Taxation would be replaced with voluntary financing methods under capitalism

How is government supported under capitalism?

A government is supported under capitalism through voluntary financing methods.
 

How will one support government without taxation?

The removal of all taxation would be the last step to implement in the transition to a free capitalist society. The costs of a proper government -- with an army (engaged only in self-defense and not imperialism), a court system, and a police force -- are very small, and easily paid for by voluntary financing methods. Such methods are used by nonprofit agencies, like churches, to raise billions of dollars. Observe how one "know nothing capitalist" Ted Turner recently gave a billion dollars to a useless, anti-capitalist organization like the United Nations.

Why would voluntary methods fail to work under our present system?

Only if one wants to turn government into an engine of the welfare state/new world-order ('one country, with one big leash tied around its neck', with the untouchable bureaucrats of the 'United Nations' holding the leash), do voluntary methods fail to work.

Most people (not all) would voluntarily give 5 or 10% of their income to support a government that protects rights; practically no one would give 50% to 90% of their income to support a mixed economy/welfare state, which is why the government uses lethal force to physcially take it away from you.

Who would want to voluntarily pay for that? Perhaps a few people would, but they are the ones who think that they will get to hold onto the leash.



Suggested Reading:

For more information on this rather complex issue, see Ayn Rand's essay "Government Financing in a Free Society" published in The Virtue of Selfishness [VOS].