• DRK

The Big Question

Updated: Aug 14, 2019

I read an article, recently, that posed a big question.

The question was, "What would happen if no one paid taxes?" It was asked by an interviewer to a professor of Economics at Hunter College. This was based on the American government, but the gist of the matter could easily apply to other nations, as well. The whole interview can be found here:

The overall answer was exactly as one might suspect. If no one paid taxes, society would basically collapse, and I am para-phrasing. This is a less-than-informative conclusion drawn from the interview that the interviewer and person being interviewed probably wants the answer to be steered toward. In their defense, they simply might not see another way. Either way, I was disappointed.

One, there is an assumption made that without government, there can be no economy. Since when did government produce the economy? Last time I checked, it was people/society that produced an economy. Government just regulates it and attempts to create some kind of level playing field (or, it should). I will let the argument of that particular point rest there, because the next point is the one that drives home most of everything wrong with the culmination of the interview.

If someone asked me what would happen if no one paid taxes anymore, my first answer would have been non-tax revenue. Yet, not once was there a mention of non-tax revenue in this discussion. A professor of economics answered the question of what would happen if no taxes were paid and he did it while completely omitting a major source of revenue happening around the world right now for just about every government. This seems to be a common problem for much of society, which I talk about in my ebook, The Next Step. Tax supporters and even opponents of taxation, alike, oftentimes just don't see another way to pay for government other than taxation.

A more complete answer to the question could have been this:

If people all of a sudden stop paying taxes, that would be bad. We rely on government for a lot of things and instantly cutting off it's supply of funding would cause much turmoil in the world from just the disruption alone. Whether or not we could bring society back up-to-speed is to be determined, but not fully necessary to have to consider, because non-tax revenue is present. Governments are funded with multiple forms of non-tax revenue every day, discussed at length in The Next Step. Is it as much as taxation? No. But, non-tax revenue has grown exponentially, decade after decade, and shows no signs of stopping. Bottom line, the government would still have an income, and there is no reason why that income couldn't increase, as there are many methods of non-tax revenue which have yet to be implemented and many more that could be improved upon.

This means government would not automatically shut down, if taxes stopped being paid. Furthermore, why would they stop all at once? Portraying all taxation stopping at once and then asking what would happen is no different than asking would you rather eat a rock or would you rather eat dirt, giving you a choice that's not really a choice. The reality is, all of society is not going to stop paying taxes at the same time. If taxation were to go bye-bye, it would be done (should be done) with a more methodical approach over a long period, fading one-by-one, to give non-tax revenue a chance for more development and a greater foothold at replacement.



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