I think a lot about this very question and it's one of the primary subjects of my research, so I think I could bring quite a bit to the table.
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Originally Posted by mkpunk
I've read this philosophy from different libertarians who talk about taxes being theft and that they should be illegal because of that. But what I don't understand is why do people want that? Don't people realize what taxes pay for?
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First off, they might want it because it's the right thing to do and they can see beyond their own greed, an ability you haven't demonstrated here. I'm always amazed how
libertarians are castigated as selfish and then we see anti-libertarians asking people to oppose libertarianism for selfish reasons
.
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- Schools, we forget that on the local level schools get their budgets from the state government. What do we do, just have private schools that you have to pay an arm and a leg for? We already have that, it's called college and look at the student loan bubble at about 20K per student shackling them in a way that many cannot move.
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Your first sentence is immaterial to your point because state governments could easily wash their hands of it, and have local governments raise their own taxes, seeing as it's the same pot of money that they're taxing no matter what level does it; state vs. local vs. federal is a question of expediency rather than morals. Public colleges have long existed and government has given grants and subsidized student loans for decades, so it is a market very colored by the presence of government; as such we should be very cautious in extrapolating from that to a free market.
Also, the only reason private schools skew high end currently is because the low end of the market is cornered by the public school system which is free at the point of service. The same phenomenon is seen in senior citizens' health care; Medicare corners the basic end of the market, so the only private plans that are offered are high end or add a lot of value, yet we don't use that to argue that in the absence of Medicare the only plans available would be high end and very expensive, since we know that plenty of low end plans exist in other demographics*. The same holds true for schools; also, the taxpayers, which overlap with the people that use them, are already paying an arm and a leg for the public school system. If public schools charged tuition the same way private schools do their prices would be twice as high for comparable quality services as compared to their competition and they would quickly go out of business.
Education, like food, is considered an essential product for children and youth by the population (obviously since they go to great lengths to get it and acquiesce to paying for public schools), and the absence of a public school system would create a crying demand for education options at the low and middle ends, and crying demand means opportunity, monetary and otherwise, for those who are interested in educating children to carve out a niche in the market that they couldn't previously. Those in your community who are interested in childrens' education, which is a
large group, will either use their own money or raise money to build new schools, a task that will be significantly easier than it is today since people will have money in their pockets that otherwise would have been taxed away. Those legions interested in serving the low to middle end will use various methods to keep costs down so that their client base can afford to send their children there; when there is a need creative minds will focus their efforts on filling that need, and undoubtedly costs could be brought down to a level far below current norms since currently there is no incentive for efficiency at the low end. Donations could also be solicited to bring down tuition even further. There would undoubtedly be a far wider variety of schools than there are today, since all of the energies that would be focused in disparate directions of education are currently focused upon one large homogenous system; every founder and donor's dream of education reform could become reality immediately, crafted by their and their donors' hands. Half-day schools, progressive schools, classical schools, gifted schools, remedial schools, extended-day schools, mixed-age schools, single-sex schools, and all the rest of it would all become possible on a mass scale in a way unimaginable today.
On the cost front, not that much innovation would even be needed. In the 19th century Joseph Lancaster and Andrew Bell developed grammar schools that ran under the
monitorial system in the decades immediately preceding the advent of public education, eventually bringing per pupil costs down to $50 per pupil per year (adjusted for inflation of course), which even the poorest of the poor were able to pay. Lancaster himself, despite his motivation being not-for-profit, actually earned a high income from his schools despite the costs being almost nothing. If people then could bring costs down that much surely we could replicate that feat; those were private schools that actually existed in the absence of public education that didn't charge "an arm and a leg", not only disproving the conventional wisdom but currently standing as the cheapest schools ever invented.
Homeschooling is another sound option and one currently in existence, on average costing $600 per pupil per year, which is very affordable. The final leg of the low-cost private education market would undoubtedly be the religious schools, which typically keep costs down through donations to the church, and are still a popular option among those inclined to religion. Right now the Catholic Diocese of Wichita has been so effective in soliciting contributions that Catholic elementary and high schools in Wichita don't charge any tuition and haven't since 2002 (
source). Since this is with most donors having to pay school taxes as well, undoubtedly this feat would be a lot easier in the absence of public schools. This is an example of private schools not charging an arm and a leg that
exists right now; you can't get further away from "an arm and a leg" than zero.
*Not that I'm defending the awful corporatist U.S. health care system; it's just the most obvious example I could think of how the market options would drastically differ in the absence of a public option.
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- Roads, roads are funded by the gas tax. If the gas tax is repealed with other taxes, who would fund the road you drive on your errands? Who will fund the bridge you cross over to go to work?
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Anyone who wants to build roads and can spend his/her money or raise money from others would fund it. Roads are a vital interest to just about the entire economy so the interested parties would be virtually the same as it is now. Since private roads largely went out long before the automobile, it cannot be known with certainty how it would be funded or operated or if the quality would be better or worse. We can make educated guesses, though.
The very first limited-access road ever built was privately built and operated as a toll road by William Kissam Vanderbilt II in 1908; it was 14 miles long and was privately owned and operated until
1938.
The Dulles Greenway is a fully modern tolled freeway and, although highly regulated, is privately owned, has never received any government money or subsidy, and is policed at the owners' expense. So obviously the private sector is capable of funding and building modern roads. Further evidence is the fact that the private for-profit sector has no trouble funding the construction of skyscrapers all by itself, and the capital required for skyscrapers is comparable to road infrastructure; the largest road interchanges have costs comparable to large skyscrapers. Lower-end road infrastructure is largely privately-funded right now: very few parking lots and driveways were built with public money, and building secondary roads would take only a fraction as much effort (similar quality pavement, much less quantity). Presumably these would be free to use like parking is now outside of city cores because it's too inconvenient for the customers to toll them, and so the cost would be absorbed elsewhere. My guess is that arterial roads would be built with the same concept in mind, except funded by a group of businesses that need or want that route. Residential streets could be funded without too much trouble by the residents' donations or contributions. Undoubtedly there would be much geographical variation in how roads are funded and operated and how or even whether they get built, but then again we have that right now.
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- Public Transportation, similar to roads public transit such as buses, trains, subways and lightrail systems can only run on fare so much, expansion of lines rely on money. Who pays for that?
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Private bus companies already exist and the
Detroit Bus Company (see also
their website) runs the same routes as the nigh-defunct government bus used to, runs on biodiesel, is more financially efficient, plays background music, provides free rides to work for many people,
provides donation-funded free door-to-door bus rides to after-school programs, which is superior to regular government bus service. In the same place people have been able to
construct vastly superior bus benches on their own and undoubtedly would do much more if it weren't for government obstruction. Companies even today sometimes run shuttle buses to get workers or customers to their place of business. So obviously the private sector is not only capable of running buses but is vastly superior, given the will among the people to do so.
As for trains, subways, and light rail historically most of those were privately owned, operated, and funded, including the NYC subway system, and none of them had any trouble expanding based on fares alone. True, the train companies folded due to complex causes, but it's not as if Amtrak has been in an expansionary mode.
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- Defense, if there is no taxes on the federal level who will cover equipment for a war brought upon us by an attack?
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There really isn't any precedent for private funding of that, unlike the others, because it is perhaps the most widely agreed-upon function of government; even libertarians believe it is a legitimate function of government, so the only people that want to make that privately funded are the anarcho-capitalists. Thus you critiquing "libertarians" on this is somewhat off-base. The means of funding defense are speculative in the absence of modern examples, but that shouldn't stop us from trying to speculate
.
The military procures its equipment from private manufacturers, so we know that the private sector can make military goods. We know security of the policing sort can be funded privately given the viability of the
Threat Management Center and others*, so we're part of the way there. Defense is largely a matter of jurisdiction, and whether you have a monopoly jurisdiction or competitive jurisdictions will affect the defense market. Also, your question is more about
standing armies than
defense in general. For standing armies, without going into too much detail, funding models include donations and/or subscription fees, from companies and/or individuals that so choose. Theoretically it could be funded this way, but we know very little about how it would work in practice, since none of the societies that had private defense such as medieval Iceland** ever had to fight an invasion, and standing armies are strongly associated with state funding. Defense in general requires small, if any, standing forces and these could be easily funded by subscriptions or by donations. Historically when a force was needed volunteers mobilized, trained, and procured equipment, and if there was an invasion of the country I'm sure truckloads of money would be donated by the fellow countrymen of those invaded. All you'd need to do is have people donate their money as well as themselves when they volunteer; whether such a force would function better than a tax-funded force or even work at all is of course unknown, but such an event is conceivable.
*Not including Blackwater and their brethren; true, they are mercenaries but they are "private military contractors", the contractor part referring to the fact that they get contracts from governments. Blackwater's ilk are more similar to the
18th century Hessian soldiers than what a privately-funded invasion defense would (probably) look like.
**Interestingly, Iceland has no standing army today and hasn't since 1869. Vanuatu, Panama, Haiti, Monaco, and Mauritius have no standing army, and 15 other countries don't have any military forces at all, though all of these except Costa Rica and Liechtenstein have protection treaties. One way to wrap our heads around this question is to imagine individuals, neighborhoods, or companies as very small states under international law, and the defense market as analogous to these small states' arrangements, with Liechtenstein and Costa Rica being the equivalent of loners who would enter into no arrangement and provide for their own defense. At this point, though, we are in anarcho-capitalist territory rather than just "defense without taxation" territory, so you can see how difficult this question is to answer with any definiteness. The defense function is the foundation for everything else a state does or whether a state exists at all.
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