3. Make a thing so that you don't have to pay taxes, but then if you don't pay taxes to the police they ignore your house or don't investigate your murder or such?
Heh, yeah, poverty. Try and live in the slums some day. Or a third world country. It has been done in one form or another before, but it sucks because:
1. The gov't gets less taxes. Things that are paid with taxes include law enforcement, military, parks, schools, hospitals. You're going to deny non-taxpayers from all these places? (specifically parks and military safety)
2. The people are unsafe, and hell, who wouldn't want to pay a few dollars to stay alive?
3. Being in the "not tax paying list" is like a glowing beacon that says "kill/rob me!"
4. It encourages crime and non-education. And encourages the police to slack off or even beat up/interrogate the people who don't pay taxes. You know, like how they treat illegal immigrants?
5. The bureaucracy and fees in finding out who's not paying taxes and who doesn't get rights isn't worth it. If you're too poor to pay for basic rights, they won't squeeze much tax from you anyway.
6. There's more than just income/land tax. What about sales tax? Does it mean that if you don't pay your 5% sales tax, you're not allowed to sue if the food you bought is poisoned? What about if you bought the type of food that's exempted from tax? Can you sue then?
7. Subsidies. If the company you work for gets subsidies, do you? What about your fuel, food, etc?
It's being done in some form, where squatters don't pay tax on land they build their shacks on. They did it once here, the roads near the shacks were shabby and creepy and ugly. They actually got quite well off, bought imported cars, satellite TV. Aside from a roof that could collapse at any time, they lived like lower middle class people. Then the city just went all "GERROF MY LAND", bulldozed the shacks, paved a new, clean road, and moved the people to some flats that smelled like piss (right next to my college then
). Following your idea, they wouldn't even get the luxury to have free housing later on, then, they'd end up bumming around town, begging, stealing things, and scaring off valuable tourists.