Can government exist and function without taxes?

[musashi]

Can government exist and function without taxes?

Saudi Arabia does not tax its populous; The state of Nevada in the US does not charge its citizens income tax or property tax. Windfalls for both these states (oil and gambling) have allowed them to not tax their citizens.

Obviously the services and assets used by government have a cost. But is there another way to fund government besides taxes?

[DagnyTaggart]

without taxes? erm so where does thier income come from?

you say windfalls like renting the land that oil is drilled from? things like that?

[Emizzon]

In some round about way you answered the question (or the way I read it supported my answer of "No")

Saudi Arabi doesn't have a tax, but they have another source of income to take it's place. Just like Nevada and the money it gets from tourism and legalized gambling. These are alternative sources of income that can replace any possible need for taxes.

I do believe a government can exist with minimal amount of taxes, if they'd stop paying for unnecessary things.

[musashi]

How can you have government without taxes?

What if government were structured as a “pay as you go” situation? We have this sort of situation with our POS’s use fee. This is an understanding amongst two parties, the simplest of political systems.

I think Eve is a fantastic simulator for different types of governance. Obviously the collectivist, tax-based systems that work in RL, work in Eve as well. But couldn’t we have the courage to try another approach? An approach more in communion with our objectivist perspectives?

In Eve we have primarily three corperate expense streams: station rents, defender insurance and treaty fees. The customary and distasteful approach would be to charge corp. taxes to cover these expenses. But is there another way? I will explore the use fee approach for the major expense, I am sure we could come up with ideas for the remaining expenses.

Station Rents – What if players assumed and divided the cost of each station where they operate. I’ll use myself as an example and make up some numbers for illustration. I keep personal hangers at four corp stations. Eystur (20 players, total weekly rent 40,000 isk), HLW (10 players, total weekly rent 40,000 isk),, 0-G (4 players, total weekly rent 40,000 isk), and Egbinger (4 players, total weekly rent 40,000 isk). My share of the rent in the stations I use could be computed 2,000 + 4,000 + 10,000 + 10,000 = 26,000 isk per week.

Pain in the backside you say…. YES

Who’s gonna do it you say… Well someone that gets paid to do it I say. What if one, or more, players were given a franchise to coordinate and determine rent on specific stations. TTI would automatically bill this franchisee for the station rent. In return the franchisee can charge let’s say 3x the rent to the players using the station. Each week the franchisee checks the personal hangers to see who is using the station. They divide up the rent and bill to each user.

I know this mechanism is more complex than we have become accustom to, but it has a number of benefits.

• It puts the player in control not the taxman. If you want to minimize your expense you minimize the number of stations you hang out in.
  It helps focus our corporate decision-making. We have about 30 stations and about 20 are not used. These idle stations have posterity value and prestige, some of our senior partners want to keep them. Fine, by this system our preservationists can show their desire in the most effective way – with their wallet!
  The administrator of the system would actually get paid for his efforts. Currently MarkA does a lot of administrative stuff. Time spent that he doesn’t get paid for – this is not proper.
  People will naturally move towards minimizing thier expense, which means we will naturally become more physically concentrated, which in turn could lead to more active cooperation between us.
  You know exactly where your money is going and for what purpose. Whenever taxes are collected money is commingled. There is little or no visibility for how the money is spent, there is the risk of theft, there is the generation of bureaucracy.

I will continue thinking this through in future posts. Can anyone think of pay as you go alternatives to the other expense streams for the corp?

[Max Delorian]

The main problem with 'pay as you go' is its application to giffen goods. Take a real world example for instance, lets say, street lighting. How do you ascertain who gets the benefit of street lighting? Not often each house has a light directly outside, and even if they did, the whole street would benefit from each and every lampost, since each plays its part in illuminating the street.

So we charge people who benefit. But what if then, one house says it refuses to pay. That house is still benefiting from the rest of the street lights, and is getting it for free. What is then stopping everyone refusing to pay, until there are then no street lights, upon which people get dissatisfied, street lights are turned back on, then rinse and repeat. Effectively the only way of providing those street lights, is to tax each house which benefits evenly, to cover the cost of the lights. The same goes for roads, bridges etc, and is why in the UK we have a road tax. If there was no road tax, you'd have to toll every person who uses a certain sectionm of road, whcih would become most inconventient stopping to pay a toll each time you turn a street corner, or get on/off a highway.

I fully understand philosophical resistances to income taxes. However, practically there are many things which cannot be provided by the market with out rediculous inefficiencies and impracticalities. While I understand Musashi's ideas here, it would be more expensive, time consuming, and prone to errors than a simple, straightforward low percentage tax. We are not talking 40% here, or even 20%. 5% - 10% would cover costs. And with the ressurection of Wyatt and a competent CFO costs can be kept to a minimum, and surplus invested to secure the future of the corporation as a whole... rather than the 'stop-start' problems we have from time to time when the sole trader who 'runs' production leaves for instance.

[DagnyTaggart]

i think in a perfect and fast calculation world it would be possible to quickly and effectivly tax people per use.....


like using a road but not a highway taxes x amount and the recording of that is done automatically and calculated via acomputer to keep human effort out of it.

security issues and the reality of the cost are prohibtive of this atm. 1 the tracking device can be hacked or altered.... 2 the real cost of buying a car with the extra crap on it and then 3 getting on a road to see the REAL cost of driving and making aroad..... divided per driver will end up more per driver than divided per person.

the effect will be an awakening in the public in america that is always screaming for more roads because they get stuck in rush hour traffic for 30 minutes.....

[Max Delorian]

i think in a perfect and fast calculation world it would be possible to quickly and effectivly tax people per use.....

Exactly, but neither the real world nor Eve is at that stage yet, if ever to get at that stage. Say for instance, the use of corporate blueprints... There is no way to effectively record who has used what how many times, or who is renting/using factories and incurring the bills, or who is using what corporate hangars when/how much/what for. I see, and also advocate, the use of market forces in charging for micro-businesses, such as the POS which is a continuous use based around a limitted number of activities (as complex as they may be with logistics).

However on a more macro scale, such as providing corporate hangars, establishing a corporate owned stock of blueprints and minerals for a corporate owned production system which pays a performance related wage to its employees (so as to avoid the disaster of people leaving the game with their own personal and researched blueprints, effectively so a new person has to start from scratch every time), a small tax may well prove to be the most efficient means of doing this, provided ofc you have someone or a team of competent people overseeing the financial management of the corporation and adequately planning for its investments.

[Raaz Satik]

I read the question and immediately thought 'No" unless of course your Saudi Arabi or UAE.

Has does the State of Nevada benefit from Gambling or Tourism? They tax it. Room Fees, Airport Fees, its all a Tax.

The main problem with 'pay as you go' is its application to giffen goods. Take a real world example for instance, lets say, street lighting. How do you ascertain who gets the benefit of street lighting? Not often each house has a light directly outside, and even if they did, the whole street would benefit from each and every lampost, since each plays its part in illuminating the street.

Great example Max. Wish I could express my points as well as that.

[musashi]

I read the question and immediately thought 'No" unless of course your Saudi Arabi or UAE.

Has does the State of Nevada benefit from Gambling or Tourism? They tax it. Room Fees, Airport Fees, its all a Tax.

The main problem with 'pay as you go' is its application to giffen goods. Take a real world example for instance, lets say, street lighting. How do you ascertain who gets the benefit of street lighting? Not often each house has a light directly outside, and even if they did, the whole street would benefit from each and every lamppost, since each plays its part in illuminating the street.

Great example Max. Wish I could express my points as well as that.

I agree this is a really great example Max. I can’t think of a fair way to fund streetlights, without charging in some way that might be considered a tax. In this instance, identifying the beneficiaries and the degree of benefit received is very complex, and yet I agree that streetlights are a good thing.

Adding to your point about the inefficiencies of the free market. I’ve got an example of the free market run amok – private parking lots. I hate pulling up to the parking entrance at a sports event or concert - $10, 15 even $20 to park your car for 4 hours! For that price they could repave the lot after every event. And the thing that extends the burn, is that most of these facilities are underwritten and built with taxpayer dollars! Double screwed and not even a kiss! This is an example of a monopolist exploiting his franchise, and clearly an example of the inefficiencies of a “pay-as-you-go” privatized public services.

There aren’t any easy answers to this question. Still I think that if we are to be free men we must find ways to cast off the crutches of collectivism at every opportunity. And in my opinion taxes are a collectivist crutch that provides ready answers to some problems, but they create others. Taxes deliver a collective benefit but open a Pandora’s box of additional social ills, one off which is complete reliance upon and progressive expansion of taxes.

Perhaps a tax free world would be free of streetlights…. Perhaps a tax free world wouldn’t need streetlights. Do we remake the Eve world to reflect RL? Or do we dare to create a new world based upon Objectivist values?

[Shazam0]

to add: President Washington tried to implement taxes to form the United states and received critisism for it. A member of his staff (Jefferson) quickly resigned and hired a new england editor to libel washington as senial...(this action broke washingtons heart as he considerd Jefferson a suragate son)

Jackson later destroyed the hard work of Hamilton by crushing the federal bank, along with all local and state banks. Thus nearly bankrupting every state and the nation as well. Proud day for democrats.

[Max Delorian]

Do we remake the Eve world to reflect RL? Or do we dare to create a new world based upon Objectivist values?

I don't think it is a question of making EVE fit the real world per se. However, when being developed Eve was designed to attempt to reflect real world economies, hence the massive difference between this game and the elves and fairies type games that soak up the MMOPG market. Thus I think it is not so much a case of us attempting to replicate RL principles in game, but from the very nature of the design of the engine, RL principles have to be employed to an extent.

And whereas I agree totally with your assessment of creating a world based on objectivist values, and as such I think that is exactly what we are doing. Take the new POS for instance. However, it still comes down to basic pragmatism. While I am hardly a collectivist, I think we would be foolish to develop an impractical system just to adhere to a philosophy. While that sounds harsh, please take it with the following qualifications. Our philosophy remains, that of objectivism. However to bend reality to fit a philosophy in an awkward and more work intensive fashion is short-sighted, since by creating more work for ourselves we are essentially going against many of the principles of the book. Take Ellis Wyatt once starts working in Galt's Gulch, he mentions that he has 'bought himself time' by developing a more efficient way to produce oil...

Also, as I mentioned beforehand, my opinions depend on the big qualification that there is one person or a team to manage corporate finances. That is, minimising costs, and investing any surplus for the long term security of the corporation. We are not talking of a tax that collects in billions per week and leaves it sitting there, or squanders it on new battleships for 'the bosses'. We are talking about a small income tax % which covers the provision of office rentals, providing salaries for those who devote out of game time for the benefit of the corporation (the forum admins, HR, sig designers, PR's) that cannot directly be charged.

And then, of course, investment for corporate owned production capability, where people can come in and out of a production team with just the skills to produce, and take a sales related wage, rather than having every new producer to buy his own stock of blueprints every time (which takes months in research alone before there is any productivity). This investment in particular will take a % of the producer's profits then back to cover the investment and any associated capital expenditure (ie, minerals).

Of course, where the CFO(s) see that there is too much surplus coming in to meet expenditure, there will be tax rebates or tax cuts, or spending on projects to boots TTi's image - advertising or sponsored events to help business or recruitment, which again benefits the corporation and cannot directly be charged. Where there is any tax deficit, the team will endeavour to cut costs and then as a last resort, increase taxes.

Providing the CFO(s) is/are accountable to the CEO (which ofc they will be), who is then accountable to everyone else (which ofc, he is) then I do not see it as collectivism at all, it is merely a fiscal system employed to patch up what is otherwise a nice capitalist internal economic structure.

[musashi]

Providing the CFO(s) is/are accountable to the CEO (which ofc they will be), who is then accountable to everyone else (which ofc, he is) then I do not see it as collectivism at all, it is merely a fiscal system employed to patch up what is otherwise a nice capitalist internal economic structure.

Certainly the CEO has control over the access of the CFO in Eve. But the CEO position really has very limited checks at all, short of removal due to absence by petition to CCP. This is not to say that MarkA, or any past CEO of TTI, has ever done anything that was not in the absolute best interest of our corporation.

I’d like clarify that in fact bringing a portion of each player’s wealth into a single pool in order to achieve group or individual goals is by definition collectivism. I think your point Max is that you do not foresee an abuse of public trust…

And neither do I, but hey Christmas is still seven months away.

Who was it that said, “Those who do not remember the past are condemed to repeat it”?

[Max Delorian]

Oh I remember it very well, I was here when it happened. But that was solely down to appallingly poor checks on who had director and wallet access, allowing an alt of someone who was no longer in the corp to have the power to grant another char of his director access.

Yes I know what you mean with your definition of collectivism. But the main thrust of my post was to say how developing a more labour intensive, expensive, complicated system to try and bend game and RL mechanics to achieve a theory is inefficient, and quite contrary to many themes of the book (since the whole philosophy angle is being played). If the philosophy angle isn't being played, its just plain simple macro economics

[Furax II]

I think short answer to the question is : no
The main goal of a government being to foster a climate allowing individuals to prosper whilst providing the legal context that protects individual freedom.
And you just cannot provide the legal context without some money e.g. to run the administration of the government.

Now regarding how this applies to the world of Eve is another question. Are Eve corporations closer to what a government is in RL or are they closer to what a real-world corporation is ?
To me they look like a mix of both.
1. Let's consider that an Eve corp is closer to a RL corp
That sounds obvious, but the RL corporation pays its employees for the work they provide, and give them money in exchange. The employee salary being (ideally) proportional to his/her performance, which is not the case in Eve.
2. If you consider an Eve corp as being closer to a RL government, then individuals are to be made analogous to what RL corp are, and in this case individual players should pay a (low) tax to the corp/government. The corp will then use this money to provide the help we, as players, need to maintain our individual freedom

Cheers /furax