Breaking the Taxation Myth: How Voluntary Governance Can Replace Coercion

Taxation has long been viewed as an unavoidable reality. It funds everything from infrastructure and national defense to social programs and government bureaucracies. Many people assume it is the price we pay for civilization. But what if that assumption is flawed? What if taxation is less about civilization and more about the unchecked expansion of state power?

Throughout history, taxation has been the mechanism that allows governments to engage in their most destructive activities—especially war. Without the ability to seize wealth from their citizens, rulers would find it nearly impossible to fund conflicts that serve their political ambitions rather than genuine defense needs.

General Smedley Butler, a highly decorated Marine who served in the early 20th century, famously stated that “war is a racket.” He explained that wars are rarely fought for the people but instead benefit a select few—bankers, arms manufacturers, and politicians—at the expense of the many. His words ring true today as war remains one of the largest expenditures of governments worldwide.

In his farewell address, President Dwight Eisenhower warned of the growing power of the military-industrial complex. He foresaw a future in which defense contractors and war-hungry politicians would collude to keep the state perpetually engaged in conflict, siphoning more and more tax dollars to enrich their own interests.

However, war is only one example of how taxation enables government overreach. It also serves as the lifeblood of corporate welfare, cronyism, and reckless spending.

Elon Musk Exposes Government Waste, Fraud, and Abuse

In recent weeks, Elon Musk has drawn attention to the staggering levels of waste, fraud, and abuse within the U.S. government. From massive cost overruns in military projects to agencies riddled with inefficiency, Musk has exposed the extent to which taxpayer dollars are squandered.

For example, the Pentagon has spent billions of dollars on failed defense projects while critical infrastructure crumbles. Federal agencies have been caught in outrageous spending scandals, such as lavish conferences and fraudulent welfare distributions. Government contractors routinely overcharge taxpayers for basic services, while bureaucracy slows innovation and efficiency to a crawl.

Musk’s revelations aren’t just anecdotes—they are systemic issues. Government operates without market discipline. When businesses waste money, they go bankrupt. When governments waste money, they raise taxes or print more money, fueling inflation and placing the burden on productive citizens.

Taxation doesn’t just fund essential services. It also props up failing institutions, rewards incompetence, and allows politicians to buy votes with grand promises that can never be fulfilled.

Who Really Pays?

A common argument for taxation is that it funds necessary public services like roads, schools, and police. However, this justification falls apart when we look at how government money is actually spent.

Consider student loan “forgiveness.” It has been framed as relief for struggling young people, but in reality, it forces taxpayers—including many who never attended college—to subsidize the debts of well-educated professionals. Similarly, bank bailouts justified as “saving the economy” often do nothing but enrich the politically connected while leaving working-class taxpayers footing the bill.

Government subsidies distort the economy, making it harder for real businesses to compete. Entire industries rely on taxpayer money to survive, despite offering products and services that consumers wouldn’t voluntarily pay for. This isn’t capitalism—it’s coercion disguised as economic policy.

Even those who pay little or no income tax still suffer from government confiscation. The hidden tax of inflation, caused by reckless money printing, reduces the value of wages and savings. Borrowing, another form of deferred taxation, shifts the burden onto future generations who will be forced to pay for today’s political excesses.

Taxation is often framed as a moral duty, but what could be moral about taking money from people under the threat of force? If taxation were truly voluntary, people would pay only for the services they valued. Instead, they are compelled to fund programs they disagree with, from foreign wars to wasteful government initiatives.

What If There Were No Taxes?

The assumption that taxation is necessary stems from a lack of imagination. What if people could choose what public goods to support? What if competition forced service providers to be more efficient, rather than guaranteeing them endless funding through coercion?

Today, private businesses already provide many services traditionally funded by taxes. Private security companies protect communities. Crowdfunding replaces government aid in times of crisis. Entrepreneurs are creating solutions for everything from roads to dispute resolution.

Historically, societies have found ways to fund essential services without taxation. In the 19th century, many roads were privately built and maintained through tolls. In modern times, digital currencies and decentralized platforms offer new ways to finance infrastructure and community projects without state interference.

Some argue that taxation is needed to prevent free riders—people who benefit from public services without paying. However, technology is making it easier than ever to ensure that people pay for what they use. Subscription-based security, voluntary toll systems, and decentralized arbitration courts are just a few examples of how essential services can be provided without state coercion.

Even now, there are countries that operate with minimal taxation. Places like Liechtenstein and Monaco function with extremely low tax burdens, relying on voluntary economic activity rather than forced contributions. While not entirely tax-free, these examples prove that large-scale taxation is not necessary for prosperity.

The Entrecomm Model: A Step Toward a Voluntary System

Morazán and other free city initiatives are experimenting with alternative funding models that prioritize voluntary contributions over forced taxation. These entrepreneurial communities (entrecomms) operate on the principle that governance should be a service, not a monopoly.

Instead of taxing residents, entrecomms generate revenue through lease agreements, user fees, and profit-sharing arrangements. This ensures that residents only pay for services they value, while city operators are incentivized to provide high-quality governance. If people are dissatisfied, they can leave—forcing city owners to remain responsive and efficient.

This model reduces waste, prevents political corruption, and encourages competition between jurisdictions. It also allows individuals to align themselves with governance structures that match their values, rather than being subject to arbitrary laws imposed by distant bureaucrats.

Entrecomms are not just theoretical concepts—they are proving that taxation is not the only way to fund society. By aligning incentives properly, they show that governance can be both effective and voluntary.

A Future Without Taxation?

The idea of a world without taxation may seem radical, but so was the idea of self-government before the Enlightenment. Just as monarchies once seemed like the only viable form of rule, taxation today appears inescapable. But as technology advances and alternative governance models gain traction, taxation may one day be seen as an outdated relic of coercive rule.

If governments had to compete for funding, they would be forced to provide value. Wasteful spending, corporate handouts, and endless wars would become unsustainable. Instead of being compelled to fund institutions that don’t serve them, individuals would choose which services to support.

A tax-free future won’t happen overnight. But through entrecomms, decentralized governance, and the exposure of government waste by figures like Elon Musk, we are beginning to see cracks in the taxation paradigm. As more people question whether taxation is truly necessary, the door opens for voluntary, consent-based governance.

For now, taxation remains a reality. But as history has shown, the status quo is never permanent. When the right incentives align, society may find a way to fund its needs without coercion—ushering in an era where governance is based on choice, not force.