How is this different from today? If you take away 'taxpayers' and put in 'donations'. It putting the power of control over the many in the hands of the few (elite) that have the money.
Formalism and informalism as I explained.
If I were very rich and so inclined, I'd pay my high taxes, then use my political power to undermine all my opponents and get policy and law to favour my businesses, forcing out all other competition so I have the monopoly on my particular business, then I would proceed to make sure that government and the society I lived in relied 110% on my particular business and that no other competition could ever gain ground. Then my wealth and power grows, it won't matter on the taxes I paid anymore, as government and society would not be able to run without my business and I could control vast influence by changing my prices up/down to those I favoured, thus controlling other business elements and politicians.
Every favour you seek for your own business is counted as a payment to your business, reducing the net tax paid by that much and reducing your own political power by that much in the next election. This needs a slightly different way of thinking compared to present day institutions. It is possible to imagine an independent body which studies every tax allocation not given out to every person in general (like a negative income tax) and reduces the weight of the taxes paid by the recipient for the next election cycle.
Informal lobbying efforts have a huge return in the present scenario. In the taxpayer's oligarchy, it will be greatly reduced because the payments are out in the open.
My thoughts on this are most definitely not original .. look at big pharma (vs natural medicine) the 'drug war' , the oil and energy industries (vs free energy) .. Competition is made illegal, competitors killed or locked up.
I'd still be paying my high taxes, and as my wealth and power grew I'd continue to pay even higher taxes to assure my dominance. The difference being from this scenario to our world is that in the 'tax scenario' I would be completely legit.
It's a very scary thought..
In a slightly larger context, I am in favour of competing jurisdictions. This is a suggestion for one such jurisdiction. If a community degenerates this way into a banana republic (banana being whatever commodity/industry dominates), then it becomes highly possible that it will face a talent drain.
