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FairTax as the fairest tax
The concept of a market as a business fascinates me. It's a business that's a container for other businesses.
The ur-example is a hair salon in a strip mall (business apartment). The manager of this strip mall business (who may or may not be the proprietor/owner of the business) rents one of the suites to the proprietor of this salon. The salon in turn furnishes each of the salon booths and rents them to the individual hairdressers, each one an independent contractor. This salon has a single payment system where the money is divided between this hairdresser and the salon, but any tips you give the hairdresser are theirs to keep. (This example is not how all salons operate.)
In this example, is the hairdresser paying the salon a booth rental out of the total cost of the haircut, or is the customer paying the salon a fee for getting a haircut there instead of having the hairdresser come to her home and cut her hair in the bathroom?
I've decided it makes the most sense to call the salon's cut a "market fee", a part of the price which the customer pays but the hosted business doesn't get to keep. It's a true three-way transaction, not a pair of two-way transactions.
So how does this become a conversation about taxes?
Three simple models of taxation
Philosopher Robert Nozick famously came up with a way to philosophically justify private property in a society, but failed to find a way to justify taxes, which derive from private property, other than the sheer necessity. (His Anarchy, State, and Utopia is a magnificent book.)
(Please note, whichever model of taxation you prefer or use internally, modern-day taxes can be seen as any or all of these. This is a simplistic philosophical model.)
In cases 1 and 2, the obligation of the nation's people to pay taxes is based on what other people want (1) or need (2), and only respects personal property if there are safeguards in place, and only while the king or the people respect those safeguards.
The FairTax is a Market Fee form of taxation which automatically respects private property by only taxing business transactions, and by allowing anyone to resell property that has already been FairTaxed once without ever paying tax on it again. It even builds in a dividend for the people, the owners of the national market, equal to the taxation they'd pay at the poverty level, making the government free on the net calculation for the poor.
There are other businesses that operate on this model.
One that comes to mind for no particular reason is 'dancers' that need a stage and audience will rent stage time in a 'venue' collect gratuities from the audience and individual audience members during 'private dances'. They may also receive a commission on the sale of some of the venus refreshment options.
Yes, good points.
Defining differentiating lines between independent contractor, commissioned producer, employee, slave, etc., is vitally important to labor relations. Often it comes down to pay structure. Are they only paid room and board (food) in exchange for labor? Slave. Are they paid a sum, part up front and part upon completion, for an artwork? Commissioned producer. Are they paid wages with 1.5x for working more than 40 hours in a week? Employee.
In a perfectly free market, or in a criminal "black market", power dynamics are more likely than negotiations between peers. The meta-market of government can, by dint of owning the market (both jurisdiction and coin), restrict the types of allowable employment, business categories, products, services, etc. This is similar to how a salon can choose to restrict its hairdresser contracts to those with certain qualifications and manners, require they follow a dress code, and kick out unruly trespassers who aren't planning on being customers.
Interestingly, the "insurance" rackets of mobs are criminal meta-markets: they keep away the rabble and the other gangs' toughs for a cut of the profits, occasional access to the shop's environs for criminal dealings, favors unspecified, etc. (As a minarchist, I prefer a republic that prevents criminal meta-markets, of course.)
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