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More on Voluntary Taxes

My previous post on taxation generated a number of comments, many of them focusing on worries about coordination problems and free riding. Over at Big Think, Will Wilkinson makes a similar argument:

Suppose I’m a utilitarian convinced that human consumption of meat causes a huge amount of animal suffering. And suppose I love meat, and giving it up would leave me worse off.  I would happily comply with a no-meat-eating rule if I thought others would likewise comply. But in the absence of a mechanism (whether internal/moral or external/political) to enforce compliance, I rationally believe that my compliance with the no-meating-eating rule will have zero effect on market demand for meat. And suppose I rationally believe my heeding the rule will only make me worse off while making no animals better off. In that case it is perfectly rational to continue to eat meat even if I believe that it would be immoral to eat meat under conditions of general compliance with utility-maximizing rules. I think Matt’s voluntary taxpayer case is exactly analogous.

Will doesn’t address a question I raised in the comments thread of my original post. If a coordination problem allegedly discourages people from giving money to government, why doesn’t it also discourage them from giving to private charity? My donation to the American Heart Association isn’t going to do much, by itself, to speed progress in medical research on heart disease, just like my donation to the Federal Government isn’t going to do much to speed progress in paying off the debt. But people give abundantly in the former case, and not in the latter. Appeals to coordination problems can’t explain why.

Glen Whitman and Arnold Kling point out another problem with Wilkinson’s argument.  Here’s Kling:

I have a hard time coming up with a model in which it makes sense for Warren Buffett to refuse to contribute more to the government unless the rest of us also are forced to contribute more. In order to come up with such a model, I would have to assume some extreme “lumpiness” of public goods. That is, at the current level of government revenues, the marginal dollar produces no public goods, but a huge “lump” of new dollars would create a threshold effect that suddenly would produce a lot of public goods. That model strikes me as totally unrealistic relative to where we are today.

I tried to make this point in the comments thread of the original post too, but Kling has done a much better job putting it succinctly, and Whitman fleshes out the details nicely.

It does seem to me, however, that there might be at least one public good that is suitably “lumpy” to make Wilkinson’s argument work. Suppose what you want from taxes is not just for the government to provide people with education, or medical care, or whatever. What you want, instead, is for us all as a society to chip in together to guarantee these goods. In other words, it’s not just what you buy with the taxes that you’re aiming at, it’s the fact that we’ve all bought these things together. If that’s Buffett’s goal, and maybe it is, then his giving money to government voluntarily isn’t going to move him any closer to it. Universal, coercive taxation seems like the only answer.

But how attractive of a goal is that, really? Even if it has some attraction, it would seem a bit perverse to prioritize method by which aid is provided so far above the actual aid itself that you make your contribution contingent upon getting the method right. Government and the taxation used to finance it are, at best, a means for making people better off. They are not ends in themselves

 

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