> "The only time taxes are required is when people will not freely give money for a project. That is literally the only reason taxes exist. Nothing is stopping

> "The only time taxes are required is when people will not freely give money for a project. That is literally the only reason taxes exist. Nothing is stopping people from donating to the government." This really sounds true, but it disregards game theory. For concreteness, let's say the government proposes to upgrade a waste processing plant for $500 million, and you think it's a pretty good idea. There are varying levels of being willing to "freely give money": 1. You are willing to personally pay for the waste processing plant out of your own pocket. You happen to have $500 million, and regardless of what anyone else in the country thinks, you think the waste processing upgrade is badly needed and you're willing to devote your entire personal fortune to it. Maybe the waste processing plant will be named after you. 2. You are willing to pay for it, but only if your fellow citizens also pitch in. The waste processing plant serves 5 million people in the area. You aren't willing to personally pay $500 million, but you are willing to enter a contract with your 5 million fellows that you'll all pay $100 each. 3. You would be willing to join a pact to pay for it, but not if you can easily get away with being a free rider, where the plant gets built without your support. If a generous billionaire will personally donate to the government to pay for the entire thing, then why should you pay anything? Or, if 1 million of your fellow citizens will happily pay $500 each, then why should you pay anything? But that's not to say you don't think the plant is worth the money. You'd even be willing to pay for it if there were no other way to get it built. You'd just prefer not to waste your own money on it if the plant gets built even when you opt out of the payment contract. Unfortunately, the common mentality of option (3) usually prevents options (1) and (2) from being feasible, because anyone who doesn't agree to pay still gets the benefit of the plant upgrades. Option (1) can still work for very prestigious projects that make a good legacy-building donation, but probably not waste processing plant upgrades. The free rider problem prevents almost anyone from voluntarily forming a pact to share the cost burden even when the plant upgrades are direly needed. Fortunately there is a fourth option. 4. You would be willing to pay for it conditional on your fellow citizens fairly sharing the bill. Thus you support entering a mutually-binding pact which will also bind any potential free riders in the municipality who also benefit from the waste processing plant. The pact takes force as long as the motion to upgrade the waste processing plant wins majority support. In order for this kind of pact to be possible, you all (even the free riders) voluntarily agree ahead of time to support the legally-binding force of these kinds of pacts, and the conditions under which the majority will be determined. In other words, you choose to live under a democratic government. Of course there's also a fifth option: 5. You don't think the waste processing plant needs upgrades, and you don't support yourself or anyone else paying for it. I often hear from Americans that taxation equates to theft, or slavery, or being held at gunpoint to pay for other peoples' things. But this naively assumes that anyone who doesn't have opinion (1) must have opinion (5). In fact, I think the vast majority of people have opinion (4), because it's the Nash equilibrium for people who support a public works project, but I never hear opponents of taxation even talk about the existence of opinion (4). Perhaps they haven't imagined that someone would be unwilling to donate $100 to the government, but be enthusiastically willing to have that same $100 forcibly taken from them (as long as it's also taken from their fellows)? I certainly am. That's why I vote to raise taxes even though I wouldn't donate to the government.