Desocialization of Taxes: A Taxation System Proposal for Venezuela

Abstract

Venezuela requires a change in the economic, fiscal, and political system. Supported on the findings of Acevedo et al (2020), we argue that the most important challenge is to reduce and starve the government and empower the citizens. This will be only possible through a new taxation system to eradicate the fiscal independency of the State. Following Rothbard (2018, 1992, and 1981) we have developed a proposal that would limit the State and any possibilities to intervene the natural flow of the free market. The paper presents a review of the history and evolution of the exponential increment of the tax burden that Venezuelans taxpayers have experienced through the years, and proposes a fiscal reform based on three main pillars: i) municipalization of the taxation structure; ii) simplification by elimination; and iii) imitate the market as suggested by Rothbard (1992). The main conclusion of this research is that this proposal restricts State’s fiscal independence and eradicates the possibility that governments continue applying populist policies and boosting central planning.

Keywords: De-socialization, privatization, taxes, Venezuela

JEL Classification: L33, B53