Friday, February 15, 2013

Principles of Proper Taxation

Taxes are a must. Civilization demands government, and government can't function without an income, and that income must either be gifted or compulsory. No one gives government anything willingly so it must therefor be compulsory.

This does not justify all taxation. The principles that govern proper taxation are not void of justice. They are clear, simple and few. 1) Taxes must come from expenditures and acquisitions never creations and possessions. 2) Taxes must be apportioned equally to the individuals and entities involved. 3) Taxes must be single digit percentages.

1) Taxes must come from expenditures and acquisitions never creations and possessions. Taking from the creators will destroy the economy, and taxing continued possession of property and real estate destroys the wealth of individuals. Taxes necessarily discourage the actions they are imposed upon. When imposed upon inaction, they rot the core of financial independence for the masses.

2) Taxes must be apportioned equally to the individuals and entities involved. Removing more money from one person than another for the same action allows a government to single out individuals and individual people groups and entities for destruction. Taking a greater percentage from one than another for any and all reasons is the first step down the road to a tyrannical taxation system.

3) Taxes must be single digit percentages. The larger the tax percentage the fewer the taxable transactions. Greater quantities of transactions allow the economy to grow, and each transaction yields a piece of revenue for government. Thus it stands to reason that the smaller the tax the better for all. The tax cannot be 0% as this would yield no income, and conversely 100% would yield income for only a moment, before collapsing the economy. The sliding scale would indicate that the revenue is greatest in the present when taxes are slightly less than 20%, yet the greatest growth in the economy would still occur at 0% tax. A growing economy will over time yield greater income than a tax imposed at 18-19% for the highest yield upon the current economy. Thus by halving the highest yielding tax rate we promote the greatest possible compromise between current tax revenue and future expansion of the economy and subsequent revenues. Thus 9% should be the maximum tax imposed upon free peoples.