In light of discussions earlier last week or so. To start off, let's consider the economic impacts of taxation. To answered the proposed question above, taxation hinders the production of wealth and is destructive in nature. Taxes, do not in [b]ANY[/b] circumstance, reflect [i]consumer demand[/i]. Funds taken through taxation do not show demand for any given good or service, merely the mass violent expropriation of wealth, and [i]nothing more[/i]. This mass expropriation leads to smaller purchasing means by consumers, in turn altering spontaneous market behavior and artificially changing prices on the market. Now, you may be asking what is inherently bad about this.... I'm referring to a fundamental market process of economic calculation, an extremely vital and precious function found on the free market. To be general, on the free market, since exchange is voluntary, we are actually able to calculate profit and loss. Profit and loss measures the productivity of resource allocation and consumer satisfaction. If profit is being made, that is a reflection of meeting the consumer demand, if loss is occurring, the direct opposite, as the consumer simply is not valuing the service over what is being asked for them to give up for it. Profits are the addition of wealth, loss is the destruction of wealth. In the free market, there are natural mechanisms that pushes those destroying wealth out of market, losing command of much demanded resources and freeing them up for other users who are actually creating wealth and allocating resources more efficiently. The state, NEVER experiences these natural mechanisms. It can not make sound economic decisions, what to produce, with what materials, allocation, or how it should be produced. It has no rational means to answer these questions. AND EVEN if the state apparatus could somehow answer these question, they would be obsolete the very next moment due to the consumers ever changing preferences. So, to give an example of this, I quote myself on public education: [i]The system lacks a pricing mechanism that otherwise (in the free market) would indicate what resources need to be applied in what specific areas to fit the most important needs of the consumer. Prices are what allows the supply to make coherent economic decisions, but only to the extent they are organically allowed to be. The state is funded through coercion it lacks this quantitative indicator of where to employ scarce resources and renders any demand for said resources hopeless. In the free market where all exchanges are made through voluntary interpersonal interaction the price system provides an objective reflection on the value of resources. Prices are generated through the market and would allow for entrepreneurs to make sound and precise decisions on what resources to buy. Basically prices are able to to reflect the opportunity cost of perhaps the cost of teachers or computers over other choices. Even more pricing allows entrepreneurs to calculate profit and loss that reflect of the efficiency of the business model and how well it is meeting the consumer demand. The natural incentive is to make the most profit...but in order to maximize profit entrepreneurs must be meeting the ever increasing needs of consumer demand for teaching quality, curriculum, effectiveness, efficiency, cost, etc...This is a crucial system that allows the supply to harmonize with the affinities of the consumers. This system is ABSENT IN THE STATE CONTROLLED PUBLIC SCHOOL SYSTEM. This leads to consequences of mass misallocation of scarce resources and blindness to whether current teaching strategies are meeting the needs of the students/consumers.[/i] And to drive this point home I quote Chase Rachels explaining the pricing mechanism: [quote]To further illustrate, consider the case of a furniture producer seeking a location to construct his factory. On the surface, it may seem most sensible for him to place his factory next to the retailers willing to sell his products so as to cut down on transportation costs. However, it may be the case that the land in this area is of even greater value to a computer chip manufacturer who is willing to bid more for it than our furniture producer. Thus, it may make more sense for the furniture producer to locate his factory at a more distant location if he projects that the increased costs in transportation will be less than the additional costs he would otherwise have to pay to secure the location nearest the furniture retailers. The same may be said regarding which materials to use. It may not be profitable to use the "best" or "highest quality" materials as such materials may be valued more for use in other productive processes than in the furniture entrepreneur's plans. Thus, the pricing mechanism takes into account all of the opportunity costs regarding what to produce, how to produce, where to produce, and what materials with which to produce when conveying to the producer what course of action will be most profitable. [b]Without such a mechanism, this entrepreneurial decision making process would be highly arbitrary and comparatively less efficient.[/b] [b][u]It is only through the private ownership of economic goods that the market is able to produce prices which accurately reflect the relative demand for and supply of the world’s scarce resources.[/u][/b] To understand this further, simply consider how prices are generated. The seller generally wants to price his goods such that the number of people willing to purchase them equals the numbers of units he is offering. In other words, he wants to price his goods at the highest level possible without having a leftover surplus of his wares or services. Conversely, the consumer wants to spend the least amount of money on a given good that a seller is willing to offer. The buyer and seller have an incentive to negotiate with each other in the presence of competition. If the seller offers a good for “too high” of a price, the buyer may decide to go to his competitor offering the same or similar good at a lower price. If the buyer insists on making offers which are “too low,” he may lose out on the opportunity to acquire the given good or service to the next potential customer who is willing to pay a higher price. Thus, opposing desires, in the context of a competitive economy, drive a tendency towards a meeting in the middle (this is also known as the market clearing price). There is always a tendency for such a harmony to be achieved in the free market where economic goods are privately owned.[/quote] As I said, taxation is collected by forceful means, not under the terms of nonviolent voluntary exchange. Mass expropriation of wealth does absolutely nothing but affects and distorts prices. Distortion of prices and smaller balances in my pocket will tend to change my purchasing behavior. When the state spends these funds, they do so in a manner that again, inst driven by any consumer demand as they have no means to produce any efficient economic calculation of profit and loss. The demand for goods and services will be undermined, again leading to price distortions, resulting in less efficient economic activity...prices act as information guides for all participants on the market (consumers, entrepreneurs, etc) and when artificially distorted lead to mass misallocations of resources than otherwise a smooth process under free competition, in the absence of taxation, these participants are dealt with misleading market signals. Overall leads to over and under production in different areas of the economy. This fundamental economic reflection of calculation (lack of) applies to all state provided goods and services. Now if you have been following my logic, you should be able to connect this fundamental error to ALL state services and goods provided, as I already explained it in relationship to state education. This is the underlying immutable issue of socialist doctrines that call for the collective ownership of the means of production. Those employing the means of production, are not incentivized to experiment in pursuit of profit. Patronage to services is guaranteed, since the means of production are collectively owned, no counterparts are competing. In the absence of free competition, unwanted or outdated processes that are destructive to resources prevail as again, there are no competitors to naturally enforce market pressures. So not only is patronage guaranteed to collectively owned services, but these services do not face the same consequences of wealth destruction in the free market: loss of business and money. Again, with market prices and economic calculation, all market participants, have quantifiable and objectively comparable indicators of all supply and demand. I hope I got you thinking...