From: James Rogers (jamesr@best.com)
Date: Mon May 22 2000 - 09:19:21 MDT
On Mon, 22 May 2000, Martin Ling wrote:
> On Mon, May 22, 2000 at 10:04:36AM -0400, Michael S. Lorrey wrote:
>
> > You say the income tax is lower? What are the brackets, the percentages? What are the deductions? What is the cost of living?
> > Value added tax? ... check
>
> Since when exactly was the level of taxation directly inversely
> proportional to how 'free' a country is? Unless one is arguing for a
> system of no taxation and public services at all, the specifics seem
> somewhat irrelevant.
The specifics are entirely relevant. First, the amount of taxation
essentially determines how much of your labor is slave labor (adjusted for
rate of return, but that typically is pretty damn low). Second, taxation
that is tied more closely to service usage is more fair than taxation
based on other arbitrary metrics.
> Would you cut all taxation? Make all public services optional private ones?
Preferably yes, but at the very least I would prefer to have a use-based
tax system. Not only are use taxes fairer, but they introduce some market
mechanics into the government that encourages more efficient and
responsive use of tax dollars.
For example, the Departments of Transportation of California and Nevada:
California: $400k/year per mile
Nevada: $37k/year per mile
These are both government agencies with similar missions, but they operate
very differently, get their money from different places, and the results
are profoundly different. It is interesting to note that, while California
spends greater than an order of magnitude more money per mile, the roads in
Nevada are actually in much better condition in my experience.
California DoT gets money from dozens of sources and taxes to the extent
that it effectively comes from the General Fund. Road quality is mediocre
and the agency has a reputation for being slow, wasteful, and
non-responsive.
Nevada DoT gets its money from one source: gas tax (although gas is
actually cheaper in Nevada than in California), which means that their
annual budget is determined by how many people drive on their roads and
how often they drive. NDoT is responsive to individual requests and
private citizens are routinely involved in their decision making process.
It takes very little effort to get them to fix roads and intersections. If
they have extra resources available (they almost always do), they will
upgrade existing roads if an individual makes a phone call (this happened
to me -- I was shocked).
The difference in these two cases is that the tax revenue of one agency was
dependent on its ability to deliver useful services to its customers.
NDoT treats its tax base (people who drive) like a business treats its
customers. CalTrans acts like a government bureaucracy. I don't mind
paying gas taxes in Nevada because I feel like I am getting my money's
worth.
The point being that as a general rule, organizations are responsive to
whoever pays the bills, since whoever pays the bills can refuse to buy
the service. For California DoT, this is the state government. For Nevada
DoT, it is the individual people. If you have to have a tax for
government provided services, these direct use-based taxes are definitely
better for the people; unfortunately, most tax jurisdictions are *not*
setup this way.
-James Rogers
jamesr@best.com
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