<quote>America is a solution to an optimization problem: maximum individual liberty.</quote>

This cannot be true with a straightforward interpretation, as this optimization problem is ill-defined. It is akin to asking to maximize function values f_i(x1, x2, ...) for all i=1,2,.... Here x1 is individual 1's action and f1 is his payoff. The payoff can be "liberty" or whatever other utility one desires - It does not matter. What matters is the keyword "individual". The problem is ill-defined because the optimal value of (x1, x2, ...) for f1 may not be optimal for f2. Search for Prisoner's Dilema for a classical example involving only two individuals.

Of course you didn't mean this silly interpretation. What are other reasonable meanings of this optimization problem? It could be one of the following:

A. Maximize f_i by changing x_i only, assuming all other x_j are fixed. This is still ill-defined, as the best direction to move x_i will depend on the values of all the other x_j. Maximizing one's individual liberty while assuming others stay put leads to actions usually considered as that of "leeches": jumping in front queues, using fraud to receive welfare benefits, evading taxes, etc. In what sense can you assume or demand others not changing their actions to maximize their payoffs?

B. Maximize f_1 by changing x1, while assuming at the same time the other x2, x3, etc are also obtained by maximizing f2, f3, etc. This interpretation is well defined, and can reach a stable state called a Nash equilibrium. But it is not what one normally want. In the Prisoner's Dilema example the Nash equilibrium is the situation where both fess up. In a real society with realistic definition of payoffs, such as liberty, quality of life, or whatever, the optimal solution would lead to everyone grab, steal, loot and rob as much as he can get away with. The outcome will be close to the society of Somalia.

C. Modify the conditions to include in available actions the formation of alliances and enacting of contracts. This will have no effect in a single instance, but it will have a profound effect in repeated experiences of similar situations. There will be solutions for groups that are better off for everyone in the group in the long run, solutions not available if everyone acts individually and only care about instant payoffs. Seach for Repeated Prisoner's Dilema for toy problem that illustrate this point. In the context of real societies, this possibility is why all modern societies converge to having money, markets, policing, governments, corporations, public roads, contracts, patents, copyrights, land ownership, etc. Think about each one of these concepts - none of them will function if one acts to maximize his own interest pretending other will not react to his action. The fundation of modern society is social contracts. If you actually use this interpretation, then you are accepting the social contract theory.

Many libertarians accepts social contracts that help guard their societal rights, such as policing to safeguard property ownership, while rejecting social contracts that help to pay for these safeguards, such as taxes that fund the police. The fundamental flaw here is in thinking that one can act alone and does not affect others nor bring reactions from others.

Selective memory is indeed one of the main factors driving all these debates. Innumeracy may be another.

What follows is a refresher for a memory that many have lost. It is not directly related to the subtle legal points in debate here, but it is very relevant to all these broad spectrum comparisons people make.

In the distant past, in the year of 2003, just before the start of Iraq War, the White House estimated the cost of war to be between 50 and 60 billion dollars. Some left-wing think tank made an estimate as high as 300 billion dollars. That was laughed at as being ridiculous and partisan. Bush got an approval for the war from Congress. It turned out to be costing for more than 1 trillion dollars. Members of Congress were not happy but they thought that there's nothing they could do.

In 2011, just before US involvement in Libya, many members of Congress from both parties blamed Obama for "inaction". After some hesitation he took some action for several weeks, and then reduced the involvement. He did not seek explicit approval from Congress. The total cost is estimated to be over 1 billion dollars if it continues for several more months. Some members of Congress were furious for his blatant disregard of Congressional authority.

Let's try to scale down the numbers in this story so that it is at a more intuitive level. Say you have two kids, aged 8 years apart. When the first kid went to high school, he asked for 50 to 60 dollars to go to a dinar party with classmates as it was of vital importance to high school life. Disregarding the warning that this may actually cost you three hundred dollars, you gave the approval to your kid to use your card. You eventually got a bill for over 1000 dollars. You were unhappy but thought that you can't really blame him as he sought your approval. Eight years later, your second kid went to high school. At your urge that he's not having enough fluid during the day, he took some change and bought some juice in school. You were furious that he spent over 1 dollar without your approval, as you have an explicit house rule that money for food needs to be approved. You think he should be punished.

Is this rational and responsible behavior? Do the members of congress behave as how adults should behave?

Here's an argument to show that gas tax beats the alternative forms of transportation tax by a big margin.

Following are three potential revenue sources for road transportation:
1. Vehicle registration.
2. Mileage tracking / toll
3. Fuel tax.

Which one is the best? What is a fair standard to compare them? I think we should examine why the tax is needed in the first place, and which aspects of driving are relevant to this need. Let's see:

1. Road construction and maintenance. It mainly depends on mileage driven and vehicle weight.
2. Pollution cost. It mainly depends on mileage driven and inefficiency of the vehicle.
3. Strategic cost of oil source (such as soldiers in foreign countries). It mainly depends on the amount of fuel consumed.
4. Paper work for ownership. It is essentially per vehicle.
5. Parking space. It is roughly proportional to number of trips and size of vehicle.

Item 4 is the only one that should be addressed by vehicle tax. All other items are nicely represented by gas tax. For these items, either per vehicle or per mile taxes would be grossly biased.

Are there more important reasons to tax road transportation? Are there fairer taxation methods?