In 1716, Christopher Bullock coined the iconic phrase ’ Tis impossible to be sure of anything but Death and Taxes.” It’s a phrase so simple, yet profoundly relatable – so much so that it’s been echoed by Daniel Defoe, Benjamin Franklin, and your libertarian uncle with the “Don’t Tread On Me” bumper sticker on the back of his truck. But what if this wasn’t the case? Aside from the obvious result of sending everyone who works for TurboTax to the unemployment line, what would happen if everyone just stopped paying taxes? Taxes are about as old as the concept of centralized hierarchies, dating back into Pre-Roman times.In their simplest state, taxes are payments made to the centralized authority figure of an area in exchange for the services that a centralized authority figure provides,Former US Supreme Court Justice Oliver Wendell Holmes once said “Taxes are the price we pay for a civilized society.” And while there’s definitely merit to such an idea, it doesn’t make taxes any less of a pain in the butt. The median income of the American taxpayer is roughly $56,000 per year, and around $11,000 of this goes straight to the government in income tax as well as taxes for Medicare and Social Security. For anyone without a bank account in the Cayman Islands, that’s a lot of money. It’s like throwing away an expensive family vacation and a complete redecoration of your home every year. So, it’s understandable that a working joe might daydream about getting to keep the entire 56K without Big Government skimming a little cream off the top. While, in an abstract sense, we all know that taxes are useful, a few hours filling in your returns are bound to make you at least a little sympathetic to 19th Century French philosopher Frederic Bastiat’s idea that taxation is theft.
As in any major financial decision, there are three factors worth looking at: Benefits,Costs, and Precedents. What would be the real impact of a world where taxes were repealed, or if the people of the planet earth simultaneously decided to object to all taxation? First, let’s discuss the benefits of a world where your most libertarian friends get their deepest desire. The first and most obvious benefit is that you’d get to keep more of your paycheck, due to the sudden disappearance of both federal and state/municipal income tax, which would also, be a huge boon if you happened to win the lottery any time soon,Not only that but your employers wouldn’t dock your earnings for payroll tax under the Federal Insurance Contribution Act, making for an even sweeter payday.And if you wanted to spend that excess money on a new sports car, a designer outfit, and a pearl necklace, you’d also be in luck, because there’d be no luxury tax imposed on these items. if you wanted to celebrate your fat stacks with some All-American booze and cigarettes – these are typically more expensive because they’re subjected to a so-called “sin tax.” But that’s not a problem for you anymore. If you’re a little more on the affluent end of the scale, you could also smoke a tax-free cigar to celebrate the repeal of capital gains tax typically levied against the selling of assets in stock and bond transactions,And if you have a wealthy elderly relative who might be checking out any time now, in the absence of estate tax, your rich, dead grandpa could be a real cash cow.