A public tax collection department as a public service
I've talked about how various goods and services-- road and communication networks, public sanitation, property rights and their maintenance, immunization, and others, are best provided by an entity working on behalf of the community, funded by the community as a whole to avoid problematic incentives*.
Accumulating that funding is itself a public service.
Consider a voluntary-contribution system. While the community as a whole is best served by a level of public goods/services greater than would be achieved on private bases, every individual has incentives to let the rest of the community pay. A purely and genuinely voluntary contribution system would thus underprovide the good/service.
How about having a Benevolent Corporation/Moneybags pay for the good/service, an approach that's been very fashionable over the past forty years or so? You get the incentive problems again, even if the anount of finance is enough.
So it's looking as if you want a tax-collection system. But why not privatize it? Use the widespread historical system of having tax farmers who are paid in keeping a percentage of their take from their neighbors! Well, even if they don't bilk the funds for public goods and services, they have incentives to bilk their neighbors. There's a reason tax farmers had a bad reputation in the bibliucal world, so that John the Baptist specifically told his followers, “Collect no more than what you are ordered to.” (Luke 3:13)
This leads to a subtle but important example area in the realm of public goods and services: public coordination as a public service. I'll be returning to that.
* This is close to a definition of public goods and services.
Facebook posts incorporated:
A public tax department as a public service
Accumulating that funding is itself a public service.
Consider a voluntary-contribution system. While the community as a whole is best served by a level of public goods/services greater than would be achieved on private bases, every individual has incentives to let the rest of the community pay. A purely and genuinely voluntary contribution system would thus underprovide the good/service.
How about having a Benevolent Corporation/Moneybags pay for the good/service, an approach that's been very fashionable over the past forty years or so? You get the incentive problems again, even if the anount of finance is enough.
So it's looking as if you want a tax-collection system. But why not privatize it? Use the widespread historical system of having tax farmers who are paid in keeping a percentage of their take from their neighbors! Well, even if they don't bilk the funds for public goods and services, they have incentives to bilk their neighbors. There's a reason tax farmers had a bad reputation in the bibliucal world, so that John the Baptist specifically told his followers, “Collect no more than what you are ordered to.” (Luke 3:13)
This leads to a subtle but important example area in the realm of public goods and services: public coordination as a public service. I'll be returning to that.
* This is close to a definition of public goods and services.
Facebook posts incorporated:
A public tax department as a public service