Voluntary taxation is a theory that states that taxation, naturally a coercive act, should be a voluntary act instead. The idea states that instead of people being forced to pay taxes by their government

Government

Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...

 they should have the option to pay taxes. In this theory people control how much they pay and where they spend it. The theory is a part of Objectivist politics and many Libertarian

Libertarianism

Libertarianism, in the strictest sense, is the political philosophy that holds individual liberty as the basic moral principle of society. In the broadest sense, it is any political philosophy which approximates this view...

 ideologies. Studies show that individuals will give to government, paying voluntary taxes to support specific functions. Donations average 22 percent of an endowment to government, and 27 percent to private nonprofits, and are influenced by their cause, level, and perceptions of effectiveness and efficiency.

State lotteries are an example of a voluntary taxation system.

The American federal income taxation system

Income tax in the United States

In the United States, a tax is imposed on income by the Federal, most states, and many local governments. The income tax is determined by applying a tax rate, which may increase as income increases, to taxable income as defined. Individuals and corporations are directly taxable, and estates and...

 is sometimes called a "voluntary" taxation system. Marjorie E. Kornhauser writes, "Most people never pay their taxes voluntarily, in the ordinary sense of the word. Rather, they are generally anti-tax, in that they usually would prefer to keep any income they receive than pay it to the government in taxes. Voluntary, in the context of taxation, simply means that people do not have to be compelled to pay their taxes through actual enforcement actions by the state." The "income taxes are voluntary" argument has not prevented U.S. residents who did not file tax returns or pay taxes from being prosecuted and convicted for tax offenses.

Lysander Spooner

Lysander Spooner

Lysander Spooner was an American individualist anarchist, political philosopher, Deist, abolitionist, supporter of the labor movement, legal theorist, and entrepreneur of the nineteenth century. He is also known for competing with the U.S...

 states, "It is true that the theory of our Constitution is, that all taxes are paid voluntarily; that our government is a mutual insurance company, voluntarily entered into by the people with each other; that that each man makes a free and purely voluntary contract with all others who are parties to the Constitution, to pay so much money for so much protection, the same as he does with any other insurance company; and that he is just as free not to be protected, and not to pay tax, as he is to pay a tax, and be protected. But this theory of our government is wholly different from the practical fact. The fact is that the government, like a highwayman, says to a man: “Your money, or your life.” And many, if not most, taxes are paid under the compulsion of that threat. The government does not, indeed, waylay a man in a lonely place, spring upon him from the roadside, and, holding a pistol to his head, proceed to rifle his pockets. But the robbery is none the less a robbery on that account; and it is far more dastardly and shameful. "

Example

Here is an example of how a voluntary taxation system could function.

A state would distribute tax forms that could be filled out by recipients. The forms would have options on them for what the recipient would like to spend his or her money on. For example, there could be a section for military spending, or separate sections for defense in general and specific conflicts in particular. There would also be sections to be for elected officials (who would still be necessary to carry out the wishes of the people) and also sections for charities.

The form would be divided into more and more sections so that people could specify their decisions. In other words the entire form would be under the category of general. Then there could be a section for education and then even further for elementary school education. People could choose which sections they wanted and contribute to those sections. For example they could contribute different amounts to each section of education or to the section of education in general, allowing their elected officials to decide the best way to allocate the money.

Support

The arguments for this theory are as follows:

• It allows greater freedom.
• It performs both the function of collecting money for the government and allowing the population to decide where money should be spent. It is similar to allowing everyone to vote on government spending except that it is in a different format.
• It allows government officials to easily keep track of the wants of their voters and the nation as a whole.
• It allows people to vote directly in a sense. For example they can decide that everyone should have health care by contributing to that section.

Criticism

The arguments against this theory are as follows:

• The government would suffer because it would not receive enough money.
• No one would pay taxes and thus the nation would fall into anarchy
  Anarchy
  Anarchy , has more than one colloquial definition. In the United States, the term "anarchy" typically is meant to refer to a society which lacks publicly recognized government or violently enforced political authority...
  
  .
• People with money would have a greater say in government than those without money.
• The forms would be difficult to create to adequately have every option that everyone would like. An option for "other" could become out of control in large nations.
• This would give the public a greater share in the legislation process, which could lead to what has been called "mob rule".
• The extent of freedom is relative to amount of money one has and as disproportionate wealth insures greater freedom, oppression is likely to occur to maintain that system for the sole benefit of the wealthy at the expense of the poor.

Sources

• http://findarticles.com/p/articles/mi_m0377/is_n112/ai_14466349 The end of taxation? by James L. Payne.
• http://www.mises.org/rothbard/mes/chap16e.asp Man, Economy, & State with Power and Market is a textbook with a section that describes most of the theory of Voluntary Taxation

External links

• "Voluntary" Taxation and the Consentof the Governed article describing the coercive nature of taxation
• An article on Voluntary Taxation