Thursday, February 27, 2014

Thinking outside the box: what if we decentralize taxation?

What if individual sectors of our state/city governments provide services on a subscriber basis, and collect revenues in house?   What services would individuals classify as a necessity and which ones would we classify as a luxury?  We'd quickly find out since we would have more choices and control on how our tax dollars are spent, and how much we want to spend.

Here are some ideas...
  • The state transportation authority would collect a simple one time taxes on sales of vehicles, (not annual registration fees) and maintain the highways.
  • The city transportation authority would collect taxes on tire and gasoline sales and maintain the roads.
  • Police and fire services would maintain memberships like a private security company, and send bills to households exactly like municipal water services do.  Perhaps "member areas" would work best, paid by neighborhood HOA type fees.
  • Emergency services - 911 can bill per call, as I believe ambulances already do. 
  • Air traffic control could be paid for by adding a fee to plane tickets and/or a tax to aviation fuel and products. 
  • Port authorities would charge inspection and security fees directly to importers/exporters and handle security and inspections at the ports.
Furthermore, we could roll this idea up to the state level as well, letting states decide what federal services the state wished to subscribe to.  Does Arizona, New Mexico or Texas want the services of the ATF?  Does Montana want to pay for NOAA's hurricane data?

I think this idea has merits, (if not legs), and could go a long way towards reducing the impact of government on the lives of individuals.  There are still challenges to overcome - do we provide free schooling?  How big should the military be, and how do we pay for it?  etc.  Those questions may not be answered here, but I am sure this can be a part of the overall solution.

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