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Comment by h_tbob | Hacker News Reader

Believe it or not, taxes are not necessary for running a government.

People thought you had to have a king. Then Thomas Paine wrote *Common Sense* explaining that life goes on fine without somebody ordering you around all day.

Taxes can all be paid voluntary. Right now we think the only way is to use the old vestiges of force from times gone by… but in future years we will be appalled that people went to prison for any reason, let alone taxes.

It’s important when thinking about government to realize that we are still in the toddler phase. Just learning how to not abuse it to hit the people we don’t like.

Adulthood is when all government seeks the best for all citizens.

But as it stands… pay your taxes lol!

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> Taxes can all be paid voluntary.

We (the US) tried that with the Articles of Confederation and it doesn’t work. So much so that the founders got together and threw it away in favor of the Constitution. Funding the government must be done by force for it to work.

> Funding the government must be done by force for it to work.

Since the U.S. issues its own fiat currency, revenue isn't necessary to fund expenditures—the government can create new money as needed. Also, since the Constitution explicitly grants the power to issue and regulate money to Congress, it has long been argued that an independent central bank like the Federal Reserve is unconstitutional.

You are technically correct -- the best kind of correct -- but the consequence of minting new money as needed without pulling anything out of circulation is very high inflation, and the consequence of very high inflation is loss of faith in the currency, adoption of alternate forms of money, and ultimately, the diminishment of government purchasing power (money printing or no).

So the government technically can spend without taxing, but not if it wants to remain effective.

Are you saying the government should eliminate taxes and print $4.5T a year instead?

Isn’t it already happening?

What do you mean its already happening? The US takes in $4.5T a year in tax revenue.

Or are you implying that they already print some money today so they can just print a lot more? Why do you think the government doesn't just print $45T and eliminate all their debt? I mean why doesn't every economically poorer country just print the equivalent of $100T and leap past the US?

See, we get the worst end of this stick.

The Federal Reserve does not issue money...The U.S Treasury issues money.

The Federal Reserve processes payments for the federal government, manages the the flow of money through banks, and acts as the bank of last resort. It is also, very importantly, not an independent bank; it was created and authorized by Congressional statute to be the central bank of the U.S..

If at first you don’t succeed, try, try again!

What innovations would we have today technologically if people said that about AI for example. Imagine if Elon said “no point in making openai. AGI has been tried and failed”

It’s was tried hundreds of years ago in the days before the internet. That alone should give us the courage to try again. Things happen so quickly now, we could set up a different incentive structure.

Let’s say you have 10 billion dollars. Would you pay 1% annually to have it protected by the government?

If you fail to pay.. no visits by the irs. You’re golden… but if somebody steals, since you didn’t pay your “social contract” and give back part of it to government and social programs, you don’t get protection.

I think this is a very basic idea. I’m just saying we need to be creative and have the courage to try new ideas. Failure is ok! That’s how we know we are growing.

It’s like my dad said. “If you aren’t making mistakes, it generally means you are working for someone who is”

In other words the leaders of the world make mistakes as part of the process of growing. Let’s stand up and change things. It may not work perfect, but at least we will learn so those after us can do better!

"It doesn't work" for a bloated bureaucracy all encompassing everything.

It worked fine when the state was kept small.

> Taxes can all be paid voluntary.

Unless you're suggesting some other kinds of consequences for failing to pay taxes, what is the incentive for complying with this voluntary tax payment scheme? And if there is no incentive, why would anyone pay taxes, except to put themselves at a purchasing-power disadvantage relative to their non-taxpaying fellows?

> Believe it or not, taxes are not necessary for running a government.

I think even proponents of modern monetary theory even think taxes are necessary, although from the perspective of MMT governments can fund programs by printing money and only need to use taxes to control inflation.

I suppose under that perspective the government could simply print extra money and distribute it selectively to control who is affected by inflation, but that would be a fairly unusual approach even by the standards of MMT which is fairly controversial.

Otherwise, you need some type of taxes for anything that requires government spending, and essentially everyone who believes that governments should exist wants at least some forms of government spending.

Social programs and equity initiatives would never receive enough funding without taxes enforced by violence.

Let’s think about government. How can bill gates be a billionaire without government?

It’s impossible. There’s no way he can defend his empire. There’s no way he could have gotten his empire in the first place. It all rests on the strength government provides.

So you make a simple rule. Government requires 1% of net worth annually to protect your money.

If somebody steals from you, and you didn’t pay tax… your choice. He would pay. Everyone would pay.

Why would government do that? It’s the social compact. In order for the billionaire to keep his money, the government would require a fee to be paid to charity.

Not complicated. But as I said, we are still in the infancy of government. We are innovating faster now, but imagine innovating in government as fast as we do in Silicon Valley… that’s the goal!

The issue is not "all government bad," the issue is that generally government quickly expands to spend excessively on low/negative-ROI activities.

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