of payment of voluntary income tax be presented as a prerequisite to the purchase/rent of land within the confederation. Furthermore, the banks would require the same proof of payment as a prerequisite to opening an account or receiving a loan. So, in order to own a house, own land, open a bank account, or receive a loan within the anarchist social democratic confederation, you would be required to present proof that you have paid your share of the voluntary taxes that society has requested from you. If you do not pay your taxes, the privilege of land-ownership/home-ownership, receiving loans, getting credit, and having a bank account would be revoked. Consequently, most people, especially the wealthier members of society, would voluntarily contribute their fair share in exchange for the benefits that would be given to them.

But is that really voluntary? For something to truly be voluntary, there must be sufficient alternatives. In order for it to be voluntary, people must have the liberty to do otherwise. Hence, left-libertarians say that wage labor under capitalism is not voluntary because there is no other option. I may be free to choose a different employer, but I cannot choose not to engage in wage-labor. Starvation is the only other option; and that is no choice at all. The question at hand is whether or not this progressive voluntary taxation scheme is tantamount to capitalistic wage-slavery. Do people within this society really have any other choice?

My answer is yes, of course they have other choices. Under anarchist social democracy, the incentives to pay taxes are sufficient to elicit payment from most people but would not keep people from being able to survive and live decent lives without paying them. Thus, the anarchist social democratic scheme for a voluntary progressive income tax actually is truly voluntary, unlike wage labor under capitalism. An individual may opt out, choosing not to play along. They can rent land second-hand rather than buying it as fee-simple property from the land trust. They can use an alternative currency. Land-ownership and having a bank account aren’t necessary for survival. So, although this scheme would elicit payments from most people, it would certainly not be compulsory.

Thus, I envision an anarchist social democracy with a left-voluntaryist income tax, a voluntary progressive tax, which would be used to fund various welfare programs, from public education to universal healthcare. And the system of governance would be directly democratic, in line with the anarchism of left-libertarians from Mikhail Bakunin and Peter Kropotkin to Noam Chomsky and Murray Bookchin.

democracy

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Thanks for acknowledging the "left-libertarian" position on wage labor. While I see your point...I think the real question is would people WANT to? Hypothetical systems of voluntary taxation can be theorized, but the way that people, in the US at least, view taxation, I'd imagine that most people would not want to engage in such a system if not forced to.

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I would answer your concern along Rawlsian lines. Before being born, imagine that you are given a choice between two societies that you can be born into, one is a social democracy where there is a safety net and basic income to ensure that even if you are unsuccessful, or get injured and crippled, or whatever else—no matter what—, you will be provided with a basic standard of living and will be saved from poverty and misery. On the other hand, there is a capitalistic society with no safety net whatsoever, so that if you are untalented or get crippled you will end up homeless and starve. A rational person in that position, without foreknowledge of whether they will grow up to be successful or to be a cripple, would likely choose social democracy.

Furthermore, the millennial generation prefers social democracy, even if it means paying more taxes—and they don’t much care whether or not the social democracy is even remotely libertarian; they are willing to swallow statism for the sake of the safety net. The tide is shifting in the direction of social democracy; I would just like to see that tide shift towards a libertarian model of social democracy instead of a statist model.

Additionally, opposition to taxes today is largely because the taxes are unfair. The biggest burden of taxation falls on the middle class, so that the State can afford to subsidize corporations. And most people don’t benefit from paying taxes. When I pay my taxes, the money goes to fund wars that I don’t support, subsidize corporations that I despise, and pay cops who don’t serve my interests or protect my rights/property. So, why would anyone be for paying taxes under this scenario? I think people would be far more willing to pay their share of taxes if their share were fair (i.e. if they weren't being over-taxed) and if they are actually benefiting from government programs and have some say in government (i.e. if they are citizens within a direct democracy).

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Ok, I see your point. The new generations are far more accepting of taxation, if they feel they are getting something out of it, than say my dad grumbling about taxes :)

So, in this hypothetical situation, who would administer this voluntary taxation? How would this be done without creating a privileged class of tax collectors?

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The form of governance would be direct democracy. I advocate “democratic confederalism,” following Murray Bookchin, Janet Biehl, and Abdullah Öcalan. I advocate a consensus-oriented decision-making process. The people would make all the decisions directly.

The taxes might be collected by the local general assembly, but they might also establish an administration for that purpose. It mostly depends on what the people decide, through the democratic process, to do. This wouldn’t create a “privileged class of tax collectors.” I mean, are IRS tax collectors really that privileged? Do they constitute a class? They do their job and get moderate wages for it.

Furthermore, it might be able to be automated. Compulsory taxation needs tax collectors. Voluntary taxation doesn’t really need tax collectors. You could just create an app or website where people can pay online. It would keep track of who paid and the banks/land trust could just verify on the app/website whether an individual was paid up or not. I think it can be done with considerably less bureaucracy than we have now.

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Have you ever participated in a direct democracy? I have in private settings and in public political settings. The general assembly, ended up being anything but democratic in the long run, with people using influence to game power...not unlike our current political system.

Automation? So, instead of a privileged class of tax collectors, we get a privileged class of people that maintain the robots/computers that collect the taxes?

I'm not saying that wouldn't be better than what exists now, but I just want to clearly demonstrate that these are nothing but slight reforms to the current system. I'd personally like to see power eliminated as much as possible, not simply reformed and reorganized.

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I have participated in some directly democratic organizations. I’m aware of things that can go wrong with direct democracy. Consensus processes are tricky, and there’s a lot that has to be done to keep things from becoming undemocratic. There are definitely wrong ways to do "consensus" and direct democracy.

However, I think there are good ways of doing consensus and direct democracy too. But even when consensus processes go awry, I think they are still better than the alternative. I’m personally not a very vocal person, and I don’t like speaking in front of people, but I’ve experienced being empowered to speak up and change things within a consensus-based organization, even after the organization started heading in a very undemocratic direction. Personally, I think consensus-based processes are important for decision-making because it helps prevent decisions from being made in ignorance. (Cf. David Graeber’s essay “Beyond Power/Knowledge”)

As for automation and tax collection, I really don’t see how it would lead to a privileged class. The workers in these fields would work for the community. Cashiers at grocery stores aren’t in a privileged position just because they collect the money; they work for the store. Tax collectors or people who maintained the automated stuff wouldn’t be privileged at all. They would be no more privileged than the cashier at a gas station.

I would like to see power eliminated as much as possible, but I think the right-libertarian model actually leads to more authoritarianism and more power in the hands of a few instead of eliminating power.

these politics are self contradictory. also, there is no such thing as voluntary taxation. it is called either donation or payment.

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"Voluntary taxation" is the terminology that has been in use for about a century to describe this sort of thing. It's largely a quibble over semantics to say 'taxation can't be voluntary.' Go ahead and call it "payment" or "donation," but the semantics doesn't change the substance of the conversation at all. I don't think this position is self-contradictory at all; it merely seems contradictory because we are so used to using terms in a particular way.

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i do not know if i can dissuade you from this path, if we can not come to terms. community ownership leads inevitably to disaster. this is the human dynamic. what we want people to be and what they are, these are not the same. the idea is not the thing. words being old does not make them true. if you have a genuine desire to understand this, please let me know. i have no need to inspire you to anger for fun.

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Community ownership and collectivistic property don’t inevitably lead to disaster. There are public parks and monuments all over America, most of which are well-maintained. Public lands simply aren’t littered with garbage like right-libertarians and AnCaps warn. Furthermore, there is hardly any private property in the individualist sense under industrial society. Most property is owned by corporations—corporations are collectives, not individuals. And even land and homes are seldom owned on an individualistic private property basis, as they are usually mortgaged and the title is owned by a bank, a corporate collective, rather than an individual. And even when the land is paid off, it is held as fee-simple property, where the owner pays a property tax, which is basically a rent—the implicit assumption is that the land is publicly owned and that the government can charge rent for the property. If you think about it, there really is no private property even now.

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so, your argument is that everything in this country is going great, no problems at all, because, public parks, therefore, public parks are going to even be better when we add everyone else's property to them. that would require getting rid of all the people, which is collectivism's stock-in-trade. the present state of and use of corporations is undeniably flawed mostly because the people who make up the state and the corporate structures refuse to do their jobs and instead spend their time profiting off the corruption of any freedom the markets have left, for short term gain. the use of state and corporate power in collusion to subvert the liberty of others is a crime, it is not capitalism. psychopaths and sociopaths in society will cause problems no matter what system is used. collectivism simply does not work in human society and demonstrating the benefits of collectivism by pointing at a litter free parcel of empty land is not a logical argument. when the profit motive is removed people lose the will to do anything to contribute. this is a fact of human nature. no ideology or reeducation has ever changed it. public interest is too abstract to inspire the average person. slaves do not have incentive to work hard to better their situation because they will wake up tomorrow and still be slaves. it does not matter if they are owned by one person or many. i am not going to pretend to have all the answers, but i can look at history and tell you what will not work. no matter what kind of spin is put on collectivism, it always, without fail turns into a gulag, mass murder festival.

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Honestly, every social order that has ever existed in the history of the world has been collectivistic in nature. A truly individualistic society is what lacks any historical precedent. Every historical precedent of a successful society was collectivistic. Most of them have not led to gulags.

As for the whole “tragedy of the commons line,” check out Elinor Ostrom’s work on “Governing the Commons.” To be honest, I think that the “profit motive” contributes little to nothing to one’s decisions a lot of the time. Am I going to mow my grass? Yes. Why? So that it will be more pleasant to spend time in my yard. Am I going to put a new roof on my building? Yes. Why? So that it will be more pleasant as I sit inside because the roof will no longer leak on my head. Am I going to clean up after myself when I have a picnic in a public space? Yes. Why? (Hint: the answer isn’t “profit”)

Human motivations aren’t entirely economistic in nature.

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now who is arguing semantics. communism is trouble no matter how you dress it up. good luck.