Aikido, Dune and Taxes

On another forum an anarcho-capitalist asked me how to get rid of taxes. This was my reply...

People say the only two certainties in life are death and taxes. Taxes have probably been around for a lot longer than 2000 years. By trying to fight taxes you're pretty much going up against an immortal. You are not going to defeat this opponent by tackling it head on.

Aikido is a pretty good martial art if you want to go up against an opponent that is far larger than yourself. It teaches you how to use your opponent's size and strength against them.

Pragmatarianism is the political equivalent of Aikido. It's the only way that you're going to be able to defeat taxes.

The first move in pragmatarianism is by far the hardest. It is to completely embrace the tax rate. This will feel totally unnatural for conservatives, libertarians and anarcho-capitalists. But you most not fear. Because fear is the little-death that will bring total obliteration. You must face your fear. You must permit it to pass over you and through you. And when it has gone past you will turn the inner eye to see its path. Where the fear has gone there will be nothing. Only you will remain.*

If you don't face your fear then you'll never get close enough to your opponent in order to apply the invisible hand technique. This is the second move...taxpayers will directly allocate their taxes among the various government organizations at anytime throughout the year.

Once you apply the invisible hand to government then people's spending decisions in the private sector will determine their spending decisions in the public sector. This is the key concept. If the Red Cross is more effective and efficient than FIMA then people who value disaster relief might not allocate any of their taxes to FIMA. If FIMA loses all funding then the scope of government will narrow. As we already know, narrowing the scope of government will lower the tax rate.

At this point your opponent will be off balance. To utterly destroy your opponent you'll need to ensure that there are private organizations that make every single government organization completely redundant. Not only that but these private organizations must provide more bang for their buck than the government organizations.

The beauty of this concept is that, the more you try and defeat taxes the more we all benefit from the increased competition between the two sectors. Government organizations will either operate efficiently or they will be replaced by efficient private organizations. Either way we win.

Not only that but there's no logical reason for liberals to oppose this system. Everything is evidence based. No leap of faith is required. The majority of taxpayers won't care whether an organization is public or private...they'll just spend their money on whatever organizations produce the best results at the lowest costs.

In reality though...I wonder which is more unlikely...libertarians accepting taxes or liberals accepting the invisible hand?

*Dune

Xerographica said:

Once you apply the invisible hand to government then people's spending decisions in the private sector will determine their spending decisions in the public sector. This is the key concept. If the Red Cross is more effective and efficient than FIMA then people who value disaster relief might not allocate any of their taxes to FIMA. If FIMA loses all funding then the scope of government will narrow. As we already know, narrowing the scope of government will lower the tax rate.

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Kudos for an interesting and different post. I sure get tired of all the predictable hyperpartisan crap, it was nice to read something imaginative and a bit different.

Now, about the content.... what does gov't do when they have a surplus? Well, some will call for lower taxes, but mostly they want to spend it. "Wow, look at all this money we have now that FEMA was unfunded by The People! What do we spend it on?"

Sure, given the public allocation issue they'll have to persuade people to spend it on something... but unless The People have an option called "Give It Back", gov isn't going to let go of that money. Money is power.

Xerographica said:

At this point your opponent will be off balance. To utterly destroy your opponent you'll need to ensure that there are private organizations that make every single government organization completely redundant. Not only that but these private organizations must provide more bang for their buck than the government organizations.

The beauty of this concept is that, the more you try and defeat taxes the more we all benefit from the increased competition between the two sectors. Government organizations will either operate efficiently or they will be replaced by efficient private organizations. Either way we win.

Not only that but there's no logical reason for liberals to oppose this system. Everything is evidence based. No leap of faith is required. The majority of taxpayers won't care whether an organization is public or private...they'll just spend their money on whatever organizations produce the best results at the lowest costs.

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This sounds pretty good. I offer only a few complications to your position, though. First, the evidence-based evaluation of these projects. It's a wonderful theory, but the entire massive advertising industry exists solely to prevent us from doing that. We have myriad laws allowing private companies to disguise their actual efficiency. There's a lot of work to be done in order to allow the American people to see the truth of what both private and public organizations actually do, and how good they are at it.

Second, I really don't think it's possible for a private organization to actually BE more efficient than public ones. A public program will provide the best product it can, and will spend exactly what is necessary to accomplish this task. A private program will provide a product, and then must still turn a profit. Even if the private program creates the best product possible, and then spends exactly enough to make that product... then it has to raise the price in order to make a profit. Or, cut quality and not raise the price. Or function with shady bookkeeping, ship jobs off to the third world, and rely on advertising to make you think it's better than it actually is. By definition, a private program will be more efficient than a public one. If you have to do more than break even, it is mathematically impossible to be more efficient than someone whose only requirement is to do so. Private industry cannot succeed in this contest.

Government organizations will either operate efficiently or they will be replaced by efficient private organizations.

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This is exactly right. The government organizations will operate efficiently. If only we could give them a fighting chance instead of a marginalized, sideways position. Stop thinking of government as stealing money and think of it as a tool to do our bidding. It's our money, and they'll spend it on what we want it spend on. Government need be nothing more than the accountant for the public's wealth. Making such a useful tool in the poor cousin of corrupt business... It's not going to help anyone but the select few who own those corrupt businesses.

So yeah, I like your thoughts. It's just that the outcome, which will still produce the results you want, is the opposite of what you suspect. Private industry will fall by the wayside for the obsolete, middle-ages idea it is. And we will all be better off for it.

Goshin, thanks for the kudus. Yeah, the hyperpartisan crap is the worst. At first I thought that people would relish the opportunity to finally and conclusively prove that their "team" was right...but nobody is really embracing the opportunity to put their money where their mouth is. Pragmatarianism says that we should just taste the pudding...but people have too much fun sitting around debating how it tastes.

Regarding your point...it's a good one. And I fail at accurately conveying the concept. Perhaps the easiest way to think of it is to consider the extreme scenario where there is only one government organization left...say the department of transportation. Right now taxpayers pay around $1 trillion dollars to the federal government. If the department of transportation was the only government organization left then it would be kind of hard to imagine that it would continue to receive $1 trillion dollars a year.

If we look at the other extreme scenario where every good is provided for by government organizations...then it would stand to reason that the tax rate would be 100%. That's an extremely weird scenario to consider. It would be socialism but...the market, rather than planners, would decide how to allocate all goods. It would work...if it weren't for the minor detail that people wouldn't have an incentive to be productive.

In any case, as the scope of government narrows or broadens...the more justification there is for the tax rate to decrease or increase.

Xerographica said:

Goshin, thanks for the kudus. Yeah, the hyperpartisan crap is the worst. At first I thought that people would relish the opportunity to finally and conclusively prove that their "team" was right...but nobody is really embracing the opportunity to put their money where their mouth is. Pragmatarianism says that we should just taste the pudding...but people have too much fun sitting around debating how it tastes.

Regarding your point...it's a good one. And I fail at accurately conveying the concept. Perhaps the easiest way to think of it is to consider the extreme scenario where there is only one government organization left...say the department of transportation. Right now taxpayers pay around $1 trillion dollars to the federal government. If the department of transportation was the only government organization left then it would be kind of hard to imagine that it would continue to receive $1 trillion dollars a year.

If we look at the other extreme scenario where every good is provided for by government organizations...then it would stand to reason that the tax rate would be 100%. That's an extremely weird scenario to consider. It would be socialism but...the market, rather than planners, would decide how to allocate all goods. It would work...if it weren't for the minor detail that people wouldn't have an incentive to be productive.

In any case, as the scope of government narrows or broadens...the more justification there is for the tax rate to decrease or increase.

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I think it is a very interesting idea. Maybe it just needs tweaked a bit.

One thing that worries me... how do we keep the general population from "voting themselves largesse from the public treasury" until it is empty? The classical dilemma of direct democracy.

Paschendale, very very nice! At last, somebody that is willing to put their money where their mouth is. That demonstrates true conviction.

You make a good point regarding advertising...but I trust that just like there are consumer watchdog groups there will be taxpayer watchdog groups that help taxpayers decide whether public or private organizations provide a better return on investment (ROI).

You make a good argument for private industry falling by the way side...but what about non-profit organizations? I can totally see public healthcare beating private healthcare...given that private healthcare has to operate at a profit. But, what happens if somebody wants to start a non-profit organization dedicated to providing free healthcare? Then the government healthcare organization won't have any natural advantage if the non-profit healthcare organization manages to provide a better ROI.

Goshin, pragmatarianism is actually in large part intended to be a solution to that problem. Taxpayers can function as a check and balance between the general population and congress. Candidates will have a hard time promising people more public goods when it will be up to taxpayers to decide how to allocate their taxes among the various government organizations.

Xerographica said:

Goshin, pragmatarianism is actually in large part intended to be a solution to that problem. Taxpayers can function as a check and balance between the general population and congress. Candidates will have a hard time promising people more public goods when it will be up to taxpayers to decide how to allocate their taxes among the various government organizations.

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Actually, my point was more like this: who acts as a check on TAXPAYERS to keep them from soaking the "rich" and giving to themselves? Depending on the "better judgement" of people-in-general tends not to go well...

The politicians would still control the system. They get to define what the categories are and how the money is spent within each system. If the public defunded FEMA, they would simply include emergency relief as "national disaster protection" under the defense budget. Smaller departments, like the department of the interior would simply be folded in larger ones to keep them funded. Congress might have to work a little harder, but they still would determine the budget.

The whole vote with your taxes idea has actually been growing on me. The only problem is that I can see some important things getting critically underfunded because voters don't understand them, or just because voters are stupid. Maybe if the government got like 15 percent of the total budget that it could do what it wanted with to correct for shortfalls. As for the other, it's not so much that liberals don't accept the invisible hand. I understand how the market is supposed to work, and in the majority of cases, it does work that way. It's just that some people seem to think it always works in every situation. Since you've already said that you think universal health care would probably work better than private sector, I'm assuming you're not one of those people, which means we probably actually agree on most things.

Goshin said:

Actually, my point was more like this: who acts as a check on TAXPAYERS to keep them from soaking the "rich" and giving to themselves? Depending on the "better judgement" of people-in-general tends not to go well...

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Alternatively, what prevents the taxpayers from forgetting what it is that the Department of Energy does, exactly, and grossly underfunding them?

Goshin, hmmm...can you think of any possible scenarios? All taxpayers can do is decide which government organizations receive their individual taxes. How can I soak the rich by putting my individual taxes into public education, public healthcare and infrastructure?

rathi, well, I'm sure that's possible to some extent. But the broader the scope of a government organization...the greater the chances they'll be responsible for providing public goods that various taxpayers did not value. My example of NRA vs PETA kind of touches on that concept.

atrasicarius, one thing to keep in mind is that there is a strong correlation between education and income. Taxpayers as a whole are better educated than the general public.

Besides, not everybody will want to decide how to allocate their taxes...so a certain percentage of taxpayers will choose just to give their taxes to congress. I wouldn't be surprised if that total amount turned out to be 15% of the total budget.

Oh, it's refreshing to hear that you understand how the invisible hand works. Yes, it definitely has its limitations just like the government has its limitations. Pragmatarianism will allow taxpayers to identify the areas in which government is superior and the areas in which the private sector is superior.

Deuce, honestly...it's very well possible that you've helped me the most at fleshing out and refining this concept. I'm pretty sure you didn't do it intentionally but I'm still appreciative.

Regarding the Department of Energy...there's no way you can tell whether somebody is accidentally forgetting about the Dept of Energy or whether they value other public goods more than they value energy. Unless you asked them I suppose.

If you were concerned that the department of energy was grossly underfunded...which would be easy to figure out by the fundraising progress bar on their website...then you would probably get on here and start a thread with the intention of reminding/informing people why the Dept of Energy is important.

Perhaps liberals would say...oh, thanks for the reminder while libertarians would link you to Milton Friedman's video where he explains which of the cabinet departments should be kept or abolished. Then you would debate the libertarians and provide some statistics and they would reply that necessity is the mother of invention.

Xerographica said:

Goshin, hmmm...can you think of any possible scenarios? All taxpayers can do is decide which government organizations receive their individual taxes. How can I soak the rich by putting my individual taxes into public education, public healthcare and infrastructure?

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Actually I think I misunderstood you. I had the mental image that all the people were voting on what gets funded overall. Instead I gather you mean each individual taxpayer gets to say where HIS tax money goes, and ONLY his own tax money?

Hm. If that's the case I withdraw my objection.... but I'm not sure that depending on the wisdom of the general public in such matters is.... well, wise.

Goshin, yes...you would be able to decide where your taxes go. Well...the more taxpayers I talk to...and the more C-span I watch...the more inclined I am to trust the cumulative allocation decisions of 150 million taxpayers versus the decisions of 535 congresspeople.

It's not that the taxpayers I talk to say it's an awesome idea...their general response is that they would be concerned that various government organizations would be underfunded. When I first started asking people I took their concerns at face value. After a while though...I had trouble keeping track of all the government organizations that people were predicting would be underfunded.

For example...look through this thread and try to count all the public goods that Deuce said that people would forget to fund.

For the life of me I haven't been able to come up with a good analogy to describe this concept. Let's see...in the military I remember they would make us get in a line and pick up litter. If you only have one guy walking in a straight line down a football field he would miss a lot of litter. If you had two people walking down the field in a straight line then they would spot twice as much litter. If you keep adding people then by the time everybody's standing shoulder to shoulder it would be extremely unlikely that any litter would be missed. Eh, not the best analogy.

Some people like Deuce will have a great bird's eye view of public goods. Other people might spend all their time championing their favorite public good. But with 150 million people the total coverage will far surpass the coverage provided by congress. But it won't just be 150 million taxpayers because even if somebody doesn't necessarily help pick up liter...so to speak...I'm sure plenty of non-taxpayers will be happy to point out where the liter is. They'll shout...address this problem!!

Nothing will be missed. Then it merely boils down to people's values. Right now congress has no idea how to prioritize spending because taxpayers are not forced to consider the opportunity costs of their taxes. Voters say that they want this and this and this and that. But without knowing how much infrastructure you would be willing to forgo in order to pay for defense then congress has no way of knowing how to divide your taxes between the two public goods.

Recently I realized something that now seems ridiculously obvious. The more government organizations there are...the more essential the invisible hand becomes. That's why libertarians say that government should be limited to defense, justice and the police. Congress wouldn't have much difficulty juggling three public goods. When Deuce says that there are a gazillion public organizations that I've never heard of then it's actually a strong argument for allowing the invisible hand to juggle a gazillion public organizations. That's the strength of the invisible hand.

The quantity of public organizations could increase or decrease with no problem if we allow the invisible hand to decide how to allocate taxes among the various public organizations. Even if I'm totally off my rocker it really weirds me out that nobody else has advocated this before.

Xerographica said:

Deuce, honestly...it's very well possible that you've helped me the most at fleshing out and refining this concept. I'm pretty sure you didn't do it intentionally but I'm still appreciative.

Regarding the Department of Energy...there's no way you can tell whether somebody is accidentally forgetting about the Dept of Energy or whether they value other public goods more than they value energy. Unless you asked them I suppose.

If you were concerned that the department of energy was grossly underfunded...which would be easy to figure out by the fundraising progress bar on their website...then you would probably get on here and start a thread with the intention of reminding/informing people why the Dept of Energy is important.

Perhaps liberals would say...oh, thanks for the reminder while libertarians would link you to Milton Friedman's video where he explains which of the cabinet departments should be kept or abolished. Then you would debate the libertarians and provide some statistics and they would reply that necessity is the mother of invention.

Click to expand...

How does your progress bar know how people allocated taxes? Is there a magic instant processing feature attached to my W-2? You understand that 90% of taxpayers file their stuff at like the last second, right? When 15 million tax returns are sitting in the IRS inbox, how are the rest of us to know the actual status of the Department of Energy's progress bar?

Deuce, how does the World Wildlife Fund know you made a donation? Taxpayers would pay their taxes directly to the various government organizations at anytime throughout the year. The taxpayer would receive a receipt and the GO would send a notice of payment to the IRS. Or maybe taxpayers will send their receipts to the IRS by April 15.

A "minor?" detail is that people's income can vary to some degree from year to year...but people have a generally good idea how much taxes they'll have to pay. Not sure how many people will wait until April 15 to pay their taxes. Probably the same amount of people that wait until the very last minute to make a tax deductible donation.

It's a fundamental paradigm shift because people will be directly responsible for funding the government organizations that they value. It would stand to reason that people's perception of taxes will completely change. Taxpayers will be transformed into public donors.

There would have to be a balanced budget amendment, methinks, else Congress would simply do deficit-spending wherever they wished.