3.7 The VoTa solution

VoTa does not weaken either side

VoTa provides extreme protection for property rights and voluntary exchange. Production is private, untaxed, and unregulated except where it violates property rights. The State cannot direct production or interfere with the market through tariffs, subsidies, licences, or privileges. Laws cannot extend beyond the protection of property rights under the Non-Aggression Principle.

VoTa is also extremely democratic. Citizens define public services through direct democracy and direct their own share of public-service funding through tax choice. There are no politicians exercising power on their behalf. The 50 per cent tax on tax-inclusive consumption directs 30 per cent of each taxable payment to public services and 20 per cent to UBI. Democracy therefore controls immense collective resources rather than being confined to a minimal State.

Preventing majority and minority capture

As discussed in Cronyism: the common enemy, cronyism depends upon organised interests capturing discretionary State power and converting it into selective privilege. VoTa removes that machinery rather than trusting different political or economic groups to control it responsibly.

VoTa resolves the conflict by combining three extremes rather than compromising between competing principles:

• An extreme free market: individuals control property, production, and voluntary exchange. The State cannot direct production or interfere with peaceful exchange.
• Extreme democracy of the State: citizens directly control everything the State may do and allocate its public-service funding themselves. There is no separate political ruling class.
• Extreme non-discrimination by the State: State power cannot be used to impose selective burdens or grant selective benefits according to wealth, income, identity, organisation, or any other personal characteristic.

The third extreme makes the first two compatible. Democracy gives citizens complete control of the State, while the Non-Discrimination Principle prevents the State from becoming an instrument through which one group rules another. A poorer majority cannot impose selective taxes or confiscation upon a wealthier minority. The Non-Aggression Principle prevents it from violating their property rights directly.

Nor can a majority increase the general tax burden. As explained in Tax rates, the statewide public-service and UBI tax rates are fixed by the Constitution and are not subject to ordinary democratic variation. Democracy determines how the fixed public-service pool is allocated, but it cannot enlarge that pool. Changing either tax rate requires a constitutional amendment rather than an ordinary democratic initiative.

The same constraints operate in the other direction. Wealthy people, corporations, and organised interests cannot obtain subsidies, protective regulation, exclusive access, favourable taxation, or other privileges. There is no political government for them to capture and no discretionary authority through which special treatment can be granted.

Extreme democracy therefore governs the State, not the private lives or productive activity of its citizens. Within its constitutional domain the State is controlled directly by everyone; outside that domain, neither a majority nor a minority can use it to rule others.

Democracy within constitutional limits

VoTa does not reconcile free markets and democracy by compromising between them. It gives individuals control of property, production, and voluntary exchange while giving citizens direct control of public services and collective funding. Democracy determines what the State does within its constitutional domain, but cannot be used by a majority or minority to exercise power over everyone else.

Addressing the dehumanising potential of the division of labour

As discussed in Division of labour, specialised production can increase material abundance while making work repetitive, narrowly constrained, and intellectually degrading. VoTa addresses this problem through UBI rather than State regulation of production.

This is not a marginal welfare payment comparable to existing systems. The Constitution directs 20 per cent of every tax-inclusive taxable payment to UBI. As explained in UBI, this is approximately 25 per cent of basic-price GDP under simple accounting assumptions. Basic-price GDP provides the meaningful comparison with countries that raise most government revenue through income taxes rather than taxes on consumption.

Because every person receives an income independently of employment, workers are not compelled by destitution to accept dehumanising work. They can refuse a job, reduce their working hours, retrain, become self-employed, or wait for better conditions. Employers remain free to organise production, but must offer sufficient pay, conditions, autonomy, or other benefits to attract workers voluntarily.

The tax applies automatically to taxable consumption, regardless of the consumer's income or wealth. Wealthy people cannot avoid it through income structuring, deductions, or favourable treatment: whenever they use their wealth for taxable consumption, they pay the same rate as everyone else. Saving and investment can delay when the tax is paid, but this is a second-order timing effect rather than avoidance: the tax applies when the accumulated value is eventually consumed. VoTa can therefore fund a substantial UBI without selectively taxing or confiscating accumulated wealth.

UBI does not guarantee that every necessary job will be pleasant or meaningful. It changes the bargaining relationship by giving workers a viable alternative to accepting whatever employment is available. Repetitive or unpleasant work must therefore be automated, reorganised, or made sufficiently rewarding for people to choose it.