I’ve encountered two overstated visions of taxation:
1. Tax is theft, or tax is slavery (Murray Rothbard, a small clique of libertarians, and a few conservatives)
2. Tax is duty, or tax is a virtue (Democrats and socialists)
Neither of these visions is correct, as they both fundamentally misconstrue the nature of government and the financing of it. To understand the role of taxation, we must first understand different forms of ownership and governance.
Ownership is the power of disposal. If you cannot do whatever you want with property, including destroy it completely, then you do not own it fully. There are three types of ownership – private, communal, and state.
A tomato you can eat or feed to the dog is your private property in full, unless the government makes it a criminal offense to let it rot and throw it into the face of a bad comedian. It’s a good thing I made that joke behind the digital cover of a website. Private property can be regulated, such as your house with building codes and homeowners’ association restrictions, but the owner’s power of disposal is mainly intact.
Communal property is shared amongst other people who interact directly with each other, and ostensibly share the maintenance, cultivation, and ownership. Some confuse this with socialism, but the model of communal property existed long before Hegel, Fourier, Marx, Bebel, and other forefathers of socialism.
Communal property is difficult for families and units of soldiers in a war theater. It can work, but it requires deep social bonds and obligations to each other that are much stronger than neighbors and casual friends. Anyone who shares resources in a family understands just how challenging communal property can get with people they know and love, let alone strangers.
Some awful professors have associated the United States pilgrims to socialism. In reality, pilgrim colonies involved none of the sociological protocols of socialism, no state property, and no dialectical materialism – the major aspects of socialism proper. The pilgrims chose a communitarian model, and it failed miserably. Only private property saved them from oblivion.
American hippies, ignorant of history, chose to reinvent communal property. They were not even creative, considering that their entire movement was nothing more than a facsimile of Lebensreform, nacktkultur, free love, theosophical esoteric beliefs, and völkisch inspirations (supplanted with Native American tropes rather than German romanticism). The hippie economic model was ironically much like puritan pilgrim communes.
They spent what little money they had on drugs, while collecting food stamps from productive citizens outside of their communes, and accepting gifts from wealthy benefactors to shore up the rest of their needs. Like lifelong child dependents, hippie communes could not be sustained at scale and without external gifts and handouts.
State ownership is when the government has the power of disposal of property or labor. Whether monarchy, socialism, communism, syndicalism, fascism, or theocracy, when the state obtains the prevailing monopoly of ownership, misery, suffering, collapse, and slaughter are not far away. Modern theocracy allows a Pope to finance chaos, suffering, and invasion with its parishioners’ donations. It’s a wonder Catholics do not rescind all donations until the USCCB and Vatican use their money and power to undo the chaotic invasions they have impelled.
Of course, just like disposal of private property can be constrained by state and communal impositions, the converse is true for state property. In good cases, citizens have a meaningful say in the disposal of state property. A functioning society will always have a mix of private, communal, and state property, with disposal rights that are beholden to the others to lesser or greater degrees.
In truly free market (capitalist) societies, private property is the overwhelming standard of ownership, with minimal constraints on private disposal. The capitalist society also has communal property for families secured by contracts, and the state taking ownership only where force is required – war, criminal justice, taxation, civil disputes, and market disputes. In the case of market disputes, the capitalist government is only supposed to play the role of referee, not become a player.
There is no capitalist government on earth. Dirigisme, and tenets of democratic socialism have overtaken “the free world” in the past century with results ranging from horrific to stagnant and soul-eroding. Zwangswirtschaft was the National Socialist (Nazi) incarnation of dirigisme.
The diligent scholar would review August Bebel, the history of German SPD, and Weimar Republic to understand what models of governance have prevailed in the modern day. The United States is not even the most “capitalistic” government in the world today. Over a dozen nations exceed the United States in economic freedom. The “amount of capitalism” that has been allowed in dirigiste societies has gone a long way towards improving the human condition despite the counterproductive impositions of exorbitant taxation, debt, and regulation.
Means to Exchange
With ownership in mind, we must now understand how exchange occurs. There are three means to earn money through exchange:
Labor earns money – the more productive, rare, valuable, unpleasant, risky, or dangerous, the more you earn.
Resources earn money – as in productive property that you own, including investments, companies, durable goods, and other assets that you make useful to other people.
Power earns money – an aggressor takes what they want from others with force, a child of well-connected parents associates with people who have wealth and power, a beautiful woman bats her eyelids and gets paid for standing in front of a camera, an exceptionally intelligent man gets opportunities just by dint of what people know that he can devise for them. A person with power doesn’t necessarily exercise labor, but can increase their access to money based on the intimidation, application, or admiration of their power.
Agreement or Usurpation in Exchange
Now we can address how a citizen exchanges with the government. Within each of the three means of earning, those who exchange resources can do so with agreement or usurpation.
When a laborer has failed their job, yet collected their compensation, they have usurped the exchange. Plumbers destroying more than they fix, automotive mechanics breaking things under the hood to make work for themselves, doctors injuring those they were paid to heal, lawyers extending proceedings unnecessarily and exploiting ignorance of their client – these are just a few of the infinite examples of laborers usurping the exchange. Syndicalism – trade union socialism – where workers coerce ownership of capital, is another way laborers usurp exchange.
When a resource owner delivers less than what they agreed upon, they have usurped the exchange. Landlords who violate the clauses of renters agreements, factory owners who maim their workers with risky conditions, corporate culture that coerces overtime work without compensation, investors who deploy Ponzi schemes to fool other investors, banks that use information asymmetry to take from depositors an undisclosed share of the productivity of their money – these are just a few of the infinite examples of resource owners usurping the exchange.
When a power player fails to deliver the results they agreed upon, they have usurped the exchange. A beautiful woman who shows up to a modeling shoot drunken and haggardly, a genius man who holds back his intellectual might from those who welcomed him to solve their problems, an association of well-connected people who use relationship silos to keep certain people from others in order to increase their power at the expense of others – these are just a few of the infinite examples of power players usurping the exchange.
There are less obvious forms of labor usurpation as well.
Professors who fill their students’ heads with misinformation, or prioritize low-value knowledge and social engineering over consequential knowledge are usurping the implicit labor agreement with their students.
Christian pastors who fail to teach the seven virtues to their congregation may not have explicitly violated their contract, but in making their laymen morally weak and less independent, they have failed the implicit purpose of association.
A beautiful woman who uses her natural power of attraction to marry a wealthy man, and then chooses to become a haggardly drug addict, or an obesity patient, has violated the implicit agreement. The same could be said of any spouse who seduced their partner with positive qualities (power) and then retracted or disposed of those positive qualities. This self-loathing passive aggressive behavior is a common usurpation in marriage.
Justice employees who selectively enforce the law are not failing their labor duties directly – only implicitly. Refusing to remit illegal immigrants to immigration court, and doling out light sentences to violent criminals are just two of many instances.
Is the exchange of labor, resource usage, or power in compliance with expectations and agreement? Or is there usurpation involved? Understanding exchange is required to comprehend taxation.
Tax is Duty or Virtue?
Democrats and socialists promote the horrendous notion that paying taxes is virtuous. If people were perfectly moral and wise, they would not need government. They would not make innocent mistakes that harm other people. They would not intentionally violate others for their own benefit. In an alternate reality, where people are perfect angels, law and order would be superfluous, and government unnecessary.
Because government itself is an answer to human imperfection, every penny of taxation to finance it is regrettable, and not virtuous. Every dollar we add to grow the size of government carries an implicit admission – that our society has increasing moral squalor which requires more law and order as a corrective.
Whether it is a citizen who is so foolish that they will spend their money today and leave themselves bankrupt in retirement,
tolerance of illegal immigrants jumping into ailing social service budgets that were paid for by years of taxation of citizens prior to their invasion,
hostile business practices which beg for market regulation,
or violations of the environment which give people cancer…
increasing the size of government is an admission that our society is becoming less virtuous.
No amount of taxation is a happy duty and virtue. Every penny of taxation is a sad admission to the reality of human imperfection, and its consequent requirement for law and order backed by guns and force. Conversely, every decrease in the size of government concurrent with peace and prosperity, indicates that our society is improving.
Tax is Slavery or Theft?
Murray Rothbard, is the most ardent proponent of this campaign of ignorance since the 1980s. On the surface, there are merits. The government has neither labor nor resources that it did not take with force. It is true that there are some resource-earning programs that defray government costs – you pay a fee to get into the national park. How did the government come to own the park? If it was gifted to them, then their power earned it through influence and belief of the donor.
Every man owns his body, the most sacred private property on earth. Violations of a man’s body are the most grievous intrusion of communal and state ownership. The vast majority of the population only has their labor to earn money – which is ultimately the use of their body.
Hence, when the government taxes, they are using power to violate the bodies of its citizens, with every ounce of tax they collect from income. They even indirectly tax the income of laborers by imposing taxes on businesses. The business must then raise their prices or decrease compensation to pay for the tax. If that business is a grocery store, then the customer then pays the tax from their labor every time they buy food. If that business is real estate, the renter pays the property tax with every rent payment, and the tourist pays the property tax in the cost of their hotel rate.
A properly functioning government is only given mandate for human affairs that require the use of power – war, criminal justice, taxation, civil disputes, and market disputes.
If the government owns labor directly (communism), then they own bodies, and this is in fact slavery.
If the government owns resources directly, its only incentive to optimize the productivity of those resources is power. Its employees operate on the budget. The citizens who use the government resources have expectations concocted by the government and civic organizations. That is the inherent conflict of interests that leaves state-owned resources massively inefficient.
A person who is obligated to communal property can dissociate from the commune or use force within the commune to establish control over communal property. How does a person who is obligated to contribute labor or resources to the government maintain ownership of their private property (body and assets)?
Only when taxation coerces 100% of private ownership of particular people is slavery the correct term. When it coerces an exorbitant amount, it is corvée serfdom.
While taxation is not slavery in most cases, it is also not theft. A thief uses force to take what you own. They do not answer to you, they do not do anything on your behalf. They simply take and leave, for themselves and nobody else. You have no prior agreement with the thief about what they will take from you, and typically thieves have done nothing for you in the past.
The government uses power to take taxes. They answer to us through the representative you elect, and through many other forms of civic engagement that we can choose. By remaining in the USA, we implicitly agree to the social contract – the US Constitution, which forms our government and obligates it to defend our liberties when the use of liberties by others steps on our own. It requires financing to do that job.
The government is also obligated to use taxes for other people, in ways that we had a chance to direct with our civic participation. Using power exchange, the government has erected order and state-controlled resources that we take advantage of without having to ask, in many cases. The soldier abroad, securing global trade markets for our business and consumption, does the job without our asking him directly.
There are many implicit agreements with the government that we take advantage of each day, mostly unwittingly. No such agreements exist with thieves.
Tax is Surgery
With the knowledge of ownership, means to earn, usurpation in exchange, and the purposes of taxation and governance, we can draw a much better analogy:
Tax is surgery.
In rare cases, surgery is murder. In rare cases taxation is slavery (Russian gulags, Chinese re-education camps, Nazi concentration camps).
Surgery is killing in more cases, but not often. Malpractice and complete failure do occur. Taxation is killing at times. A law-abiding Cuban communist retained some effectual ownership of their body, labor, and resources, but was stripped bare to the point of indignity and irrelevance.
What they were allowed to own by the government could never enable them to exercise any amount of liberty and self-determination. Even their utensils and dinnerware were inventoried by communist officials invading their home (this and other testimonies are true stories).
Surgery is injurious in a plurality of cases. In many cases, the outcome of surgery does not heal the patient, and creates new injuries. It may not be a majority, but the reason that doctors’ lawyers force contractual disclosure of surgical risk is precisely because injury from surgery is a plurality outcome.
Unfortunately, the most common sociopolitical paradigm across the globe today is secular humanist democratic socialism, tinged with dialectical materialism and theosophist visions. In that sociopolitical standard, taxation is injurious. The government employees, nonprofits, and civic participants are bad surgeons. The proof of this is out of scope for this article, but demonstrated irrefutably in the book Economic Sovereignty: Prosperity in a Free Society.
Surgery is necessary but still undesirable in all other cases, when not murder, killing, or injurious. In a well-functioning society, taxation is the regrettable price we must pay for being imperfect human beings who require law and order to minimize the damage done by our failures.
We certainly wish that we didn’t have to get cut open and injured in order to heal a bigger problem. But we will always need taxation and governance so long as human beings are not angels.
I look forward to a day when economic sovereignty is established and taxation is minimal, appropriate, and financing beneficial government activity instead of tyrannical government activity. On that day, I’ll agree that we finally have taxation performing good surgeries on the human condition.