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Taxless Societies Are a Stupid Utopian Idea

by Pragati Shrivastava
, Taxless Societies Are a Stupid Utopian Idea

Ah Utopia! Some people believe that utopian societies are based in anarchy while the majority of people need structure and rules of law. As such, the idea of a taxless society has been debated about for decades. As annoying as it might be, the idea of a taxless society is a contradiction in itself because society functions with the cooperation of all citizens for the benefit of all. A state’s existence is not based on how the government taxes its citizens but rather based on how we keep order withing our social setting while protecting our way of life and our property. Need I say that taxless societies are unrealistic and a utopian idea that will fail?


When we live in a society we wish to go about and carry out our business without the fear of being attacked by someone. We expect the streets to be safe and citizens to be law abiding. For the most part this order is maintained by paying the salaries of police officers. This comes from the taxes that we pay. In a taxless society, where would these salaries come from?

Sure, every society has anti-social elements in them, and they are limited by virtue of stringent conditions. When one evaluates the possibility of a taxless society, one has to take these points into consideration. This leads us to the idea that a taxless society is a ridiculous utopian idea.

Let me expand on this with some real life examples.

There are a few countries that offer the financial benefit of having no income tax, like Bermuda, Monaco, the Bahamas, Andorra, and the United Arab Emirates (UAE). There are a number of countries without the burden of income taxes, and many of them are very pleasant countries to live in. However, taking advantage of living in a no-income-tax country is not as easy as packing a suitcase and buying a plane ticket. There is more to it than having to pay no taxes.

This may be a possibility in a sustainable, automated world, but that would not be what we typically mean by “government”. If by government you mean a traditional governing body, with hierarchy and branches with offices filled by people whose job is to manage the functional parameters of society, taxes will always be imposed in one form or another. If there is no tax imposed on citizen’s income, it will be imposed on other things. It’s literally the price we pay for goods and services.

Because of rapid technological advancement and automation, in a few decades the government may become fully automated. In such an economy, there may be no taxation – maybe.

I’d like to talk about something that’s more relevant to present times – A state’s unique selling point. What only a state can do and no one else can. The value proposition of a state consists of three unique activities:

  • Defending the territory from aggression from other state actors which want to control the territory
  • Acting as an arbiter in civil disputes, enforcing arbitration with force where necessary;
  • Defend aggression in the territory

In a taxless society, there is no entity that would look after these activities and the utopia of a taxless state is just an idle day dream with no backing at all.

Raw materials are not imagined into existence, they are mined or created. The transportation of the materials to create things like computers, cars, even the road signs, our groceries, etc. These all take resources and an organized and safe way to transport goods. Without taxes, who will take care of the roads – you? Without taxes, how will places like our fire and police stations be funded to keep us safe?

Imagine in all you want, but the reality is untenable.






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