Why True Libertarians Will Advocate a Head Tax

Yeah yeah I know true libertarians will advocate no tax, but I will argue that those libertarians who do advocate a specific tax should be advocating a head tax.

Many libertarians tend to lean toward taxes such as the flat tax (where everyone pays the same income tax % regardless of their income; ex. 10% income tax for every individual) or the fair tax (a flat sales tax with a prebate, a monthly check the government sends out to poor families so they don’t have a burden too large; ex. 10% sales tax for every sale with $1,000 check to families under $x income).

The fair tax has unfortunately gotten a lot of support in part due to misinformation about its real effects. Proponents argue that a consumption tax would shift “spending from consumption to investment” by discouraging consumption and encouraging savings. I have already exposed this myth in my previous post where I explained how a consumption tax is itself an income tax. In fact, it is impossible to institute a tax without discouraging savings. Not only that, but I have no idea why a libertarian would be advocating higher savings in the first place. Savings is only future consumption. That being said, what is more attractive about future consumption than present consumption? Shouldn’t such a choice be completely left up to the individual?

Although I would prefer a flat tax over the current progressive tax system, where wealthier individuals have a higher % of their income taxed, I think many libertarian proponents of a flat income tax should be aware of a way a flat tax could be instituted and people could be worse off. After all, (all other things equal) individuals will choose to live in the country with the lowest taxation for themselves. That is, people would prefer to live in a country with a progressive tax rate of 8%, 9%, and 10% over a country with a flat tax rate of 20%.

So while I could see myself supporting either a fair tax or a flat tax as long as either appropriated less resources from the private sector (something very difficult to tell in the case of comparing a sales tax to our current system), the tax I would advocate as a libertarian would be a head tax (ex. every individual has to pay $1000 every year to the government). After all, even in the case of a flat tax, why should any individual have to pay more than another individual? Even if you treat government services as market services, where in the market do individuals have to pay more for a good simply because they earn more income? It would asininity if a person making $100,000 had to pay $5.00 for an apple while a person making $5,000,000 had to pay $250.00 for the same apple. Progressives like to argue that a wealthy person receives more from a government’s services than a poor person does because a wealthy individual has more wealth being protected. However, a wealthy individual would be the one more able to pay for the protection of his wealth in absence of the government; a poor person would have a much more difficult time.

Not to mention that a head tax would have to be extremely small in order for everyone to be able to pay it. It’s funny that I thought this was a con of a head tax when I was younger, but now it’s probably the largest pro. A small government would be absolutely necessary due to this limit on taxation and there would likely be far more civil and economic liberty.


Posted on December 23, 2011, in Economics, Ethics and tagged , , , , . Bookmark the permalink. 1 Comment.

  1. the flat tax is usually advocated along with an exempted income level. something like 12% flat tax on every dollar after $20k. so if someone makes 15k, they pay nothing. but if they make $20,001.00, then they pay $.12, since they only made $1 over the $20k. on the flip side, if someone makes $1 million in a given year, they pay $117,600 (($1,000,000-$20,000)*0.12). overall, its negligible for the higher income, but it makes a world of difference for the low income families. and best of all, it prevents conservatives from complaining about class warfare, since everyone gets the initial $20k exemption.

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