Inequality would not exist in an anarchist system (without a Government) because people would be compelled to provide their own property protection, and this would reduce the incentive to hoard property. However, since we do at the present time have subsidised property that means we observe a rise in inequality. Because of this, and if the Government is entitled to impose taxation, then we might seek ways in which to reduce this problem which will then lead to less demand for State benefits.
If land ownership carries a cost, as it would do if property taxes were imposed, this would lead to a lessening of inequality.
Replacing transaction taxes, such as the income tax, with property taxes directed at land ownership would reduce inequality and subsequently reduce the size of the State. A land tax would reduce inequality and give wealth to more people which would lead to (a smaller State and) more modest taxation in other forms. To impose a system of Georgist taxes would result in the size of the State being reduced. Unless we have outright anarchy, which would lead to the most equitable arrangement, a Georgist system of Government will be the least aggressive.
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