“I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle…” ~~Winston Churchill
Today I have been working on my income tax returns. That brings to mind the relationship between a non-POM citizen and the government of a non-POM State.
As you know if you have been reading the POM series of articles, a POM or physical object money is the only kind of money ever used in any society or nation with any kind of government. Money which is or represents physical object(s) can be taken from you against your will. POM can be used to buy any goods or services from anyone. Therefore, everyone wants the POM you have or might have some day. The "everyone" includes your neighborhood government. From the township or county level through the State to the federal level of government there are a wide variety of taxes and fees which the various governmental units levy upon the citizens and anyone else who happens their way. This is motivated by the nature of a POM and is made possible by the nature of a POM and the use of a POM is how the money is collected by appropriate means and otherwise.
But what about that non-POM society which several of these POM articles have been talking about? If such a society has a government, doesn’t it need to collect taxes to operate?
A non-POM is not a physical object and it does not represent a physical object. When earned, this money simply comes into existence in the worker’s account by virtue of the number there increasing in size. That increase in the money supply doesn’t come from any other money account. The people whose decisions result in the money being there do not lose any money as a result of crediting the earner’s account. When the account owner spends money, that money is deducted from the account balance. It is not transferred to another account it is simply deducted from the owner’s account. That’s it. No more, no less. Thus money spent simply ceases to exist, poof! (I’ve always wanted to use that word in an article. 🙂 )
Therefore, even if a non-POM government wanted to take money from a citizen (or someone else) it would have no way of doing so. For one reason, only individuals are account owners. There is no "Uncle Sam" account representing the government. For a second reason, this money can’t be moved from one account to another. This money is not that kind of money.
So how does government pay its bills?
The government has no bills. The non-POM government has no money and no budget. The non-POM government cannot loan or borrow money. If some office of government needs a desk for performing its paper work and someone chooses to give to that office worker (not to the office but to the person using that office or occupying that office) some desk and if that worker uses that desk to do work which deserves to be paid, then the person who provided the desk will also be paid. So long as that desk is useful in producing benefits to others, the person who gave the desk will be paid. The office worker doesn’t pay that person. The government doesn’t pay that person. Those whose job it is to appropriately add money to the accounts of people who deserve that money are the ones who have the power/ability to increase the account balances. And these "Payers" are not a part of the government. They take orders from no one since they are the only ones who can pay. What about the persons who provided the wood and metal and tools to make the desk? Yes, they get paid also and in the same way, as do those who moved the desk from the desk factory to the office. Of course the government worker also is paid in that fashion. Therefore, the government functions just fine without money.
In fact it functions much better without money because all those "desk people" get paid only if that government worker is doing something which actually produces a net benefit. Enforcing silly rules where they really don’t apply produces no benefit. Adding miles of red tape to procedures produces no benefit. Being rude or insolent to the citizens who need the services of that worker reduces the net benefit. In other words the better the job that worker does, the more the worker gets paid and the more all those who contributed to that work getting done get paid. Workers who do well will have suppliers of equipment and other resources asking them to accept their materials. Workers who perform poorly find they have nothing to work with and someone else doing the work in their place.
(As an aside, there would be remarkably few government workers since there would be almost nothing for the government to do but that’s a subject for some other article.)
So what taxes are collected? What about import or export taxes? Nope. No taxes of any kind. What about property tax? No taxes of any kind. What about inheritance tax? No taxes of any kind. What about… Didn’t you hear what I said? No taxes of any kind at any time for any reason by any level of government under any circumstances. What part of no taxes didn’t you understand?
Government in a non-POM economy has no taxes, no need for taxes, and no means by which to collect taxes because no payer is going to pay for anyone to try to collect taxes. Taxes just don’t happen.
I hope that’s clear. NO TAXES.