Taxation as theft

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The identification of taxation as theft is a viewpoint held by certain people. It states that government is transgressing property rights by enforcing compulsory tax collection.

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The identification of taxation as theft is a viewpoint held by certain people. It states that government is transgressing property rights by enforcing compulsory tax collection. Most [1] Individualist anarchists, objectivists, and social anarchists alike see taxation as government violation of the non-aggression principle. The classic How many men? thought experiment challenges one to define the size and characteristics of a group that is ethically entitled to tax. Leo Tolstoy wrote:

"Every thief knows that stealing is wrong… that it is immoral," said Rogozhinsky, with his… slightly contemptuous smile.

"No, he does not know it. They say to him: Don't steal! and he knows that… the Government, with its officials, robs him continually by taxation."

"Why, this is Anarchism," Rogozhinsky said. …

Murray Rothbard argued in The Ethics of Liberty that since taxation is theft, tax resistance is therefore legitimate: "Just as no one is morally required to answer a robber truthfully when he asks if there are any valuables in one’s house, so no one can be morally required to answer truthfully similar questions asked by the State, e.g., when filling out income tax returns."[2]

Under Somali customary law, known as Xeer, taxation is expressly forbidden.[3]

How many men?

How many men? is a thought experiment often used by anarchists as a moral argument to show that taxation is theft.[4] There are many variations of it, but one begins, for instance, with the example of a man stealing a car, which most people would regard as unethical. It then proceeds to make slight changes to the story, with the identity of the thief gradually shifting from one man, to a gang of five men, to a gang of ten men who take a vote (allowing the victim to vote as well) on whether to steal the car before stealing it; to a gang of twenty men who not only take votes but have specialization of labor; to one hundred men who take the car and give the victim back a bicycle; to two hundred men who not only give the victim back a bicycle but buy a poor person a bicycle as well. It ultimately challenges the reader to say how big a group needs to be, and what characteristics it needs to have, before the immorality of theft becomes the alleged morality of taxation.

Compulsory Taxation

Britannica Encyclopedia defines taxation as:

“Imposition of compulsory levies on individuals or entities by governments.”[5]

The reason why compulsion is relevant as it shows that taxation breaks the Non-aggression principle.

Rothbard explores the differences between a thief and the state in his essay, The Myth of Neutral Taxation. The essay explains how taxation is both aggressive and forceful by nature. It shows that Neutral Taxation is an oxymoron. Rothbard opens the essay with:

“The purpose of this paper is to examine the nature and implications of fiscally neutral government; the paper argues that all government activities necessarily divert incomes, resources, and assets from the market, and therefore that the quest for a neutral tax or expenditure policy is an impossible one and the concept a myth.”

Therefore government is in a moral dilemma of hypocrisy. All of its benevolence then is based on compulsion as explained. This also reveals that government does not actually produce any new real wealth. Government's benevolence comes first from violence.[6]

In taxation a taxpayer wasn't given a choice in what services to pay for. Somebody else chooses on behalf of the payer without his/her explicit consent as to what services to pay for, even if the payer does not use that service or believes against that particular service. If it were possible to track where exactly a taxpayer's tax money goes, the taxpayer could pay that entity directly. However, besides the logistic difficulties of this proposal, a country's inhabitants routinely benefit from non-excludable goods or services, such as national defense or infrastructure. This is discussed in greater detail in David Osterfeld's paper "Social Utility" and Government Transfers of Wealth: An Austrian Perspective.[7]

Social Contract

Despite the moral conflict of promoting things like slavery some argue that all men at birth inherit a social contract from their government. Taxation is then justified as a part of this contract, even though the person may never agree to the contract or acknowledge it. The constitution is an example of a social contract. The theory also believes that the contract establishes a writ of government to dictate private ownership of property in the region with which it is sovereign. In other words, the social contract establishes the right of ownership of all property in an entire country and the concept of private property is subject to abuse. [8]

Counter-arguments

A counter-argument[who?] is that taxation is a payment for services rendered, and that one who does not pay his taxes is cheating the government (and the taxpayers who shoulder the burden) by getting something for nothing and therefore deserves to be punished.[9] It is argued[who?] that the claim that taxation is theft presupposes the validity of the anarcho-capitalist argument that all government services including police and military services can and should be replaced by private enterprises. However, this counter-argument is defeated by the fact that the defining characteristic of taxation is that it may be (and is usually) levied whether services are rendered or not, even if the supposed beneficiary disagrees with and wants to refuse the rendition of said services. Furthermore, the anarcho-capitalist position is that it is not necessary for anti-tax advocates to show that all government activities can be replaced with private enterprises. This position is based on the assertion that the vast majority of government activities are either unnecessary or affirmatively counter-productive to a society's economic vitality and success, and the remainder can be provided privately with higher quality and at lower costs.[citation needed]

Another justification[who?] for taxation is to remedy market failures with regard to "externalities". It is also argued[who?] that taxation is the 'ground rent' or compensation that is owed to each human being for the land and natural resources that have been deprived them by others' illicit appropriations. It is argued[who?] that all property derives from these ill-gotten gains, and compensation must be paid accordingly.[10] Thus, people are simply taking back what was rightly theirs by using the political system to tax others. This particular justification, of course, leaves unanswered the charge of the taxation-as-theft argument, and suffers from the additional error that taxation is levied upon people whether they have acquired their gains illicitly or not.

Yet another counter-argument[who?] is that property is theft; i.e., that the use of "finders keepers" as a system for allocating unowned property is arbitrary and wrong.[11] This argument is rebutted[who?] on the grounds that people making this argument typically use their or others' property to make said claim, which is either a self-defeating proposition along the lines of saying "I don't exist", though it should be noted this is an ad hominem fallacy. An additional criticism[who?] to this argument is that, since theft presupposes the existence of property, 'property is theft' is a self-refuting and absurd claim, making it even more absurd than claiming that taxation (the forceful appropriation of somebody else's property) is just, though this uses a narrow definition of theft; this of course assumes there is no distinction between private and public property.

Another counter-argument[who?] is that taxation is part of a social contract. If you are free to emigrate, you are also free to decide if you want to stay and pay taxes or not. Many critics[who?] answer by arguing that the social contract is not really a contract, saying they haven't signed any contract, as well as the fact that there is no location on earth conducive to human life that is not claimed by one or more governments. According to social contract proponents,[who?] not all contracts have to be signed, as for example, ordering food in a restaurant.[12] Other critics[who?] answer that while a signature on paper may be eschewed in some types of contracts (e.g. purchases), a valid contract requires mutual assent consisting of informed consent and explicit acceptance by all parties, or else the purported contract constitutes fraud or is otherwise invalid.

See also

* Protection racket

* Taxation as slavery

* Zero Aggression Principle

* Xeer

* Objectivism

References

1. Contra Gradualism

2. The Ethics of Liberty by Murray N. Rothbard - - Mises Institute

3. The Rule of Law without the State - Spencer Heath MacCallum - Mises Daily

4. Non-Non-Libertarian FAQ

5. taxation - Britannica Online Encyclopedia

6. Rothbard, Murray, "The Myth of Neutral Taxation". The Cato Journal Fall 1981

7. http://mises.org/journals/rae/pdf/RAE2_1_5.pdf

8. Evers, Williamson, "Social Contract: A Critique*". Journal of Libertarian StudiesVol 1, No.3 1977 pg 185-194

9. Taxes are theft

10. Philosophy, et cetera: Why Taxation Is Not Theft

11. A Non-Libertarian FAQ, Version 1.4

12. Critiques Of Libertarianism: A Non-Libertarian FAQ

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