Stereotypically, taxes are the only things libertarians hate more than muh roads, communism, and prohibition. Hating on taxes is right up there with loving on guns, bacon, bitcoin, and homesteading. Hell, the most recognizable and successful marketing gimmick that we’ve used in years is the phrase “taxation is theft,” overused to the point where “taxes are the price we pay for a civilized society” has come into fashion as a standard response.
When it comes to taxes, I think there’s roughly three camps of libertarian thought on the subject. There’s the literal anarchists who identify anarchy as a branch of libertarianism. There’s those naive enough to believe that a modern state could exist long upon strictly voluntary contributions. And then there’s the minarchist realists who recognize both the immorality of taxation, and also that it’s a necessary, unavoidable evil. Obviously I fall into that last camp. Recognizing that it is a form of theft informs, in a moral way, my belief that such a practice should be limited. There’s also things less moral than theft, and the world simply isn’t simplistic enough to allow all or nothing systems like communism and anarchy to sustain themselves for long outside of a vacuum or the theoretical.
That said, not all forms of taxation are equal, either. As a general rule, you tend to get less of what you tax, and more of what you subsidize, due to incentives that are provided by each practice. For instance, a tax on cigarettes, booze, or large sodas are attempts to discourage use. Likewise, a tax on income is a tax on productivity. A tax on capital gains is a tax on a specific form of speculation. A tax on business is a tax on consumers. A tariff can act as a tax on foreign trade, which in turn is often a tax on consumers as well, as well as providing a preference towards some companies rather than others. Inflation is one of the most regressive taxes, and acts as a tax on savings at a time saving should be encouraged. Sales taxes are a tax on consumption.
When possible, I often prefer taxes that operate in a way similar to fees. For instance, the gas tax and things like vehicle registration fees are often used specifically to fund road construction, and aim to make those using the roads the ones who pay for the service that they are utilizing. Property taxes are often set aside for specific state spending on education, under the rationale that those most likely to actually have children are the ones paying for their local schools. FICA taxes indirectly affect the benefit structure for programs like social security, and are often used as the rationale for why such programs are investments by (admittedly unwilling) participants rather than traditional welfare-style programs, and the same goes for states which set aside money from your check to determine unemployment benefits in the case of job loss.
In general, when it comes to federal spending, I absolutely do not support new forms of taxation or anything aimed at increasing revenue. My economic focus is aimed nearly exclusively at reducing spending rather than increasing revenue as the preferable means of addressing deficits. However, there is one form of taxation I would actually support, one which is opposed by nearly all Americans of all political stripes even past those that are as rabidly anti-tax as libertarians… and that’s a specific type of increase to the gas tax.
I believe that a set percentage of military spending should be covered by a gasoline tax.
Such a tax would encourage investment into r&d of alternate energy sources that could eventually largely replace fossil fuels. One of the reasons I oppose subsidies to alternate energy sources, however, is that neither scientists, the government, or any of us really know at this point which type of alternative sources are likely to replace oil. As such, direct funding aimed in specific directions are likely to be malinvestments that distort and hide the true cost of emerging technologies. Once these investments are initially made by governments, nearly immediately lobbies are formed to keep such investments flowing, regardless of what the actual data says about anything from environmental impacts to sustainability to profitability that the market would consider.
For instance, ethanol subsidies began roughly thirty years ago now. In that time, we’ve learned that ethanol is worse for the environment than gasoline, given that it still takes over one gallon of gasoline to produce every gallon of ethanol. There’s no evidence that gains in productivity are likely to ever change that. On top of that, ethanol fuel is worse for engines, worse for the economy, and has distorted the corn market. However, to illustrate how powerful the ethanol lobby has become despite all the evidence against it’s functionality… Brazil recently sued the US by claiming such subsidies are an attack on free trade, and won. Instead of ending the subsidies to American farmers to produce, we simply started providing those subsidies to Brazilian farmers as well.
There are plenty of reasons to support a transition away from fossil fuels… they’re a finite resource, they prop up regimes and economic structures that couldn’t otherwise exist in places with large oil reserves, and then there’s the obvious environmental considerations most people would have cited first. The national security concerns that relate to the petrodollar and a world economy heavily dependent on oil are vast and obvious. As Kasparov famously said… “You can often do just fine on the wrong side of history if you are on the right side of a pipeline” Even those who dismiss environmental concerns about oil, should recognize the implications to our foreign policy, everywhere from Putin’s Russia to Venezuela, Iran, Saudi Arabia, and much of the middle east aside.
From an economic perspective, I think addressing this transition through artificially increasing the price of oil is preferable to subsidizing alternate energy specifically, because with the latter, one is picking winners and losers without knowing which ones future technologies will favor while with the former we’re only picking one overall loser that we know is not infinite or sustainable, and benefits our enemies.
Given how much of our military actions are based on securing countries with oil, or fighting regimes only in power because of oil… oil is directly linked to nearly everything our military does in one way or another. A gas tax is the nearest way to fund our military where such a tax acts anything like a user fee. Seeing changes in the pump anytime military spending is pumped up, could give the average American consumer at least a taste of the direct link between military adventurism and it’s true cost, in a way that printing money simply does not. As a non-interventionist, I think we shouldn’t go abroad in search of monsters to destroy, and I think a gas tax could help inform the average voter of the true cost of intervening overseas unnecessarily. The numbers simply aren’t there to fund the entirety of our modern military through gas taxes, but at linking such taxes as a mere percentage could be enough to change both our energy system and the reflexive action of our military-heavy foreign policy. At very least, this funding method seems vastly preferable to paying for our military more or less exclusively by discouraging productivity through an income tax or discouraging savings through inflation.
The end result might just be arriving quicker at a more environmentally sound world with an energy sector that’s more sustainable that doesn’t benefit repressive regimes by making them partially immune to basic economic laws.