Expanding on my posting yesterday about the Estate Tax, I decided that I should clarify and expand my view on taxes and associated subjects.
It's important to start at the beginning: what is the purpose of taxes in the first place? The answer is simple: taxes are how we pay for the activities of our government.
The key here is in how you think about that. My view is that, essentially, the government itself is a contractor - an organization that we the people have "hired" to do a job. Taxes are how we pay for it, exactly the same as we'd write a check to an aluminium siding contractor.
In this case, of course, the job is much bigger: all the things that we either cannot accomplish individually but require nonetheless; or things that make our lives easier or our society run more smoothly.
The Constitution is, viewed in that light, an excellent contract. It explicitly sets out what we require of our contractor, and what power we will cede to that contractor over our lives and over society generally in order to accomplish the tasks we are asking of it. The Constitution directs our contractor to provide for the defense of the U.S., to establish a common currency, to "promote the arts and sciences", and so on.
Viewed in that light, it's clear that taxes are necessary. Not in a moral sense, but in a practical sense, and in a contractual one. What form they should take, however, is not nearly as clear.
Currently, there are a myriad of taxes: income taxes, excise taxes on specific items/services, gift taxes, the estate tax, and so forth. On a state and local level, we also have sales taxes and property taxes (more on those later). The rules regarding all these taxes are very complex, requiring a massive bueraucracy to administer them, and an entire industry to interpert them for the public. There is constant debate over who should pay which taxes, at what rate, etc.
This is partly due to the understandable human desire to pay as little as possible; to get a "free ride" if that can be accomplished. It is also due to the massive expansion of our contractor, and the scope of its responsibility and powers, far beyond anything our original contract ever contemplated.
And this is the heart of the problem: the government has become more than a contractor; it has become an end unto itself, and it has taken upon itself the power to expand its own scope and power at its discretion. With such expansion comes, naturally, higher costs, which must be paid by the American people.
The government has taken it upon itself to reshape the American people into what it believes they should be. One small example is the myriad rules towards the use of psychoactive chemicals by the citizenry. To wit:
Some psychoactive and potentially addictive substances are deemed acceptable for any citizen to use at any time, and are not specifically targeted with excise taxes: caffeine.
Some are outlawed to citizens below a certain age, and are specifically taxed due to their potential harm: nicotine, alcohol.
Some are allowed only by perscription: ritalin, coedeine.
Some are completely outlawed, with minimal penalties for use or sale: marijuana
Some are completely outlawed with heavy penalties: cocaine.
Of course, nowhere in our original contract does it call for the government to regulate which chemicals citizens may use, in what quantity, or at what age, or with whose approval. Certainly nowhere is it specified that the government should adjust tax rates so as to increase or decrease the use of such chemicals.
Similarly, nowhere in our contract does it specify that the government should have any role in redistributing wealth, or in enforcing any specific concept of "social justice". Yet this is precisely what the estate tax does, and, more, what its proponents claim in support of it.
All this points to the clear fact that whatever form ou tax system takes, it should be as simple as possible, as entirely devoid of attempts at social engineering or other such things that are not called for in our contract with the government. A flat tax, with all citizens paying an equal percentage of their income, would seem to be the most rational system. Wealthier citizens would pay more as their income rose, but this can be justified - as their wealth increases, it can be argued that they have more things to be protected by the government and more call on the other services of the government.
Earlier I mentioned local taxes. These are, generally, even more "contractual" than federal taxes - it is, usually, very clear what services are paid for by which taxes. For example, in most states, property taxes go directly to a few services: public schools being one of the main ones. Further, in most jurisdictions, any increase in such axes must be directly approved by the voters, and such increases can only be applied to the specific purposes set forth in the issues as they are written.
This is the ideal model: an explicit statement of what the taxes will pay for, and direct control by the voters. If they choose not to pay; if they choose not to contract that "service", they then must live with the result of that, for good or ill. In either case, it makes clear the proper relationship between citizen and government.
Obviously the federal government, with its large responsibilities, and the American people, nearly 300 million strong, cannot do things quite that way; it would be far too unwieldy.
But the principle there should be observed as far as possible, as should the principles set forth in the Constitution.
And thus, clearly, the estate tax should be immediately and permanantly repealed. And we're back where we started.