At first glance, the Tax Revolution may seem shocking because it begs one huge question: what can we possibly replace taxation and the provision of essential services by government with, and how can we be sure our replacement would work?
The answer to that is hiding in plain sight.
You see; the Tax Revolution does not depend on developing any new idea, system or technology. And it certainly doesn’t depend on adherence to a particular set of political beliefs.
To understand the Tax Revolution, it is important to understand what most of our human wellbeing rests on. Every day, large numbers of people, working together and separately, collect and distribute resources to meet the most fundamental and critical needs of society in various ways – and most of them have nothing to do with the government or, therefore, taxation.
The Source of Our Wellbeing
In the Western world, almost all human needs are met by a simple mechanism –transactions voluntarily made by individuals for mutual benefit. A trip to the grocery store provides a simple example: you want apples more than you want the money you use to buy them, and the store’s owner wants your money more than the apples. Both of you benefit from the exchange of money for apples – and so both of you naturally say “thank you” to the other after it is made.
The power and beauty of such exchanges lie in the fact that the transaction only happens if both people benefit. Over time, millions of such free exchanges build civilization and are responsible for most of our welfare. For example, they are responsible for the production and supply of food, clothes, electrical power, our homes, transportation, medical treatments, and most modern forms of communication, to name just a few.
Our society includes various entities that are formed to meet human needs through this mechanism.
The entities that use this mechanism to distribute most of society’s resources to whomever needs them, wherever and whenever they are needed, could be called voluntary welfare providers. The Tax Revolution is the simple proposal that these providers be allowed to improve on the services that are currently provided by the government, which is the only welfare provider that does not have to earn the money it spends for the good that it does.
These voluntary welfare providers can be categorized as follows.
Voluntary Welfare Providers
Non-profits/NGOs: A Non-Governmental Organization is a corporation whose shareholders do not make profits and measures its success in terms of a benefit to the community. Recognizing, for example, that some people are unable to meet all of their needs through no fault of their own, a large majority of Americans contribute ($373 billion last year) to private organizations that are engaged in causes they care about. The choice to give money to a charity or non-government organization is entirely voluntary and both the giver and the NGO benefit. Clearly, the NGO benefits from donations, which it spends to do good in the community. Although the giver does not often gain materially, she gains something even more valuable than the money she gives – a benefit that could be described as spiritual, emotional or just human. As Shakespeare said, giving is “twice blessed”.
NGOs provide all manner of social services, such as homeless shelters, support for abused children, food or medical care for the poor, psychological support for addicts and so on. The data show that in many areas where private charity operates with the same purpose as a government program, the charity does more good for less money. There is a simple reason for that: if a charity stops doing the good it claims to do, then its donors will cease to support it. In other words, the choice of how to spend one’s money turns good intentions into even better outcomes.
Co-ops and mutual societies: While an NGO acts a third party that receives donations from some people, which it uses to the benefit of other people, a mutual society or co-op involves multiple people coming together for their collective benefit. Unfortunately, there are not many of these around today, largely because governments have passed special-interest laws that have all but eliminated them, but they have been historically hugely successful in insuring their members against hardship and catastrophe, such as by providing health and life insurance. Members of a co-op put funds into a pot when they can afford to, so as to be able to take them out when they need to.
Accordingly, these organizations provide a kind of insurance – and, on top of that, allow the members to benefit further from any profits.
The members of such a society typically have something in common; for example, they may work in the same industry, share the same religious beliefs, or live in the same area.
Because those who benefit from a co-op’s resources provided those resources in the first place, everyone involved has an incentive to ensure there is no waste, and only policies that really serve the members can be implemented. Moreover, the natural self-policing of such an organization mitigates against abuse.
For-profit corporations. The overwhelming majority of the products and services that Americans require are provided by for-profit corporations, which directly provide a needed product or service for money. Since a company must provide value to customers to make a profit, its interests are aligned with those of the people that it serves. Some companies, like supermarkets, utility companies, and transportation companies, support the basic welfare of millions of Americans. Since profit-making corporations must compete with others who can take their business by offering the same or better product for the same price or less, they have an incentive to meet the public’s needs more effectively and more affordably over time, and even to find ways to meet needs that are not met by anyone else.
Informal organizations of individuals. Modern technology allows individuals with a common interest to organize and raise resources for various purposes.
For example, social media, such as Twitter, have been used to start revolutions, to raise awareness (and donations) through bringing together flashmobs. Crowd-funding sites like Patreon, KickStarter, and GoFund.me are increasingly being used to fund causes and creativity at almost zero cost. Crowd-funding site Donors Choose, for example, provides people around the United States with an opportunity to help public school teachers fund children’s education when government funding falls short. Louisiana’s “Cajun Navy”, organized through a Facebook group, is an informal organization of citizens who rescue victims of the floods that frequently strike the state. And in a different vein, many Americans will remember Captain Chesley “Sully” Sullenberger, who landed his plane, with its 155 passengers, on the Hudson River in New York City after it had been hit by a flock of geese; fewer, however, realize that it was the spontaneous actions of a ferry captain and 1,200 others in the area that saved those people from the icy water and got them to safety.
Individual acts of kindness. Every day, millions of Americans perform acts of kindness. America is, according to all of the evidence, one of the most giving nations on earth. Of course, most of us give from our surplus – after we have fed our children, put a roof over our heads, and paid our bills. .Not all giving is, or has to be, organized through legally recognized entities, (such as those described above). Imagine all the more good that could be done if Americans were able to give more of our resources directly to the needy without having to fund, along the way, an expensive tax collection and enforcement bureaucracy.
You can see then, the Tax Revolution isn’t asking anyone to believe anything new or to believe in anything new. Rather, we simply observe all of the good that is done in all of our lives through means other than coercive taxation, and we want those means to be gradually tried out in areas where they are not currently applied.
Doing the Most Good
The Tax Revolution Institute is not seeking to end the funding of government or any of the good that it does. In fact, we are seeking the opposite – to maximize the good that is done with every single tax dollar.
We want taxpayers to be able to direct their tax dollars to where they are most needed and away from where they are doing harm or being wasted. We all do that, without even thinking about it, in every other economic choice we ever make.
When our “voluntary” tax system has become truly voluntary, you will be able to give to effective government programs and agencies that are doing real good and doing it more efficiently than any other organization that might compete with it. Those who receive your tax dollars – whether they be a governmental organization or any other – will have to deliver results to keep earning them.
If a truly voluntary tax system resulted in nothing more than government’s earning your tax dollars through increased efficiency and excellence, then we will have saved lives, promoted justice and increased the prosperity of the nation.
The Tax Revolution doesn’t care who meets the needs of our country: it cares – it insists – that we put in place the only mechanism that guarantees that those needs will be met as effectively and as comprehensively as possible.
So, who will feed the poor? We will, just as we do now.
And who will pay for it? We will, just as we do now.
Let us start measuring our compassion not by the tax that is taken, but by the good that we do.