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PaperclipPerfector  2mo ago (text post)   33937 thread views

Culture War Roundup for the week of February 10, 2025

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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.)

  1. The King's Due: The king is the rightful owner of all that's in the kingdom his army protects, and so he has the right to tax your wealth as a subset of his. He makes sure to tax the wealthy more so they can't afford to raise an army against him and become the new king.
  2. The Common Pot: The people of the community each give a share of what they all have, and usually the ones who earn more give more. This way they can pay an army to keep them safe.
  3. The Market Fee: The country is a meta-market, paying an army to create a safe place where businesses and marketplaces can exist safely, without fear of disruption by foreign armies. They and their customers pay a portion of their economic activity to fund the army, proportional to the business they do.

(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.

Justifying taxes is easy. Starting from the perspective that we're all naked apes with no particular duties to each other (and even ourselves) it serves our goals to organize ourselves such that we can work together for common benefits. It also serves our goals to interact in other apes in both cooperative and coercive ways to ensure our well-being is enhanced. From there, we can yadda yadda yadda the obvious utility of state-based organizations where we provide each other with complex systems of behavioral incentives to ensure good outcomes for all, and set upper and lower thresholds for how coercive we allow ourselves to be based on purely practical judgements. There's no fundamental difference between taxes and theft, but that's okay because theft is only consequentially bad.

Or alternatively we can look at religion for guidance. Hey, what does the pope think about taxes?

There's no fundamental difference between taxes and theft, unless it’s designed from the ground up not to be theft. And that’s what the FairTax proposal would do: remove the famous libertarian / anarchist-capitalist moral complaint against taxes. Don’t want to pay taxes? Don’t be a business owner in the great market of America.

Even the so-called "fairtax" is still using the implicit threat of violence to coerce people into giving up money (i.e., the abstract potential for goods and services).

Just bite the philosophical bullet and concede that the only reason any act of collective coercion can ever be "just" is because justice itself is only another act of collective coercion.

If I go into Walmart and text someone to come buy something from me there, Walmart is within its rights to have me ejected, and my customer. Why? Because it's their space. Similarly, if I arrange with a barber to meet her at the local Supercuts where he isn't one of their barbers, they'd tell both of us to leave, and if we didn't, call the police. This is a "threat of violence" which is fully justified by the property rights of the business. I assume you consider these "the collective coercion of justice" too, along with the very idea of property rights?

I assume you consider these "the collective coercion of justice" too, along with the very idea of property rights?

Yes.

Because it's their space

It's only their space because we, as a society, have agreed that it is useful to enforce a concept of exclusionary control over particular patches of land that can be delegated to other people. Now I'm not saying we shouldn't do that. I think private property, and justice, and taxes are useful concepts to have. But they're only instrumentally good. There's nothing intrinsically wrong about limiting the extent to which we enforce private property rights.

How does this extend to non-humans? Primates show evidence of possession-based behaviour, as do young infants and of course many species will defend their land, den or recent kills.

It seems far more likely that our instincts about property came first, and our legal philosophy about it came later.

EDIT: this was a reply to your last message only, the thread above is kind of confusing.

In my attempts to turn Triessentialism from "noticing an interesting pattern" into "a viable philosophy for life and business," I've recognized possession of things and territory as part of the vertebrate brain's instinctual ontology. It's so powerful and human an instinct that the only thing which does more damage than following it is trying to squash it entirely. (See the history of socialism.)

Possession, linguistically, indicates a relationship, not specifically ownership. Its default use as an indication of ownership is a sign of the power of the proprietary instinct. C.S. Lewis wrote in The Screwtape Letters about demonic tempters who are quite keen psychologists and studiers of the human condition in their quest to gain souls for their "Father Below." One passage on linguistics has always stuck with me and has shaped my view on ownership:

We produce this sense of ownership not only by pride but by confusion. We teach them not to notice the difference sense of the possessive pronoun - the finely grade differences that run from 'my boots' through 'my dog', 'my servant', 'my wife', 'my father', 'my master' and 'my country', to 'my God'. They can be taught to reduce all these senses to that of 'my boots', the 'my' of ownership.

I've written elsewhere about my ontology of values: utility, experiences, status, and agency. Everything someone values as a possession (or makes an object of commerce) conveys at least one of these four values. Possession of land conveys the status of landowner which fulfills the deep-seated mammalian need for territory, makes experiences on that land relatively controllable, and enables both utility (toward goals) and agency (control). It is seen as something to pass down to one's heirs. Ownership of land (as with any owned thing) can also convey the four debts: hassle, bad experiences, negative status, and loss of other choices.

I have concluded that legally recognizing this instinctual reality is a societal good.

How does this extend to non-humans? Primates show evidence of possession-based behaviour, as do young infants and of course many species will defend their land, den or recent kills.

I don't understand this question. I think nonhumans also have no natural rights? My whole point is that possession-based behavior is not intrinsically good even if it's often a utilitarian good at the individual (or genetic, or societal) level.

The innate possession instinct only applies to chattels, not land. (And only questionably applies to more chattels than you can carry). Given how much of libertarian dispute resolution comes down to "the landowner decides what to allow on his land", you need to justify property in land to get a workable libertarianism. This is the hard part of libertarian ethics - particularly if (like most libertarians) you are dependent on the goodwill of people who benefit from the existing pattern of land ownership. Our moral instincts about land ownership come from our views on the proper relationship between warrior elites (the original landowners) and peasants.

Locke/Nozick come up with a theory which makes sense, but if taken seriously requires the Norman robbers and their successors in title to give back the stolen land of England, and the parts of the United States where the Indians practiced a minimal level of land stewardship to be returned to the original owners.

If you want to justify your land title based on the lapse of time since the last time the land was stolen, then you have the problem that the State's rights to sovereignty over the land are just as ancient.

Ayn Rand dodges the issue by accepting that moral rights in land stem from the sovereign granting the original land title.

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