Voluntary taxation

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Voluntary taxation is a theory that states that taxation should be a voluntary act. Under the theory, people should have the option to pay taxes instead being forced to pay taxes by their government. Under this theory, people would control how much they pay and where they spend it. The theory is a part of Objectivist politics and many libertarian ideologies. Proponents of some studies assert that individuals will give to government, paying voluntary taxes to support specific functions. Donations average 22 percent of an endowment to government, and 27 percent to private nonprofits, and are influenced by their cause, level, and perceptions of effectiveness and efficiency.[1]

State lotteries are an example of a voluntary taxation system.[2]

The American federal income taxation system is sometimes called a "voluntary" taxation system. Marjorie E. Kornhauser writes, "Most people never pay their taxes voluntarily, in the ordinary sense of the word. Rather, they are generally anti-tax, in that they usually would prefer to keep any income they receive than pay it to the government in taxes. Voluntary, in the context of taxation, simply means that people do not have to be compelled to pay their taxes through actual enforcement actions by the state."[3] The "income taxes are voluntary" argument has not prevented U.S. residents who did not file tax returns or pay taxes from being prosecuted and convicted for tax offenses.

Lysander Spooner stated, "It is true that the theory of our Constitution is, that all taxes are paid voluntarily; that our government is a mutual insurance company, voluntarily entered into by the people with each other; that each man makes a free and purely voluntary contract with all others who are parties to the Constitution, to pay so much money for so much protection, the same as he does with any other insurance company; and that he is just as free not to be protected, and not to pay tax, as he is to pay a tax, and be protected. But this theory of our government is wholly different from the practical fact. The fact is that the government, like a highwayman, says to a man: “Your money, or your life.” And many, if not most, taxes are paid under the compulsion of that threat. The government does not, indeed, waylay a man in a lonely place, spring upon him from the roadside, and, holding a pistol to his head, proceed to rifle his pockets. But the robbery is none the less a robbery on that account; and it is far more dastardly and shameful. "[4]


Here is an example of how a voluntary taxation system could function.

A state would distribute tax forms that could be filled out by recipients. The forms would describe options which the recipients could designate preferences as to how the recipient would like his or her money spent. For example, there could be a section for military spending, or separate sections for defense in general and specific conflicts in particular. There would also be sections to be for elected officials (who would still be necessary to carry out the wishes of the people) and also sections for charities.

The form would be divided into more and more sections so that people could specify their decisions. The entire form would be under the category of general. Then there could be a section for education and then even further for elementary school education. People could choose which sections they wanted and contribute to those sections. For example they could contribute different amounts to each section of education or to the section of education in general, allowing their elected officials to decide the best way to allocate the money.

Rulers’ Paradox[edit]

According to L.K. Samuels, taxation must be voluntary since the Lockean “consent of the governed” only applies to rights that people possess which are then loanable to a governing body under the social contract. In his book In Defense of Chaos, Samuels dubs this conundrum the “rulers’ paradox”, arguing: “If ordinary citizens could assassinate, steal, imprison, torture, kidnap, and wiretap without incrimination, that authority could be transferred to government for its democratic arsenal of policymaking weaponry.” 1

Since citizens do not have the right to steal from one another, Samuels maintains that they cannot therefore loan to government rights they do not themselves possess. Under this interpretation, the gathering of tax revenues must be voluntary since a governing body can only obtain the legitimate rights given to them by the people. 2

In the Second Treatise, John Locke asserted that all rights reside solely with the people and that the people must give their consent to be governed by elected representatives. Locke argued in a quote attributed to him that “the people cannot delegate to government the power to do anything which would be unlawful for them to do themselves.” 3

An admirer of John Locke, George Washington understood the concept of consent of the governed, writing: “The Parliament of Great Britain hath no more Right to put their hands into my Pocket without my consent, than I have to put my hands into yours, for money.” 4


The arguments for this theory are as follows:

  • It allows greater freedom.
  • It performs both the function of collecting money for the government and allowing the population to decide where money should be spent. It is similar to allowing everyone to vote on government spending except that it is in a different format.
  • It allows government officials to easily keep track of the wants of their voters and the nation as a whole.
  • It allows people to vote directly in a sense. For example they can decide that everyone should have health care by contributing to that section.


The arguments against this theory are as follows:[citation needed]

  • The government would suffer because it would not receive enough money.
  • There is a chance that few, if anybody would pay taxes resulting in a lawless society.
  • People with money would have a greater say in government than those without money.
  • The forms would be difficult to create to adequately have every option that everyone would like. An option for "other" could become out of control in large nations.
  • This would give the public a greater share in the legislation process, which could lead to what has been called "mob rule".
  • The extent of freedom is relative to amount of money one has and as disproportionate wealth insures greater freedom, oppression is likely to occur to maintain that system for the sole benefit of the wealthy at the expense of the poor.


  • James L. Payne, The end of taxation?, National Affairs [1]
  • Murray N. Rothbard, Man, Economy, & State (with 'Power and Market), Ludwig von Mises Institute, 2004. Textbook with a section that describes most of the theory of Voluntary Taxation [2]
  • L.K. Samuels, In Defense of Chaos: The Chaology of Politics, Economics and Human Action, Apple Valley: CA, Cobden Press, 2013, pp. 308-309.
  • Samuels, Paradoxes, Inconsistencies and Political Anarchists, Strike-the-Root.com, posted on April 17, 2013. [3]
  • George Washington, letter to Bryan Fairfax, July 20, 1774.


  1. ^ Li, Sherry Xin, Eckel, Catherine C., Grossman, Philip J. and Larson, Tara (May 31, 2009), Giving to Government: Voluntary Taxation in the Lab, SSRN 1422143 
  2. ^ DE Miller, PA Pierce (Winter 1997), State and Local Government Review 29 (1), pp. 34–42, JSTOR 4355168 
  3. ^ Legitimacy and the Right of Revolution 50, Buffalo L. Rev., Fall 2002, p. 819 
  4. ^ Spooner, Lysander, No Treason 

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