I noticed some of Xerographica's threads recently and starting thinking about tax choice, and his particular version of it, which he calls pragmatarianism.
For those unfamiliar, just search the forum for "tax choice," there must be a couple dozen threads on the topic going back several years.
The proposal, if I understand it correctly, is:
(1) The government will determine tax liabilities
(2) The government will provide a list of programs which can be funded
(3) Taxpayers may allocate their tax liability amongst these programs however they like
Correct me if I'm wrong X.
I have some objections, beginning with this:
The underlined bit is the problem.
Under P-ism, resources in the public sector are not optimally allocated. The total amount allocated to the public sector as a whole is politically determined (rather than expressing consumer demand), and the enterprises amongst which those resources may be allocated are political determined (rather than expressing consumer demand); and so the taxpayers' allocation choices do not reflect their actual valuations of the programs receiving the funds (the problem is worse if taxpayers and consumers are not perfectly coincident).
It's the equivalent of (actually, is) voting to determine what restaurants will exist, how much each person must spend on restaurants, but allowing people to choose at which of the permitted restaurants he may spend the required funds. This is not (except by accident) going to reflect consumer demand for restaurants, and so this is a sub-optimal resource allocation.
And, if P-ism does not lead to an optimal allocation of resources in the public sector, but just a different sub-optimal allocation from the current situation, why would it be better?
Some other objections:
1. Markets cannot satisfy consumer demand unless consumers get feedback about whether their choices lead to their demands being satisfied. I buy a jar of pasta sauce, it taste like crap - boom, instant feedback. I don't buy that brand again. The market adjusts accordingly. It's the same, to varying degrees, with all market produced goods and services. But for political "goods" and "services" things are quite different. Under P-ism, some leftist allocates money toward more economic regulation, under the illusion this is going to make for greater prosperity in some way. We all know it will have the opposite effect. But will this leftist realize that? Assuming he even personally notices the negative effects, will he attribute that to the regulation? If not, then this "market" is not working. If so, then why wouldn't the leftist realize the negative effects of regulation under the present system and change his voting behavior? So, either way, how is P-ism an improvement?
2. In the same vein, how would lobbying by special interests be any different? If voters can be convinced that subsidies to some solar energy company are necessary to prevent New York City from flooding, or whatever nonsense they believe, why couldn't taxpayer/allocators be similarly deceived? The reason both could/would be deceived is, as I noted above, that they don't understand the cause and effect of the thing. They cannot see that the subsidies don't solve the (alleged) problem they wanted to solve, nor that they cause other problems. The current system isn't a problem because voters intentionally vote for harmful policies - they don't realize they're harmful. How does P-ism solve that problem?
3. Again in the same vein, less popular programs receiving less funding is not equivalent to less destructive programs receive less funding. That would require consumers to know which programs are more/less destructive, which they obviously don't (if they did, they'd vote accordingly and P-ism would be superfluous).
...that's enough for now.
P.S. One more thing, actually. Let's look at a particular example of a current problem, and see how/whether P-ism would solve it - the welfare state (and I mean welfare for the masses, not corporate welfare). It seems at first glance as though this would be impossible under P-ism, which would be great. But that's not really the case. It's not as if, under the current system, only net-welfare recipients vote for welfare programs. Lots of people who would be materially better off vote for them too, God knows why. But this wouldn't change under P-ism. What about the people who are currently forced to pay for welfare but would rather not? Surely they would allocate their tax dollars toward something else, and so welfare spending would drop? If not enough welfare money is coming in, couldn't the government (ostensibly dominated by pro-welfare representatives) just keep increasing taxes? If they don't at the same time change the allocating options, and people keep allocating to different programs in the same proportions, won't more money be available for welfare? If that's correct, it means that the same welfare system could be maintained under P-ism, but actually at a higher total cost - i.e. to get a $100 billion increase in welfare, the government might have to raise taxes by $200 billion, since only a fraction of the new taxes will be allocated by taxpayers toward welfare. Note that it'd be the same for all programs. Whenever the government wants to increase spending for one program, it just jacks up taxes until it gets the amount it needs - but it has in the process increased spending for everything else as well.[/QUOTE]
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